You probably heard the news. The Merge is coming this September. And our role as participants in this ecosystem has taken on a new task of supporting the protocols and communities that will pave the way for a more robust and decentralized network.So, in preparation for this historic event, we’ll be teaching you how you can secure the future of ETH with Rocket Pool, a protocol that’s taking giant leaps towards distributing node operations at scale.
In this guide, we'll be taking you through the steps to stake small amounts of ETH, as well as sharing a brief overview on why you might consider setting up a validator node with Rocket Pool (for the more advanced users).
In this article, you’ll learn:
- What is Ethereum staking?
- What is Rocket Pool?
- How to stake ETH on Rocket Pool.
- An overview on validator nodes.
What You’ll Need to Complete this Task
In order to complete this task, you’ll need the following:
- A crypto wallet
- ~0.1 ETH in your Ethereum wallet (remember to budget for gas fees)
Proof of Stake is a promising approach to consensus layers that will allow ETH to scale beyond its current limitations. If you thought web3 was going on hyperspeed before, just wait to see what’s awaiting us after the Merge. If you’d like to learn more about PoS and ETH staking, head over to our Learn Hub guide to see more.
Before we Start
Rocket Pool is a staking solution for the average DeFi user, it allows you to pool your funds with hundreds of other small investors and create your own node together. This platform differs from other staking solutions (such as Lido) mainly in their approach to staking.
Instead of entrusting your ETH to the platform itself, Rocket Pool uses a specialized staking protocol that grants you and your pool buddies full control over the node.
This allows for a wider distribution of staking for small-scale investors. Decentralizing the ecosystem further, and lowering the cost of securing Ethereum.
By breaking down the price barrier that prevents you from staking in the traditional way, Rocket Pool allows you to further decentralize ETH validation, keeping the network robust by diversifying the amount of people securing the network instead of just a few platforms. Contributing to this space isn’t always about working for DAOs, sometimes the simplest actions can have the largest impact.
How to Stake your ETH with Rocket Pool
Rocket Pool makes staking easy in preparation for the Merge. You can start with as little as 0.01 ETH, but for the purpose of this quest, we’ll be requiring a minimum stake of 0.1 ETH to claim the NFT reward. Our goal is to help you prepare for the Merge, as well as educating you on the importance of securing the Ethereum Network. It's as easy as depositing your ETH in exchange for rETH (Rocket Pool ETH).
1. Go to stake.Rocket Pool.net and connect your wallet.
2. Pick the amount of ETH you’ll be staking (remember, you’ll need to stake a minimum of 0.1 ETH for this quest), input it into the dashboard, and click the “stake” button.
3. Confirm the transaction from your wallet, and pay the gas fee.
4. Give it a moment, and you should get a confirmation as soon as the transaction goes through
5. Keep in mind, the amount of rETH you receive will display a slightly lower quantity as what you deposited. Don’t panic, this doesn’t mean you lost funds, it just means rETH has a slightly higher swap value than regular ETH.
That’s it! You can then use that rETH to provide liquidity in popular rETH pairs like USDC, ETH and LDO. Or you could just hold it, there’s big things on the horizon for ETH stakers.
A Note on Setting up your own Validator Node
If you’d like to go the extra mile (and have 16 ETH laying around), you can also set up your own validator node with Rocket Pool. They make this process much easier by cutting the initial 32 ETH investment in half by using an approach called a “Mini-pool”.
Minipools allow you to set up your own validator node by “borrowing” the other 16 ETH from Rocket Pool, which they’ll buy back little by little whenever small investors stake through the rETH staking mechanic we discussed above.
You get to run a node for much cheaper, the average user gets to stake and secure the network, and Rocket Pool gets a small cut of the validator rewards. All of this is fully handled through smart contracts on the Ethereum Network, meaning it’s 100% decentralized. You, and your mini-pool stakers, own the node.
Of course, you’ll still have to handle your validator node maintenance, which isn’t a set-it and forget-it ordeal. Thankfully, Rocket Pool offers extensive knowledge resources with everything you’ll need to know to keep your node operating. Plus, their RPL rewards offer somewhat of an insurance against slashing penalties for your node, which you wouldn’t have access to had you chosen to set it up on your own.
As we mentioned, this isn’t an activity your average DeFi user would be undertaking. Though sharing a brief description of it is crucial to illustrating Rocket Pool’s enormous value to our ecosystem.
You’re all Done!
Staking is about so much more than just the APY. By contributing to this ecosystem with your ETH, you’re securing the value of web3 and making sure the space we’re building together keeps growing stronger with each validator and each staked ETH!
Now go out there and spread the word! Don’t forget to claim your NFT reward on the way out.