Rocket Pool is a decentralised Ethereum staking protocol. Stake as little as 0.01 ETH and receive a tokenised staking staking deposit rETH. Run your own node with 16 ETH
Reasons why rETH (Rocket Pool) is best in class, and the pristine ETH derivative that will (eventually) take over the ETH ecosystem as a derivative asset to be built on top of:
- Purely decentralized, open source, trustless, permissionless, etc. Rocket Pool aligns well with the Ethereum ethos. This is kinda the whole point.
- rETH simply increases in value instead of rebasing, so income is generated as capital gains rather than income. More tax-efficient => higher post-tax yield.
- Because of the lack of rebasing, it is more L2-compatible. AFAIK stETH hasn’t yet figured this part out.
- Staking will be a big deal post-merge, with an estimated yield of 13.9% (up from current 5.2%) according to Justin Drake.
- Low(est?) fees. Currently 8.92% (vs. 10% for stETH, 15% for Kraken, 25% for Coinbase). This will float based on demand.
- Due to it’s trustless design and composability, rETH is the most likely to be adopted by DeFi as a building block for collateral and lending.
- MEV will be captured and fairly accrued to rETH holders. This will likely not be the case for CEX staking, for example.
- For those optimizing yield on their ETH, being able to stack staking yield + DeFI lending yield will offer the best overall return.
- Fully redeemable for ETH prior to the merge, provided there’s enough incoming ETH liquidity.
- Rocket Pool encourages non-majority clients, increasing the health of the beacon chain.
- Depositors are effectively fully insured from any type of incident, due to the RPL bond that each node operator must put up. rETH is insured by over 100% of it’s value. In the case that there is a slashing on the Rocket pool network. The penalty will come from the node operator and not rETH holders. There is no other ETH staking derivative that has this kind of insurance or will ever come close to it.
We all know there are many different DEFI yield farming strategies and I believe that there will be many strategies for rETH. Since rETH should never be less in value against ETH and it’s coming from the Rocket Pool protocol, which follows the Ethereum ethos, I think that it’ll be accepted as collateral for many of the lending dapps on Ethereum. When this does happen rETH holders will be able to collateralize their rETH for ETH to deposit back on Rocket Pool. This will create a positive feedback loop where the first rETH holders to implement this strategy will yield probably around 20-40% on their ETH instead of the average 5-8% just from staking rewards.
Of course, there will be many more advanced yield farming strategies. This is just an example of a simple one that could be profitable for rETH holders as well as the protocol that accepts rETH as collateral.
Currently there is 35,000 rETH in circulation and growing with no platform to borrow against. There is high demand for rETH in DEFI and the community is looking for somewhere to use their rETH. If WePiggy were to allow rETH as collateral it would be the first protocol to do so and give massive amounts of publicity for WePiggy and attract a lot of collateral.