Rocket Pool (RPL): A Decentralized Staking Protocol Poised for Growth in 2023
Rocket Pool (RPL) is a decentralized staking protocol that aims to improve the decentralization of Ethereum by allowing anyone to run a node and earn staking rewards. It uses a token called RPL, which has a circulating and total supply of the same number, but a max supply that is theoretically infinite due to a 5% per annum inflation rate. The protocol’s tokenomics involve a derivative asset called RETH, which captures the value of staking rewards and can be traded on decentralized exchanges such as Balancer and Uniswap.
One of the critical features of Rocket Pool is its decentralization. Currently, around 350,000 ETH are staked with the protocol, and 1938 node operators run it in 107 different regions. This wide distribution of node operators is considered a significant advantage over other protocols like Lido, which has a much higher degree of centralization with only 27 validators. This level of centralization poses significant tail risks for those staking with Lido, and it’s something to consider when choosing a staking protocol.
When you stake with Rocket Pool, you have two options: either run the node yourself and become a node operator, or you can stake your ETH and earn rewards. To become a node operator, you need to post up 16 ETH and then be allocated another 16 ETH from the staking pool. This option is more suitable for technically proficient people who want to take on more responsibility, while the latter is more suited for the average user.
In terms of market share, Rocket Pool currently holds around 5-5.3% of the market, and it’s slowly gaining more market share. However, there are plans for significant upgrades in 2023 that will help it to gain more market share.
Rocket Pool is a promising staking protocol that offers decentralization and a fair distribution of rewards. It’s a protocol worth considering for those who want to earn staking rewards while also contributing to the decentralization of Ethereum.
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