# A Node Operator's Responsibilities

# How ETH2 Staking Works

As a reminder, staking in ETH2 is done via validators. A validator is a single ETH2 address, to which 32 ETH was deposited, which is now responsible for helping maintain the consistency and security of the Beacon (ETH2) chain. They do this by listening for transactions and new block proposals, and attesting that the proposed block contains legal, valid transactions by doing some number crunching and verification behind the scenes. Occasionally, they get to propose new blocks themselves.

Validators in ETH2 are assigned attestations and block proposals on a schedule. This is very different from ETH1's proof of work system, where everyone is constantly trying to race each other and come up with the next block before everyone else. This means that unlike ETH1 where you aren't guaranteed to earn a block reward unless you find the next block, ETH2 validators are guaranteed to have slow, steady income as long as they perform their duties. If a validator is offline and misses an attestation or a block proposal, it will be slightly penalized. The penalties are quite small though; as a rule of thumb, if a validator is offline for X hours, it will make all of its lost ETH back after the same X hours of being back online.

ETH2 validators are rewarded for attestations and block proposals, but those rewards stay on the ETH2 chain with the validator. There is no way to retrieve them back on the ETH1 chain right now, so unlike mining, you will not be given ETH slowly over time to use as you see fit. Instead, your validator will simply accrue a larger and larger balance over time, but you won't be able to access it until you voluntarily exit your validator. This will retire it from its duties and return the balance back to you. Note that this is not currently possible until the ETH1 and ETH2 chains merge, and withdrawals have been implemented.

If an ETH2 validator violates one of the core rules of the Beacon chain and appears to be attacking the network, it may get slashed. Slashing is a forceful exit of your validator without your permission, accompanied by a relatively large fine that removes some of your validator's ETH balance. Realistically, the only condition that can cause a slashing is if you run your validator's keys on two nodes at the same time (such as a failover / redundancy setup, where your backup node accidentally turns on while your main node is still running). Don't let this happen, and you won't get slashed. Slashing cannot occur from being offline for maintenance.

# How Rocket Pool Nodes Work

Unlike solo stakers, who are required to put 32 ETH up for deposit to create a new validator, Rocket Pool nodes only need to deposit 16 ETH per validator. This will be coupled with 16 ETH from the staking pool (which "normal" stakers deposited in exchange for rETH) to create a new ETH2 validator. This new validator is called a minipool.

To the Beacon chain, a minipool looks exactly the same as a normal validator. It has the same responsibilities, same rules it must follow, same rewards, and so on. The only difference is in how the minipool was created on the ETH1 chain, and how withdrawals work when the node operator decides to voluntarily exit the minipool. All of the creation, withdrawing, and rewards delegation is handled by Rocket Pool's smart contracts on the ETH1 chain. This makes it completely decentralized.

A Rocket Pool Node is a single computer with an ETH1 wallet that was registered with Rocket Pool's smart contracts. The node can then create as many minipools as it can afford, all running happily on the same machine together. A single Rocket Pool node can run many, many minipools. Each minipool has a negligible impact on overall system performance; some people have been able to run hundreds of them on a single node during Rocket Pool's beta tests.

A minipool's upfront cost is 16 ETH, plus at least 1.6 ETH worth of the RPL token. This acts as supplemental insurance against particularly egregious slashing incidents, and lets you participate in Rocket Pool's DAO where you can vote on changes to the smart contracts.

# Rocket Pool Node Operators

Node operators are the heart and soul of Rocket Pool. They are the individuals that run Rocket Pool nodes. They put ETH from the staking pool to work by running minipools with it, which earn staking rewards for the Rocket Pool protocol (and thus, increase rETH's value). Their job is straightforward, but crucially important: run ETH2 validators with the highest quality possible, and maximize staking rewards.

Node operators are responsible for:

  • Setting up a computer (either physical or virtual)
  • Configuring it correctly, including their home network if applicable
  • Installing Rocket Pool on it and setting up minipools to perform ETH2 validation
  • Securing it, both from outside and inside threats
  • Maintaining it for the life of their validators

It's a big responsibility, and not a simple set-it-and-forget-it kind of job; you need to care for your node for as long as it's staking. With great responsibility, however, comes great rewards. Here are the major benefits of running a Rocket Pool node:

  • You earn half of the validator's total ETH rewards, plus an extra commission (varies from an additional 5 to 20 percentage points)
  • You earn interest on the RPL you stake as supplemental insurance
  • You can participate in the DAO and get to vote on changes to Rocket Pool's protocol or settings

That being said, as a node operator you are responsible for your own performance. If your node performs poorly and you actually end up losing ETH by the time you decide to exit your minipool, all of the lost ETH is coming out of your share. For example: if you exit with a balance of 30 ETH, then your minipool lost 2 ETH from its initial 32 ETH deposit. You will receive 14 ETH, and 16 ETH will be returned to the staking pool.

If you're fairly new to using the command line or computer maintenance, this can seem like a scary challenge. Luckily, one of Rocket Pool's most core principles is decentralization - the fact that anyone, anywhere, can run a node if they have the determination and knowledge. While we can't help with determination, we can help with knowledge. This section is packed with guides, walkthroughs, and information that will help you understand how to run a great Rocket Pool node.