Glossary#

You may stumble upon some unfamiliar concepts in the Rocket Pool documentation. This section lists the common terms in the documentation for easy access, learning and plugin/theme development.

APY - Annual Percent Yield (APY):#

The amount of profit (yield) calculated over a one-year period divided by the initial investment amount expressed as a percentage.

Bonding#

See insurance.

Contract, (Smart)#

An Ethereum program (smart contract) that is used to perform a set of programmed functions. Rocket Pool smart contracts include the deposit pool, minipool validator formation, and issue and track various token interactions on the Ethereum chain.

Client#

A client is an implementation of Ethereum software that verifies all transactions in each block, keeping the network secure and the data accurate. See also Execution and Consensus client.

Custodial#

Centralized service that manages the entire ETH staking process on behalf of the user and retains "custody" over private validator keys and withdrawal keys. See also non-custodial.

DAO (Decentralized Autonomous Organization)#

An organization represented by rules encoded as a computer program that is transparent, controlled by the organization members, and not influenced by a central government.

Deposit Pool#

The amount of ETH ready to be staked. The deposit pool is funded by regular users when they swap ETH for rETH. This ETH is the amount that is waiting to be paired with node operators in the node operator queue.

ETH#

The fundamental cryptocurrency coin generated and used by the Ethereum protocol.

Execution Client#

Ethereum Software clients that run the execution layer.

Consensus Client#

Ethereum Software clients that run the consensus layer.

eth2.0 (the Beaconchain)#

The Ethereum 2.0 network and update to the Ethernet network that was launched in December 2020 and replaced the proof-of-work eth1.0 consensus mechanism in September 2022. Deprecated term - now known simply as the Beaconchain or the consensus layer.

Insurance#

The amount of RPL token, expressed as a percentage of the value of ETH provided by the protocol, that a node operator needs to deposit when they start a minipool validator. The RPL insurance staked by a node operator will act as insurance to reimburse regular users in the event that the node operator exits staking with less than the protocol-provided ETH in their validators (24 ETH in the case of an 8 ETH minipool, 16 ETH in the case of a 16 ETH minipool).

Minipool (Validator)#

A validator that was funded and initialized via the Rocket Pool software. It is composed of ETH contributed from regular users via the deposit pool and ETH contributed from node operators during their registration process.

Node#

In the Ethereum network, nodes are devices (computers) that run Ethereum client software.

Node Commission#

The amount of supplemental ETH awarded to a node operator. This is effectively the “fee” that is taken from normal stakers; in Rocket Pool, that fee is given to the node operators. When Rocketpool launched, it ranged from 5 - 20% with the ideal target of 10%, with each minipool’s commission locked for life upon the creation of the minipool. New minipools activated are now at a set 14% commission rate.

Node Operator#

An individual that wishes to secure the Ethereum network by operating a node (computer) that will run the Rocket Pool software, a validator client, and optionally an execution and beaconchain client as well. Node operators will earn ETH APY rewards at a greater rate than solo-stakers on the Ethereum network.

Node Software#

A set of programs that allow node operators to interact with the Rocket Pool protocol.

Node Wallet#

An Ethereum wallet that is generated by Rocket Pool upon creating a new node. This wallet will be used to fund new minipools during their creation and pay for the gas fees needed to interact with Rocket Pool’s smart contracts.

Non-Custodial#

A service that provides streamlining for validator set up in management but does not hold user private validator keys and withdrawal keys. Rocket Pool is a non-custodial staking service.

Oracle DAO (oDAO)#

A DAO composed of all the oracle node operators. See also DAO.

Oracle Node#

A special node run by trusted members of the Rocket Pool community that relays information from the beacon chain (such as total staking rewards and validator exit status) back to the execution layer so the Rocket Pool smart contracts can function correctly.

Proof-of-Stake (PoS)#

The consensus mechanism used in Ethereum, where users vote on the correctness of new blocks by staking the ETH in their wallet.

Protocol DAO (pDAO)#

The DAO composed of all holders of RPL tokens. See also DAO.

Regular Node (Operator)#

The term given to “normal” node operators that do not have the additional responsibilities of Oracle Nodes.

Regular Stakers#

A retail (regular) user that wants to earn interest on their ETH coin without decoupling it from the underlying value of ETH. A regular staker interacts with the Rocket pool platform by swapping ETH coins for rETH tokens. Their ETH is entered into the staking pool, where it is acquired by Node Operators when they create new minipools.

rETH (Rocket Pool Staking Deposit Token)#

A token that represents a regular user’s deposit into the staking pool. Users receive an equivalent value of rETH token for each ETH coin they deposit. As interest is earned by staking on the Ethereum network the value of the rETH token increases with respect to ETH. This token does not need to be locked within the network and it can be traded, sold or held as the user desires.

RPL (Rocket Pool Token)#

RPL — Rocket Pool Protocol Token RPL is the primary protocol token that will be used in governance of the protocol and can also be staked on a Rocket Pool node.

From a Node Operator perspective:

• As of Saturn 1, vote-eligible staked RPL will get a share of total protocol revenue
• The majority of RPL inflation is given as rewards to Node Operators based on staked RPL; these rewards are planned to be phase out with Saturn 2
• For Saturn 0 minipools (made after 10/28/2024): Staked RPL provides up to 4% additional bonus commission; bonus commission is planned to be phased out a few months after Saturn 1's launch.
• Staked provides voting power for governance

From a protocol perspective:

• A minority of RPL inflation provides funding for the pDAO

• A minority of RPL inflation provides funding for the oDAO

• It can serve as secondary collateral (e.g., against slashing)

Stake#

An amount of coin or token that is deposited as an assurance collateral to perform some work. An individual can stake ETH either as a regular user by swapping ETH for rETH or as a node operator by depositing ETH for use as part of the Beaconchain PoS consensus process. A person who stakes their ETH (e.g. a staker) is rewarded with an APY or return on their deposited ETH.

Staking Pool#

A staking pool allows multiple ETH coin holders to combine their tokens to collectively form the required amount to run an Ethereum validator. Rocket Pool forms, tracks, assigns, and insures these collective pools using a non-custodial decentralized method.

Validator#

See minipool.