Staking Liquidity

We believe it’s important for users to have liquidity for their staked deposits during these initial phases, because as we said earlier, these phases could run for an extended time and having options for your staked deposit is important for a lot of the users we’ve spoken too.

rETH — A token that represents locked ETH on the beacon chain for Rocket Pool users.

rETH is our initial attempt at providing this liquidity. It is a new token that exists just for Rocket Pool 2 users. When you stake with Rocket Pool in phase 0 and 1, you will receive these tokens when you withdraw. These give our users a source of liquidity during this transition period, they could be traded or sold as desired until access to the real ETH on the beacon chain is available during Phase 2, at which point they could be traded in. We would also charge our fees in rETH in the meantime so we are using the same service we offer our users.

The Benefits

Obviously having access to a token which is backed by deposits on the beacon chain now opens up a host of opportunities for liquidity, it can be traded or sold as desired while these initial phases are being rolled out.

Integration with other token markets such as those on Uniswap could also allow for a rETH : ETH pair, this means that users who withdraw on Rocket Pool, could potentially have their withdrawal converted to actual ETH if liquidity for the rETH pair on Uniswap is good.

The Drawbacks

Currently we are not locked into any one approach, and are evaluating all new ideas (such as a proposed ETH1->ETH2 bridge) as they pop up. But rather than sit on our hands, we’re taking the pragmatic approach of pushing forward with rETH, until something better arises (if it does).

This approach though does have some drawbacks and is part of the reason we aren’t locked into this idea as it would centralise part of our service (although all network node staking would still be decentralised and highly distributed); we’d have to be responsible for porting over rETH balances to the new Ethereum chain in phase 2 when smart contracts are supported.

We’re open to feedback on this idea and will be integrating it into our first beta in September 2019, just for testing initially.