A Comprehensive Guide to Staking Ethereum With Rocket Pool
Staking ETH with Rocket Pool allows you to participate in securing the Ethereum network while receiving rewards. In this guide, we will show you how to stake ETH with Rocket Pool. Stay tuned to learn more.
Ethereum Staking
In September 2022, Ethereum transitioned from the Proof-of-work consensus mechanism to Proof-of-stake. The transition meant miners no longer needed heavy mining equipment to secure the network. Instead, they were now required to stake at least 32 ETH tokens.
Given the value of one ETH token ($2,200), not many can afford 32. Staking pools like Rocket Pool lowers the entry barrier to Ethereum staking by allowing people to stake small amounts of ETH.
Exploring Rocket Pool
As mentioned, Rocket Pool focuses on lowering the requirements for Ethereum staking. You can stake any amount of ETH on this staking pool. Moreover, Rocket Pool makes the process of staking and withdrawing ETH simple. So, even a beginner can get started with the staking pool without too much hassle.
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How Rocket Pool Works
Every blockchain has node operators tasked with verifying transactions. As stated earlier, you need at least 32 ETH to become a node operator on the Ethereum network. When you stake your ETH with Rocket Pool, you are essentially delegating your tokens to a node operator, and in exchange, you will receive a portion of their staking rewards depending on the number of delegated ETH tokens.
After staking ETH on Rocket Pool, you will get rETH, a token you can use as collateral to borrow loans or lend to other crypto users. Additionally, if you no longer want to hold rETH, you can exchange it for ETH within the Rocket Pool platform. But this can only be done after 24 hours of staking ETH.
Rocket Pool is a decentralized protocol with a DAO to let users participate in its governance process. To have voting rights, you need to hold the pool’s native token, RPL.
Why Stake ETH With Rocket Pool?
One of the major reasons you should consider staking Ethereum with Rocket Pool is that the platform is highly liquid, making it easy to withdraw funds. Moreover, the pool is ideal for regular Ethereum users with a small amount of ETH looking to support the network.
Rocket Pool also gives you a chance to influence its direction by taking part in the governance process. By holding the RPL token, you can raise and vote for proposals.
As mentioned, the staking process on Rocket Pool is simple. You only need to connect your Ethereum wallet to the platform, deposit funds, and start claiming staking rewards. Remember to use the rETH token to explore other investment opportunities within the decentralized finance space.
Risks in Staking Ethereum With Rocket Pool
As long as you engage in the crypto space, there is always a risk. The biggest risk that comes with staking Ethereum on Rocket Pool is cyberattacks. DeFi protocols continued to be top targets for many cyber criminals. The good thing is that Rocket Pool regularly audits its smart contracts with the help of reputable auditors like Consensys Diligence and Sigma Prime to identify potential vulnerabilities.
How to Stake Ethereum With Rocket Pool
Follow these steps to begin staking Ethereum with Rocket Pool:
Step 1: Go to stake.rocketpool.net.
Step 2: Connect an Ethereum-compatible wallet. We recommend using MetaMask, which you can download from metamask.io.
Step 3: Ensure you select the right network. MetaMask is a multi-chain wallet, meaning it supports various networks. So make sure you choose “Ethereum Mainnet” when connecting the wallet to Rocket Pool.
Step 4: Add rETH’s contract address to your MetaMask wallet so that the token can be visible when you receive it after depositing ETH into Rocket Pool. To add the address, click “Import Token” and then “Custom Token.” After that, enter this contract address:
0xae78736Cd615f374D3085123A210448E74Fc6393. The token symbol should be rETH.
Step 5: Stake Ethereum and receive rETH. After successfully connecting your wallet, stake your ETH tokens. Rocket Pool will then deposit rETH tokens to your wallet.
And that’s how easy it is to stake Ethereum with Rocket Pool. As mentioned earlier, you can unstake your ETH after 24 hours.
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