Gitcoin logo
Our Blog

Liquid Staking with Rocket Pool: How Gitcoin is Contributing to Ethereum's Decentralization

Gitcoin's partnership with Rocket Pool as a node operator and member of the Oracle DAO allows for the mutual benefit of securing the Ethereum network while also funding public goods. As an operator of the Oracle DAO node, Gitcoin can participate in earning rewards for staked ETH, commission on pool staked ETH, and RPL rewards. This partnership exemplifies Gitcoin's commitment to being good stewards and partners in the space while also finding sustainable funding models for public goods.

As the Ethereum network continues to grow, the need for efficient and decentralized staking protocols has become increasingly important. Gitcoin has partnered with Rocket Pool to participate as a node operator and join the membership of the Oracle DAO. With this, Gitcoin joins communities such Lighthouse, Ethstakers, Nimbus, Beaconcha.in and CryptoManufaktur in securing the Ethereum network.

Decentralized Ethereum staking

Rocket Pool is Ethereum’s most decentralized liquid staking protocol. Its 2,500+ worldwide node operators have staked over 500,000 ETH. Liquid stakers can participate by depositing as little as 0.01 ETH to receive the rETH liquid staking token. Rocket Pool is a fully non-custodial solution, and its node operators are economically-aligned to perform well for stakers. Joining as a node operator is fully permissionless and requires just 8 ETH (instead of 32). Node operators earn a boosted ROI from both operator commission plus RPL rewards.

Behind the scenes

Ethereum currently operates with two separate chains: the Execution Layer (EL) mainnet chain and the Consensus Layer (CL), also known as the beacon chain. These chains are not yet connected in a way that would allow a smart contract on the EL to know about the state of any validator on the CL. This means that a decentralized staking protocol for Ethereum based on the main chain would need a way to access this information.

Rocket Pool’s solution to this problem is the Oracle DAO (oDAO), which acts as a bridge between the two chains and provides valuable oracle services for the protocol and its users. By utilizing the Oracle DAO, stakers and node operators can access real-time information about the performance of validators on the CL, such as whether they are online and earning rewards or offline and not contributing to the network.

Gitcoin was invited to run an Oracle node, and join the oDAO.

A partnership with three-way benefits

Finding recurring and sustainable funding models for funding public goods is high on Gitcoin’s priority list. At the same time, growing and continuing to be good stewards and partners to other protocols in the space has long been in Gitcoin’s ethos.

"We are excited to support a fellow protocol and secure the Beacon chain while earning rewards for doing so," said Kyle Weiss, Executive Director at Gitcoin Foundation. "By participating in Rocket Pool's oDAO, we can broaden our participation in securing the Ethereum Network and help fund public goods."

Partnering with Rocket Pool offers a three-way benefit for Gitcoin:

  • Rewards for staked ETH: On staking ETH and receiving rETH, it will automatically begin accruing staking rewards based on performance of the entire decentralized network of node operators operating in Rocket Pool. This means rETH grows in value over time, while Gitcoin can utilize that collateral to leverage the wider DeFi landscape while helping to secure the Ethereum network. This earned ETH can be withdrawn at any time and will continue to grow at a rate of around 7% annually.

  • Commission on pool staked ETH: Rocket Pool has a flat commission rate of 14% on all 8 ETH minipools, which allows node operators like Gitcoin to earn a percentage of the rewards earned on the 24 ETH assigned by the protocol. This means that node operators earn rewards on their own 8 ETH deposit plus a commission from the network for staking its ETH.

  • RPL Rewards: Gitcoin has posted a bond of 1750 RPL to commit for performance of the oDAO duties adequately. When a node operator provides an amount of RPL as collateral as an insurance promise, they are rewarded with RPL rewards from RPL inflation respective to the amount of collateral they provide. This allows Gitcoin to earn a return for playing this crucial role in the ongoing health and sustainability of the protocol.

Towards sustainable funding for public goods

In conclusion, Gitcoin's partnership with Rocket Pool as a node operator and member of the Oracle DAO allows for the mutual benefit of securing the Ethereum network while also funding public goods. As an operator of the Oracle DAO node, Gitcoin can participate in earning rewards for staked ETH, commission on pool staked ETH, and RPL rewards. This partnership exemplifies Gitcoin's commitment to being good stewards and partners in the space while also finding sustainable funding models for public goods.

Read more
Featured Posts

Define - Laying the Foundation for Your Grants Program

[BLANK] Canvas Details: Speaker Lineup & Schedule for Our EthCC Event

Gitcoin Grants 2024 Strategy & Updates

loading
loading