Sugarcane Podcast

What is Rocketpool? | A Close Look at Simplified Staking 🚀

December 20, 2023 Sugarcane Season 2 Episode 8
Sugarcane Podcast
What is Rocketpool? | A Close Look at Simplified Staking 🚀
Show Notes Transcript

🌐 Understanding Rocket Pool's Role in Ethereum Staking.
🚀 Insights into Rocket Pool's Liquid Staking Tokens.
💼 The Benefits of Rocket Pool's Decentralized Staking.
💡 How Rocket Pool Enhances Ethereum Network Security.


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Disclaimer: 🚨 The information provided across all of Sugarcane's communication channels is for informational and entertainment purposes only. It should not be construed as financial or investment advice. Consult with a financial professional before making any investment decisions.

Speaker 1:

You're listening to the Sugar Cane podcast, where you get all of crypto's tastiest tips. Here's your hosts, sheldon Trotman and Rudy Dogum.

Speaker 2:

Sheldon. What is Rocket Pool?

Speaker 1:

So Rocket Pool is, if we look back at, like previous episodes we did around staking and what that meant proof of stake, right? So Ethereum itself, as a recap, they're a proof of state network. So essentially, what that means is, instead of having to run a bunch of computation to actually get the assist, the network to stay stable and actually progress it forward, what Ethereum does is that it allows people to stake assets. So you have to buy Ether, essentially, and put it in like almost like escrow, and by putting in escrow, you're securing the network and you're basically doing computation on the network, right? You're essentially having a pro rata right to collect all the transactions together and create the next block, right? Let's start from this episode, if you're, if you want a more like deep dive on like what that means and how that works. But Rocket Pool is one of the providers where people can actually stake their Ether with, and what they're given is interesting because they're given what's called the receipt token. So essentially it's called liquid staking token, and that liquid staking token is basically the yields that you get back from the act of staking. It's basically like the APY is like the return that you get back for providing service to the network.

Speaker 2:

Gotcha. So, as a user, I can go on Shurikin, say, I want to convert my Ethereum to Rocket Pool's token, which is our ETH, the liquid staking token, and I am therefore contributing to that staking environment, staking network.

Speaker 1:

Yeah, so what that works technically speaking the way it works technically speaking is that, like the actual Rocket Pool protocol, what they do, they basically allow people to provide Ether as like a means to allow other people who are running infrastructure to create nodes Right. So like, in a sense, you're not actually the one running the node, you're not actually pulling up a Raspberry Pi or old laptop and running the Ethereum protocol on your computer. What you're doing is basically saying, hey, I have money, I want to provide my money as like a as a part of someone else's infrastructure to have them run a node, because in order to run a node, you need 32 Ether, and so you're basically contributing to the 32 Ether requirement for their nodes to be able to run and provide value to the Ethereum network. And so you're essentially saying, hey, as I have Sheldon, I have a hundred bucks in USCC, I want to actually provide that $100 worth of value to the Rocket Pool protocol to actually secure Ethereum.

Speaker 2:

Gotcha yeah so is it? And how does a Cherokee find where to get our ETH?

Speaker 1:

Yeah, so in a sense, if you look back to also our previous episodes around, like DEXs and decentralized exchanges, the R ETH token, so Rocket Pool, the Ether R ETH token, that's essentially what provides your value to the Rocket Pool protocol, right? So what we use as sugar cane is that we use a decentralized exchange. Think of like like Uniswap, for example, where we take your Ether or we take your USDC and we take that, put that as input in and we ask for our ETH back. So now you as a person who's using sugarcane, you're actually doing the act of swapping from whatever token you have let's say again, usdc or Ether into the our ETH product and you're providing value to the REC, to the rocket pool protocol, and you're getting the yields, the returns, back for staking. So like you're getting exposure to staking without having to run any of the infrastructure. So that's kind of the middle ground of like being able to provide value to people who are running infrastructure but also getting back a return because you're still providing value to the network.

Speaker 2:

Yeah, that's nice because now I don't have to go on to some other website to keep my wallet, to then approve a transaction, sign it just to get our ETH. I can do it all in one shot. Yeah, sure, you can handle all the complexities and I kind of get all the rewards and benefits from it.

Speaker 1:

Yeah, you essentially are still able to get all the staking yields. Like, for example, right now, in November of 2023, there are roughly about three to four percent in ETH returns. Eth returns, it's like you still get the R ETH return value back to you and you don't have to think about the again, the DEX that's being used, you don't have to think about the bridges, you don't think about the gas that's being paid. You're just able to see hey, I have 100 UCC and I click stake and now I get back and I see I have one point whatever amount of R ETH, and you can see that value increase over time. Nice.

Speaker 2:

Yeah, that's awesome and yeah, thank you for billing that out, because it just makes my life easier. Now I can just stake whenever I want to without having to worry about everything else around it.

Speaker 1:

Yeah, and they're one of the more decentralized staking protocols, right? So like if you're in the staking ecosystem, you kind of hear of like different names, like rocket pool, you hear of like stake wise, you hear of like Lido, which is also other providers in the staking context. Rocket pool is one of the more trusted ones. They've been around for a while. They're more decentralized, so that's why we provide them and support and show that within the Action Mobile app itself.

Speaker 2:

Nice.

Speaker 1:

Well, I hope.

Speaker 2:

If anyone else is building and using R, eth or Rocket pool, let us know. And I know the rocket pool community very well is super welcoming, super inviting and they're happy to help you build. And if you need an intro to that, let us know.

Speaker 1:

Yeah, they're really, really welcome community. They're cool, they're very helpful. Yeah.

Speaker 2:

Awesome, thank you.