Liquid staking on Ethereum is the largest sector of DeFi. Tens of billions of dollars have been invested into this sector, and many view liquid staking as a new primitive for the Ethereum blockchain.
Liquid staking allows investors to earn yield on Ethereum via staking rewards. As of 2023, there are a few main players that control the majority of liquid staking’s market share: Lido staked ETH (stETH), Coinbase ETH (cbETH), Frax ETH (frxETH) and Rocket Pool ETH (rETH). In this article, Benzinga explores how you can buy rETH, gives details on its background and provides insights on how Rocket Pool ETH differentiates itself from competitors.
What is Rocket Pool ETH?
Rocket Pool ETH (rETH) is a liquid staking token (LST) on Ethereum that enables users to participate in Ethereum staking without the hassles of running their own node. Traditionally, Ethereum stakers would need to maintain validators, stake a minimum of 32 ETH and have the technical knowledge to run a node. Rocket Pool eliminates these barriers, allowing investors to earn staking rewards by holding the rETH token.
Rocket Pool differentiates itself from other leading staking providers by offering the most decentralized solution for Ethereum staking. While Coinbase, Lido and Frax all only run a handful of nodes, Rocket Pool boasts a network roughly 100x more decentralized than its competitors. Anyone with 8 ETH and RPL tokens can set up their own node, aiding in the decentralization of the protocol.
Brief History of Rocket Pool ETH
Rocket Pool ETH gained major traction since its launch as a decentralized solution for Ethereum staking. While it’s relatively new to the market, its growth and novel design have attracted the attention of many investors. Launched in 2021, Rocket Pool ETH offers an alternative staking mechanism for Ethereum holders who wish to participate in staking but may not meet the minimum requirements or technical expertise for direct staking.
As for notable investments, Rocket Pool has received support from reputable organizations and investors within the crypto sector. With the protocol’s seed round being led by ConsenSys ventures, Rocket Pool gained much-needed credibility, aiding in its successful launch. Many in the Ethereum community chose to adopt Rocket Pool over its competitors, as Rocket Pool’s ethos of decentralization aligns better with the community’s values.
How to Buy Rocket Pool ETH (rETH)
Looking to buy Rocket Pool ETH but don’t know where to start? rETH can be purchased on several leading crypto exchanges, and creating an account can be done in as little as 5 minutes. Follow these steps to buy Rocket Pool ETH from a crypto exchange.
Step 1: Open an online account
If you don’t already have an account that supports Ethereum purchases, you’ll need to find an exchange to open an account with. Important factors to consider before opening an account are trading fees, security features and user experience.
Since rETH can mainly be obtained through decentralized exchanges (DEXs), you’ll need to buy ETH from an exchange and then send the funds to a crypto wallet. The simplest way to do this is to use Coinbase and Coinbase Wallet, but any crypto exchange that supports Ethereum should do just fine.
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Sum of median estimated savings and rewards earned, per user in 2021 across multiple Coinbase programs (excluding sweepstakes). This amount includes fee waivers from Coinbase One (excluding the subscription cost), rewards from Coinbase Card, and staking rewards. ³Crypto rewards is an optional Coinbase offer. Upon purchase of USDC, you will be automatically opted in to rewards. If you’d like to opt out or learn more about rewards, you can click here. The rewards rate is subject to change and can vary by region. Customers will be able to see the latest applicable rates directly within their accounts.
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Step 2: Buy a Wallet (Optional)
While not mandatory, using a hardware wallet to store your Rocket Pool ETH is highly recommended for added security. Consider hardware wallets like Ledger Nano S or Trezor, as these brands have been around for a long time and take security very seriously.
Regardless of whether or not you use a hardware wallet, you’ll need a software wallet to send your Ethereum to. Popular software wallets include Coinbase Wallet, Metamask, and Trust Wallet.
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Sum of median estimated savings and rewards earned, per user in 2021 across multiple Coinbase programs (excluding sweepstakes). This amount includes fee waivers from Coinbase One (excluding the subscription cost), rewards from Coinbase Card, and staking rewards. ³Crypto rewards is an optional Coinbase offer. Upon purchase of USDC, you will be automatically opted in to rewards. If you’d like to opt out or learn more about rewards, you can click here. The rewards rate is subject to change and can vary by region. Customers will be able to see the latest applicable rates directly within their accounts.
Step 3: Make your Purchase
Once you’ve sent your Ethereum to your crypto wallet using your public Ethereum Mainnet address, you’ll be ready to make your purchase. You can go to an Ethereum app like Uniswap or Curve to swap your Ethereum for rETH. Confirm in your wallet, approve the transaction to access your ETH, then approve the swap on your crypto wallet.
Once approved, your Ethereum will be swapped for Rocket Pool ETH. Rocket Pool ETH will begin to accrue staking rewards for you passively.
Trade, Sell or Convert your Rocket Pool ETH
When you want to sell your Rocket Pool ETH, you’ll need to swap back for Ethereum on your preferred DEX. Once swapped, you can send your ETH to your crypto exchange account. From there, you can sell your ETH for USD to your bank account. Alternatively, you can swap rETH or ETH for stablecoins in your crypto wallet and continue storing funds in a decentralized manner.
Current Crypto Prices
The cryptocurrency markets have seen a downward trend in 2022 and 2023. While interest in the markets is down across the board, these quiet times have often been the most lucrative time to get involved in the industry. Cryptocurrencies are inherently risky investments and conducting thorough research before investing is advised.
Is Rocket Pool ETH a Good Investment?
Rocket Pool ETH is a great way to earn passive yield on Ethereum via ETH staking. It’s a top protocol in the liquid staking sector, and liquid staking is poised for continued growth over the years to come. Liquid staking is the fastest-growing sector of DeFi, and liquid staking token prices have outperformed many other tokens in the market. Liquid staking carries its own set of risks, and the industry is still heavily correlated with the rest of the crypto markets. If you are long on ETH, however, then Rocket Pool’s liquid staking solution may be for you.
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