📺 Decentralized ETH Staking with Rocket Pool | Darren Langley & Dave Rugendyke

hey bankless nation welcome to another state of the nation episode we're super excited to host this it's been a long time coming it's with our friends at rocket pool rocket pool david why don't you tell folks what rocket pool is yeah rocket pool is a decentralized staking as a service system uh and rocket pool has been around for a really long time i remember paying attention to rocketpool back during the the ico craze the ico days and racquetball has uh you know just been laser focused on one thing and one thing alone which is providing a decentralized staking pool

system to in further democratize and decentralize access to providing security for ethereum so we're going to dive into what that means and this story thus far for rocket pool and but also most importantly their main net launch which is why we're having them on right now they're mainnet just launched so congratulations to the to the rocket pool community and the rocket pool team and dave and darren who have been through it all all throughout the bear market and then finally went through got to the other side of the bear market waiting for all of the ethereum two devs

to actually ship proof of stake uh and now that is finally here rocket pool is following along in the footsteps of ethereum at large so i think this is probably the next best thing to staking on your own validator in fact it's probably the best thing for a lot of folks because staking on your in your own validator still requires 32 each that's a lot of money man like 32 eth so if you don't have 32 each and you still want to stake the decentralized way rocket pool is providing an answer to that and so uh we're gonna talk to the team today all about it and talk about the wider

east staking ecosystem too so we hope you hang out for this conversation it's gonna be great with david and darren from rocket pool before we get in we uh got to tell you about opolas i think this is uh one of the last days that uh we're gonna be talking about this opolis is a dow that supports self um self sovereign workers basically these this is the new creative class of worker that dave and i are super bullish about right so if you've ever and i i hear people say this all the time they're involved in

multiple dowels and they're like i would quit my corporate job in a heartbeat and go work for a doubt but i can't because i live in the u.s and i need health insurance i need my benefits uh i need like payroll taxes done for me that's what opolis does so it is a dow that supports self-sovereign workers in this new economy provides them health insurance options and you gotta go check them out because right now if you do there's a special bonus for listeners the bankless podcast you get a thousand

work tokens and a thousand bank when you join opolis by january 1st and end of year now's the time to be thinking about your benefits what you're going to be doing in 2022 whether you still want to work at that soulless corporate job that you work at right now or whether you want to take the dive into a dow this is a good time to investigate it so click the link in the show notes and you could chat with a membership steward at opolis today uh david some other things going on in the bankless nation man we're dropping some hot podcasts recently so there was

one on monday that was with polygon what was that all about yeah polygon which is uh what we've been calling the swiss army knife of scaling solutions uh there's been a bunch of drama recently about abandoning ethereum because abandoning because ethereum abandoned its users well around here sir the polygon team disagrees uh and so we brought on uh mihalo and sandeep of the polygon team to just unpack really the polygon vision and what it means to have a vibrant layer two ecosystem rather than having a single monolithic chain so that was fantastic and then also that

what came out this morning is also a layer zero with tim baker tim baiko who's the new all-core devs lead managing the the core devs of ethereum uh kind of coordinating everyone to make sure they're on the same page tim baiko really uh came onto my radar when he's really pioneered eip1559 so we unpacked what it's like to be at the deepest levels of ethereum development what it's like to actually push changes to ethereum and uh just a lot of lessons about the the dynamics of clients and client diversity which is

also going to be a bit of a subject here today on the show with rocket pool as well well now that is an individual who works for a dow right ethereum being sort of one of the original dolls for for sure so that'll be an interesting story i haven't caught up with that podcast yet david but it's in my cue uh let me start with the question i ask you every single state of the nation what is the state of the nation today my friend yeah the state of the nation is sinking which is kind of an interesting word but for long time bankless listeners you might be reminded of the protocol sync thesis which i think it really underpins

a lot of what we talk about here at bankless the protocol sync thesis in a sentence is that the most credibly neutral the most protocolized components of ethereum sink down to the bottom and allow other people to build on top of that and the more and more we can find things that are more credibly neutral are just more protocolized less governance things like uniswap for example are deep in the protocol sync things like ens are deep in the protocol sync many many things are built on these things and rocket pool is really a piece of

infrastructure that is at the deepest level of the protocol sync very core to ethereum and when something like rocket pool comes online we all get to go a little bit deeper down the protocol sync so ryan today we are sinking sinking but in a good way this is a thinking that makes our systems more robust and more decentralized and is a core part of the the bankless thesis that we've been talking about so much so we will be back to talk all about that to get into the rocket pool story with darren and dave but before we do we want to thank the

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hey guys welcome back this is our episode on super staking super staking eth with our friends from rocket pool we have darren who is the general manager at rocket pool also dave who is the cto of rocket pool darren dave great to have you guys back on bank list how's it going i'm good good it's uh great feedback i think last time i had a chat with uh dave it was probably a bit over a year ago now i think so yeah yeah it's crazy the content's already a year old yeah i'm surprised to uh recruit you into david dow yet uh

dave as well matter of fact i'm just talking about that previously so oh yeah um i shall be in there in there surely apparently this is over 200 days in there now which is oh my gosh i just set up your shield david thank you thanks for doing that and how's it going darren no is there a darren dow yet or are you focused on rocket pool still there is there is not a darren dell they might be afraid that's great well it's uh fantastic to

have you both on we've been uh wanting to do this for a while particularly post launch um and i know look this has been the year of eat staking massive year i think tomorrow it'll be a year since the beacon chain launched and eat staking was available and i remember a year ago at this time how all of us were very worried about um issues with the beacon chain like with the launch go successfully and then if it does launch would we get the uh the amount of steak necessary to actually fire up the beacon chain and everyone was worried will we

get you know it was like um how much was it 500 000 we were looking for eath staked was sort of the threshold now we are well beyond that okay we have left 500 000 uh behind and i know rocket pool has been a part of the east staking story from from the inceptions and two weeks ago rocket pool launched on mainnet which is huge because i know you guys have been working to launch this right working to optimize for decentralization i'm going to shout out a few stats

in the first two days of operation rocketpool registered 237 node operators across 42 global locations with a thousand over a thousand each staked that's huge i know it's been more than two days now but i just wanted to say congrats to both of you on behalf of bankless congrats to the rocketpool team the rocketpool community how does it feel to be on the other side of a major launch it honestly after this long it still doesn't quite feel real because we've

been building this now for so long like we were probably the only platform that existed for the previous version of staking which was a smart contract like over three four years ago so it's gonna get through that get through launch get through the ability for smart contracts to receive withdrawals which was a key part to rockable pool being truly decentralized for if they're into staking um yeah it's it's been a ride but we i'm absolutely stoked like we are launched now so it took uh an absolute ton of work our community was has been absolutely amazing through that like huge shout out

to those guys because they've been backing us a hundred percent like there's been there's been delays we've had you know like if you cannot test that we've had five betas up to this point which is certainly for any project to have um and you know we've been through multiple rounds of audits so um yeah the patrons with our community as well and their supporters kind of be like really driven rockford to get to this kind of successful launch so yeah huge shout out to them and basically everyone else that's kind of wrapped up some backed uh decentralized solution to staking today because i mean that is

necessary for the ecosystem uh at large i mean we've seen a large amount of exchanges kind of um you know centralizing a large portion of staking so now hopefully we can kind of counter that with a bounce to our current client diversity at the same time daryn you feeling that too are you feeling that energy how's it feeling on your side it's uh it's been a very exciting ride to be honest um uh we would kind of heads down getting the development done and now that the um uh now that the it's actually launched

um it's um kind of fantastic actually a little update on the kind of numbers um so we're 25 000 8 at the moment and being staked across um across rocket pool sorry yeah [Laughter] that's all right i am going to turn that off completely yeah darren you your friend running us on the numbers uh twenty five thousand each staked uh how many noted operators do you have now

uh so 450. 450 node operators uh across um 59 global locations and so yeah so it's it's it's really kind of going well um it's actually been uh so we've actually only really been operating for 10 days um yeah kind of full board um the the rest of the time we were um kind of going through a staged a staged launch and so we were kind of staggering out our launch we've only really been operating for 10 days so to get that far

in there is we've kind of blown away so it's amazing so now just to be clear there are no governors on there was previously some caps in terms of i know when you first launched how much it could be deposited but now all of those governors are gone uh it's completely open for anyone to uh to stake their eth there's no cap or governor on top of is that correct that's right exactly yeah you have a deposit pool size limit but that's baked into the protocol as a kind of a safety mechanism so uh beyond that that's two

thousand others so um yeah if the deposit pool ever kind of gets that maximum amount and there's no no deal pros coming online then the commission rate for new node operators take that other goes up significantly to kind of incentivize them to come on so that's the only kind of real cap that we have at that moment but it's actually part of the protocol right it's a resource management part of the protocol right mm-hmm exactly exactly so the the more error that's in rockford isn't staking kind of drags down the boards for um r8 users so we can't have too much of that which is what we kind of limit it to 2000 which is a pretty pretty hefty

amount but still not so much it will drag down it will like it would add uh idle letter to the to the protocol just something we don't want too much of and uh listeners who are familiar with the dynamics of each staking might notice that this is actually kind of a fractal off of how each staking works where uh the the more and more ease supply that's applied to the ethereum protocol uh the more total ether is issued but the less ether is issued on a per individual unit basis and rocket pool is managing the supply in a similar way if there is more if if

more nodes need to come to rocket pool because the rocket bull has plenty of eath staked more rpl will be issued to nodes to incentivize them to spin up more nodes so it's kind of it's uh creating an equilibrium based off of the the available resources that needed to be added to the rocketpool network that that'll correct yeah that's yeah that's that's pretty close yeah so we have we have um we essentially cater to two main uh user groups and we have users that want to kind of stake uh doing a liquid staking with the the r8 token this is basically a token that you hold that gains rewards over time based

on the average performance of all the validators in the rockpool decentralized network so that's these are guys that would you know typically not want to run a no would just be happy to kind of sit on um you know token the games rewards over time based on the performance of the decentralized network and the other the other half of the audience is obviously the node operators that need to do the staking so these are the guys that are really kind of backbone in the network and they have the most again um by participating in rocketpool so they could stake their own other outside rocket pool but if they come inside rockpool they also earn a

difficult commission and also rpl rewards on top of that to incentivize them to join the protocol and you know kind of help out with decentralized staking so we actually have so much to talk about with we want to talk about our eth because the market for staked east derivative tokens i think is going to be really really big we definitely want to fully unpack the rpl token um so but before we go in and talk about all the subjects all at once i actually want to back up and kind of just give listeners a quick little history lesson about rocket pool and how it came to be and why what was the

motivation for designing rocket pool at all so can you guys just kind of speed run us through the last like three to four years of rocket pool history and how you guys have gotten to be where you are um yeah i can probably start out that so uh back in about mid 2016 um there was a um oh it was kind of on the road map for ethereum that time was you know the proof of stake uh previous stack then back then was actually done through a smart contract the beacon chain as we know today didn't exist back then it was all going to be deposits into a smart contract and whatnot and back then these

deposits uh originally started out at 32 8 then they kind of realized that scaling involved to have a smart contract kind of dolling out rewards and all that would basically clog the network so you need in order to uh kind of get around that they raised the staking cap to i think was a thousand other per validator which is by today's standards it would just be absolutely astonishing so um so yeah obviously back then they realized that was a huge issue um i was kind of looking for a project oh i personally i've been in the blockchain

scene since about 2013. um and i was you know well aware of ethereum was kind of looking for a project to kind of sync my teeth into learning about smart contracts uh so i was insanely interested in them at time i thought it was absolutely amazing concept um yeah so basically came up with the idea you know such a high amount of error whether it's 32 or a thousand back then you know people would obviously need to kind of combine their other together in order to earn rewards so um yeah i started on prototype of rocketpool way back then based on uh something called the move paper which is

a paper that vitalik put out i think it was in mid to late 2016 and this basically outlined the functions that would be embedded into these early smart contract version proof of stakes that allowed me to kind of write rock and pool to plug into that because we already had a pretty early definition of how the functions would work so anyway fast forward about another nine months after that um i think it was about mid 2017 released the alpha version of rocket pool um from there it got absolutely massively

good reception uh on reddit and a few other busy ethereum hubs at the time um yeah and since then we've basically just gone through um we obviously we also did a token uh sale 2017 that uh happened about three months before the bear market did so we um that was timing-wise that was interesting but we basically got away on a pretty compact team for the next uh year until around 2018 when we released our first beta the same week they announced they were pivoting to the beacon chain

so so we still went ahead with that beta anyway i think we were the only the only project to ever actually use the previous version proof of stake uh for ethereum so you could kind of say rocket pool was operating previously a couple of years before it was even available can we just pause there dave for a minute because like i i just want folks who who weren't there in 2018 to to realize this so like i remember this very clearly and um proof of stake was going to launch in 2018 that smart contract

proof-of-stake version on ethereum in fact it was like written into some of the clients i believe that like the code was was ready the code is prepped and then i recall uh some kind of meeting of the minds with ethereum core devs and researchers and they did like a complete rug pull on it is what it felt like to be a member of the community at that time like i know there were good reasons for it and it totally makes sense uh retrospectively but for someone working on staking

for the previous like 18 months two years how did that feel and like why did you stick with ethereum during that time guys um well personally i was always a pretty pretty massively into the theorem i just like i said i love the concept of smart contracts that wasn't really available anywhere else at the time so i pretty much embedded myself in the ethereum ecosystem and a lot of people i met along the way were super nice and lovely people as well so it was just a pleasure to kind of work in that environment uh

at that time though when that did happen i mean that that was a pretty big shock we actually heard rumors uh maybe a week or two before it officially landed uh that that was possibly what was going to happen so that was just a rumor at the time i don't know lang as you you're around then as well when this was kind of going down um so yeah basically once that happened um we pretty much just had to uh take a really close look at the kind of the new proposed system uh see what elements rockpool would carry over to that one luckily most of the core

concepts the way we kind of organize deposits into midi pools which is our version of validator most of that still you know carried over quite quite well obviously we weren't baked into uh you know a layer one uh kind of system as much because now we have to do depend on two different chains chains the beacon chain and the layer one chain uh so that required some a couple of additional fixes but at the time it was yeah it was a little it was a little hairy and um yeah honestly it was it was a bit

disappointing because i mean when you put work into something for two plus years and you don't really get an official heads up before the main announcement comes out yeah that was that was a little bit of a gut punch but you know we we we rolled with it and um yeah we're still here so language was actually around then too so i actually want to throw in and i think it's like this yeah well i think once um once the the shock had worn off a little bit uh the realization especially when you and dig into uh what was produced at that point

um why they were doing it um what the new beacon chain would look like and that sort of thing uh from somebody who is kind of quite deep into it uh it made so much more sense um and uh the the design that we've ended up with is is so much better than it would than it would have been so um it kind of uh it that that kind of made it bittersweet i guess it was definitely um uh definitely much better worth the weight worth the weight and this is why i think

this the rocket pool story i think is just a fantastic just like again fractal off of the the larger ethereum story where the ethereum story is like man we really got to figure out this proof of stake thing let's start building it oh no we need to go in a different direction meanwhile you have the rocket pull team like you know waiting for the ethereum proof of stake to actually like exist so it can build its thing right and so like trying to be running and developing in parallel with ethereum while ethereum is trying to figure it stick out uh and then once once ethereum

actually does commit to one specific road map well then now then the rocket pool community can actually actually inject the energy into the finalized you know solidified foundation and so like where like all the ethereum people were like waiting for proof of stake proof of sake although the rocket pool people people were waiting for rocket pool who was waiting for proof of stake right it was just like this uh this fractal of these communities just playing off of each other yeah that's that's very much it so i think that being on the being on

the edge is uh is a lot of fun um as long as you don't fall off too many times um but uh it's it it's definitely fun we're kind of working at that at that bleeding edge and definitely one of a similar um motivations like you know people stuck to ethereum because they believed in ethereum and you guys talked to rocket bull because you believe in rocket pool but let's back up and just articulate for the listeners why why it was so obvious that something like rocket pool would need to be built so early in ethereum's lifespan like like dave

you're you're looking at ethereum you know it's committed to proof of stake and all of a sudden you realize that like oh these this thing called a decentralized staking pool must need to exist at some point in time why did you know that that was true what and what is the rocket pool vision um so basically at the time um yeah around 2000 mid 2016 when i kind of came up with the concept um bitcoin was obviously you know the king at time it is still to some degree but back then um it was pretty much concentrated around a couple of months i mean and that was

kind of the trajectory that ethereum is going to head on with proof of stake as well um if you know a decentralized solution didn't quite present itself so um that's what really made me put my head down and kind of kind of come up with the initial concept of how it would work um it's it's taking a long time to get here so it wasn't an easy thing to produce but um yeah it's i mean as far as rocket pool itself goes um i think the main thing i'm probably you know proudest of is obviously the decentralized nature of it and also the

client diversity because that's something that we really kind of need to um promote uh within ethereum itself uh especially obviously with the staking because currently there is it is centralized around kind of one main client and again that's not a healthy thing for the ecosystem so we are pretty much all about kind of um you know enabling ethereum to be a healthy ecosystem and not to centralize around any central aspect so that's quite what we've been promoting essentially darren anything to add on to that

uh yeah so i think i mean we've only really been in operation for a little while so it's it's difficult to tell um but we are already kind of seeing a bit of an effect on the client diversity um we've implemented uh in our kind of the way that you install our software and we have a thing that essentially suggests if you if you um choose prism we suggest you know you can you can still choose prism if you want to because we're not

going to censor clients but um we suggest you choose another client um we're already kind of seeing that in some of the proposal numbers and from the rocket pool proposes um that um lighthouse is is definitely popular but other um clients as well are very popular so nimbus is very popular and and taku as well and prism is kind of a smaller percentage of our uh kind of node base so far and that will obviously change over time but it's we're already kind of seeing

that which is really nice to see and of course a big part of the the rocket pool story is actually um reducing the barriers to entry for east staking right uh once again like they've said once upon a time it actually was required to have a thousand ether to stake in order for proof of stake that has since changed down to down to 32 but then also 32 east has moved from you know where it used to be at ten thousand dollars up to where it is now with that over uh i'm not gonna on the fly math but over hundreds of thousands of dollars yeah

320k let's just say that let's imagine a world where eat this 10k already i'm living in the future david [Laughter] ryan's hiding the fact that he can't do quick math either but so yeah so like 130 to 300 320 000 like or you know this is it's too much for one person uh but also that's not only that's not only uh the whole story either because the cool thing about rocket pool is if you don't have eth you can bring a node and

if you don't have enough uh nodes you can bring your eth right and so like which which of the resources do you want to bring to the network because rocketpool can can match make uh between the node suppliers and the east suppliers and and uh correct me if i'm wrong but i think of all staking as a service providers out there uh i think that the next highest one is only coming in at like 13 individual nodes where rockpoot rocketpool is clocking in at over 400 and also doesn't have any constraints on the total number of nodes that can be contributed to the overall

overall network uh is that right yeah that's correct um yeah so it's obviously um built in the protocol that we incentivize these node operators join and it works we don't restrict any one party uh pretty much if you uh can register a node with our network uh with the protocol i should say um then yeah you're free to free to join i mean everything's balanced within rockville through incentives built into the protocols we don't need to enforce uh any kind of restrictions on location or anything uh everyone should work in everyone's best interest based on the kind of tokenomics and mechanics that

are in the protocol so it's permissionless for nodes to join the network i i want to maybe share some some metrics here this is um on the dune dashboard on dune analytics dashboard on rocketpool so just making sure that uh everybody listing kind of understands some of these numbers here so the total ether amount staked is over 24 000 as we mentioned uh total each submitted to rocketpool is there some eth like that's pending in a pool because this number is 20 over 27

000. what does this number tell us yeah so there's there's a deposit pool um that is uh actually i need to double check where those numbers come from but um there is a deposit pool here so there's um uh you deposit into uh our 8th stake is deposit into a deposit pool and then that gets matched with um 16 eth from other operators and then we have 450 registered node operators so these are

individuals or you know companies or groups whatever these these are individual nodes inside of the network do each of these 450 represent an independent entity or do you have any any way of knowing whether they do or not we pretty much only require a node address to to be registered so we we can't tell we don't hold any specific information about any node operators or anything um it's part of being a permissionless kind of a protocol so you they are free to register from wherever

they are but one thing we do provide is when they do register they have the option to also register their time zone so this kind of gives us a really good and this is auto detected from the system so uh if you if you do register your time zone and it is auto detected um yeah we can we have a network map which builds out which shows you how diverse the actual node operator base is so if you actually go to our website you can view a network map where we display this out for everyone to see so you'll basically see nodes from all across the world so yeah it should be a stake dot rocket

pool don't it state.rocketpool.net yep and this will show uh let's see i'm just pointing yes now if you uh go to the side there that little side menu and you click on yep should be a network map yeah so that's that's the network map yeah so that that's built out of the uh nodes that registered