Thread by @SalomonCrypto

(1/21) Lots of reasons to be down right now, let’s focus on something exciting!

THE @ethereum MERGE IS ALMOST HERE!!!

As we celebrate the success of the #ropsten testnet merge, let’s talk $ETH staking.

Continue on for an explainer of @Rocket_Pool

(2/21) Not financial advice.

Special disclaimer: @Rocket_Pool is tied very closely with The Merge, for better or for worse. For worse:

- extra exposure to any potential delay/failure of The Merge
- Staked $ETH and $RPL is locked >6 months

https://mobile.twitter.com/SalomonCrypto/status/1535709103254687745

(3/21) The world is a mess right now. The charts make it glaringly obvious, but charts are the later signals that the world is off track.

It seems like many of our worst issues can be boiled down to trust; when I think of the future @ethereum promises, I see a way forward.

https://twitter.com/salomoncrypto/status/1522950606876332032

(4/21) There have been a few inflection points that mark radical changes in @ethereum:

- Genesis
- DAO Hack
- Shanghai Attack
- DeFi Summer
(🤷‍♂️, what else should be in here?)

And coming soon, perhaps the biggest moment since the start:

The Merge

ethereum.org/en/upgrades/me…

(5/21) Tl;dr The Merge is the changing of @ethereum’s consensus mechanism from Proof of Work (PoW) to Proof of Stake (PoS).

We’re in the home stretch. PoS is coming

(Link timestamped)

(6/21) Out with PoW and miners, and in with PoS and validators!

Interested in being a validator? You’ve got lots of options!

Interested in the most decentralized and lucrative (NFA) option?

Let me teach you about @Rocket_Pool

(7/21) @Rocket_Pool (RP) is a decentralized @ethereum staking platform. RP aims meet the needs of:

- $ETH stakers who don’t have the resources/expertise to do it themselves
- node operators seeking to minimize maintenance and maximize profit
- the decentralized Ethereum network

(8/21) Don’t have a lot of $ETH or any desire to take on the responsibility of a node?

Just deposit any amount of $ETH into @Rocket_Pool and received $rETH (liquid staking derivative). $rETH will capture $ETH staking rewards, but allow it to remain available for DeFi or sale.

(9/21) But maybe you are interested in securing @ethereum and running a node. I was.

First, I looked into what that entailed… turns out a validator is actually two pieces of software: a consensus client (eg @ethnimbus) and an execution client (eg @go_ethereum).

(10/21) You have to dedicate a computer, pick two unrelated pieces of software, install, maintain and secure everything yourself.

You’re about to throw 5-6 figures into this thing. It’s important to feel confident that you can conduct this orchestra.

(11/21) @Rocket_Pool takes care of most of this for you. RP is an environment that is built by expert stakers for smol brained stakers (me).

You have to be comfortable with the command line; if you are, RP will take care of everything for you. Installation, monitoring, updates.

(12/21) I cannot emphasize enough just how good the support is. @Rocket_Pool is incredibly well documented and the process is simple (though long).

But, more importantly, there’s ALWAYS incredible, enthusiastic support in discord (for real, study them).

docs.rocketpool.net/guides/node/re…

(13/21) Ok let’s talk about economics. Normally, being a node operator requires 32 $ETH. @Rocket_Pool cuts that requirement in half

When an operator deposits 16 $ETH, RP contributes the other half (using the $ETH deposited for $rETH)

The operator makes a commission on RP’s $ETH

(14/21) I’m not going to get into the weeds, but let’s just say that the $ETH provided by @Rocket_Pool is mostly safe. The one realistic risk is the risk of slashing.

Rocket Pool uses the $RPL token to balance this risk. In order to participate, node operates need to stake $RPL.

(15/21) In the event of slashing, @Rocket_Pool has a liability ( $rETH) that is no longer backed. Rocket Pool will liquidate an appropriate amount of the node operators $RPL to replace the $ETH

While the $RPL is staking, it is generating yield (currently ~12% vs $ETHs ~4%).

(16/21) The result? A @Rocket_Pool node operator:

Requires:
- 16 $ETH per validator (vs 32 for standard node)
- $RPL insurance (vs none for standard node)

Benefits:
- boosted yield (via commission)
- $RPL staking yield
- incredible support

(17/21) With @Rocket_Pool, everyone benefits:

- depositors gets $rETH, a liquid staked $ETH derivative
- node operators gets an improved experience and more attractive incentives
- @ethereum gets a decentralized staking network contributing to PoS

(18/21) The Merge is just around the corner, everyone should be PUMPED!!!

But there’s still some work to be done before we’re ready.

(19/21) The biggest issue staring us in the face: @LidoFinance. Lido is an incredible protocol, but it’s dominance is a lurking disaster

I’m referring to staking centralization, but Twitter is so clogged with $stETH-peg posts I couldn’t find a Tweet

😰

google.com/amp/s/cryptosl…

(20/21) Don’t worry about the engineering, the devs are doing what need to be done. But this is The World Computer, we all have a role to play.

Degens - consider $rETH for your liquid staked $ETH
Validators - consider spinning up more nodes
Lurkers - consider being a validator

(21/21) This is The World Computer, we all have a role to play.

Everyone:

KEEP BUILDING!!!

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https://twitter.com/salomoncrypto/status/1536722681009098754