Rocket Pool ETH (rETH) is the liquid staking token of the Rocket Pool protocol. This token signifies the amount of Ethereum (ETH) that is staked and earning rewards under Ethereum's Proof-of-Stake mechanism. As node operators within Rocket Pool stake Ethereum, the rewards they earn enhance the value of rETH relative to ETH. This liquid staking token enables holders to enjoy the benefits derived from Ethereum's staking rewards.

Overview of the staking process

In the Rocket Pool system, stakers deposit ETH into a pool, which allows node operators to establish a Beacon Chain validator. In return, stakers receive rETH, reflecting the deposited ETH and the time of deposit. This token's value grows as Rocket Pool node operators earn rewards from various sources:

• The Beacon Chain
• Priority fees from block proposals
• MEV (Maximal Extractable Value) rewards from block proposals

The value of rETH is calculated using a specific ratio:
rETH:ETH ratio = (total rETH supply) / (total ETH staked + total rETH contract balance + total rETH share of priority fees + total rETH share of MEV rewards).

The rETH value consistently increases in comparison to ETH due to the ongoing accumulation of rewards from the Beacon Chain, priority fees, and MEV rewards. This exchange rate is updated regularly, approximately every 24 hours, based on the rewards earned by Rocket Pool node operators.