Rocketpool Rewards
Last updated
Last updated
To the Beacon Chain, a Rocketpool validator is the same as a solo validator in every aspect.
Your Rocketpool validators will receive the same rewards and penalties as Solo validators on both the Execution and Consensus Layers. The only difference lies in the destination of the rewards:
Execution Rewards
Sent to the Fee Recipient Address
Immediately available upon block production
Sent to the Smoothing Pool Address
Smoothed rewards available for claiming at checkpoints every 28 days
Consensus Rewards
Accrue on the validator
Balance above 32 ETH is periodically "skimmed" to the Withdrawal Address
Accrue on the validator
Balance above 32 ETH is periodically "skimmed"to the Minipool Address
To understand the nature of these rewards and how to track them, please refer to the Validator Rewards and Penalties page for Solo Stakers. Just keep in mind that there will be different arrangements for Fee Recipient Address and Withdrawal Address compared to Solo Stakers.
In addition to the Execution and Consensus Rewards, Rocketpool Stakers also receive RPL Rewards based on the amount of RPL tokens they have staked.
Let's revisit the Rockerpool Staker's Journey to provide some context:
From the perspective of the Beacon Chain, the Consensus Rewards are "skimmed" to the Beacon Chain withdrawal address during each Validator Sweep. For Rocketpool validators, the withdrawal address is defined to be the Minipool Address.
The rewards accumulate in the Minipool Address until the balance reaches 1 ETH. At that point, the rewards are automatically distributed between you (the node operator) and the rETH stakers, taking into account the commission rate. Your portion of the rewards will be sent to your Rocketpool Withdrawal Address, which you set up when initializing the node. You can check this Rocketpool Withdrawal Address on the Status page of the AVADO Rocketpool DApp.
To estimate the amount of Consensus Rewards you will receive:
Look up your Minipool Address on etherscan.io.
Note the ETH balance, as this is the amount that will be distributed between you and rETH stakers once it reaches 1 ETH.
For an 8 ETH minipool, you "own" 25% of the minipool, while rETH stakers "own" the other 75%. With a commission rate of 14%, your expected share of the minipool balance is (25% + 75% x 14%) = 35.5%.
For a 16 ETH minipool, you "own" 50% of the minipool, while rETH stakers "own" the other 50%. With a commission rate of 15%, your expected share of the minipool balance is (50% + 50% x 15%) = 57.5%.
Once the minipool balance reaches 1 ETH, your share of the rewards will be automatically distributed to your Rocketpool Withdrawal Address.
Execution Rewards are typically sent to the fee recipient address when a block is produced. For Rocketpool validators, the fee recipient address is defined to be the Smoothing Pool Address.
This means that all block rewards, including tips and MEV-Boost rewards, are automatically sent to the Smoothing Pool. These rewards accumulate in the pool and are later split between rETH stakers and participating node operators at the end of a 28-day checkpoint cycle.
To get a view of how the Smoothing Pool is performing, you can visit the Smoothing Pool page on rocketscan.io.
When distributing the rewards between rETH stakers and node operators, Rocketpool considers various factors such as the commission rate, the node operator's attestation performance, and the length of opt-in.
At the end of each checkpoint cycle, the rewards for that period become claimable. You can claim these rewards on the Rewards page of the AVADO Rocketpool DApp. However, it's not necessary to claim the rewards every cycle. You can let the rewards accumulate and claim them at a later cycle if desired.
To find out the date of the next checkpoint, you can check the beaconchain phone app and look for the Next RPL Round under the Rocketpool section.
In addition to the Execution and Consensus Rewards, Rocketpool Stakers also receive RPL Rewards based on the amount of RPL tokens they have staked. In the above example, the RPL Annual Percentage Rate (APR) was 8.55% at that time.
The RPL Rewards for each checkpoint period become claimable alongside the Execution Rewards. Similar to the Execution Rewards, it's not necessary to claim the RPL rewards every cycle. You have the option to let them accumulate and claim them at a later cycle if desired. Additionally, you can choose to restake the RPL rewards, which will increase your staked RPL balance.
It's important to note that in order to qualify for RPL Rewards, your RPL stake must be above the required minimum, which is equivalent to 10% of the borrowed funds. For example, if you have an 8 ETH minipool, you are effectively borrowing 24 ETH from the protocol. Therefore, you will need to have at least (24 ETH x 10%) = 2.4 ETH worth of RPL at the time of the checkpoint in order to receive any RPL Rewards. Make sure to meet this minimum requirement to be eligible for RPL Rewards.
Because the relative price of RPL to ETH fluctuates, you may need to "top up" your RPL stake by staking more RPL before the checkpoint to ensure you remain eligible for RPL Rewards.
From Rocketpool documentation:
If you are below 10% during the checkpoint, you will not be eligible for any rewards for that interval. Even if you increase above 10% at a later date, you will not have any rewards to claim for that interval. Therefore it is crucial that you maintain at least 10% collateral at the time when each RPL reward checkpoint is reached.
To summarize, Rocketpool Stakers receive three streams of rewards:
Consensus Rewards: These rewards accumulate on the Minipool Address and can be distributed once the balance reaches 1 ETH.
Execution Rewards: These rewards accumulate on the Smoothing Pool and become claimable on a 28-day checkpoint cycle.
RPL Rewards: These rewards are based on your RPL stake and become claimable alongside the Execution Rewards. However, to be eligible for RPL Rewards, your RPL stake must be above the minimum requirement of 10%. You can also choose to restake the RPL rewards.
All of these rewards, once distributed, will be sent to your Rocketpool Withdrawal Address.
You can claim the Execution and RPL Rewards on the Rewards tab of the AVADO Rocketpool DApp.
Some explanations are in order. On this page:
A: Ethereum rewards
First line: "You have earned x.xxxx ETH from the Beacon Chain (including your commissions) so far". This refers to Consensus Rewards accrued on the validator balance, which have not yet been skimmed to the minipool address. It should equal 35.5% (for 8 ETH pools) or 57.5% (for 16 ETH pools) of your current validator balance above 32 ETH.
There is also a component of Consensus Rewards that has been skimmed to the minipool address, but has not yet been distributed because the balance has not reached 1 ETH. Unfortunately this portion of the rewards is not shown on the Rewards page. You can check the balance of your Minipool Address, where you have a 35.5% share (for 8 ETH pools) or 57.5% (for 16 ETH pools) of that balance.
Second line: "You have claimed x.xxxx ETH from the Smoothing Pool". This refers to the cumulative Execution Rewards that you have already claimed from the Smoothing Pool at the end of previous checkpoint cycles.
Third line: "You still have x.xxxx ETH in unclaimed Smoothing Pool rewards". This refers to the amount of Smoothing Pool rewards that are claimable but have not been claimed. You can let the rewards accumulate and claim them at a later cycle if desired.
B: RPL rewards
First line: "The current rewards cycle started on [date/time]". This refers to the current checkpoint cycle, which will end 28 days after this date.
Second line: "You currently have x.xxxx unclaimed RPL from staking rewards". This refers to the amount of RPL Rewards that are claimable, but have not been claimed. You do not need to claim them immediately. You can let the rewards accumulate and claim them at a later cycle if desired. You also have the option to restake the RPL.
Third and fourth line: "Your estimated RPL staking rewards for this cycle: x.xxxx RPL" and so on. This is an estimate based on your RPL stake and the prevailing RPL APR.
Fifth line: "You node has received x.xxxx RPL staking rewards in total". This refers to the cumulative RPL Rewards that you have already claimed from previous checkpoint cycles.
C: Claim
These are the actual ETH (from the Smoothing Pool) and RPL tokens that are claimable at this time.
D: Claim options
Claim all rewards: Claim the ETH and RPL rewards and send them to your Rocketpool Withdrawal Address.
Claim and restake RPL rewards: Claim the ETH rewards and send them to your Rocketpool Withdrawal Address. Claim the RPL rewards and restake them to increase your RPL stake balance.
As mentioned, there is another rewards component that is not visible on the Rewards page. These are the Consensus Rewards which have been skimmed to the minipool address but not immediately distributed until the balance reaches 1 ETH. This approach helps save on gas costs and avoids frequent small-value transfers. For most users, the default behavior is suitable.
Tips: Manually distribute the accrued Consensus Rewards on the Minipool Address
If you wish to manually distribute the accrued Consensus Rewards on the Minipool Address, you can follow these steps:
Go to the Admin page of the AVADO Rocketpool DApp.
Scroll down and locate the Run a Manual RPD command panel.
In the box, type:
minipool distribute-balance your-minipool-address
Replace your-minipool-address with your actual Minipool Address, then click Run. Wait for the on-chain transaction to be processed.
Note: make sure you have some ETH in your Hot Wallet to cover the gas fees.
