Basic Course
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3.1
Overview
As a high level overview, Rocket Pool is a wrapper around the solo-staking experience that makes staking easier, less capital intensive, more profitable and provides more diverse investment opportunity without sacrificing the trustless or decentralized principles of Ethereum.
For those wishing to run a node and activate a validator, Rocket Pool's collection of software (the smartnode stack) provides a layer of abstraction to make setup much easier than solo-staking. Not just easier because of the configuration files and smart contracts to guide the user, but also the extensive documentation, community and support.
Activating a validator can be done for as little as 8 ETH + 2.4 ETH of RPL1 as opposed to 32 ETH for solo-staking. The chance to run validators by pooling with non-node operator ETH means greater rewards in the form of commissions and RPL inflation sharing.
In addition, those who don't want to run a validator would have no options if only solo-staking existed. With rETH, Rocket Pool's Liquid Staking Token (LST), anyone can earn staking rewards and help keep Ethereum decentralized just by minting or buying rETH, which can then be further used in many other Decentralized Finance (DeFi) applications.
Holding plain ETH is like keeping cash under your mattress. You are losing potential value. Just as you put large amounts of cash into money markets, savings accounts, etc., ETH can be put into rETH.
Let's look further at the two major divisions of the Rocket Pool protocol:
1 RPL is a Rocket Pool token used for governance and protocol funding (see section 4.2).