Risk Assessment
Rocket Pool Risk Assessment
Overview
Rocket Pool is a decentralized Ethereum staking protocol that enables users to stake any amount of ETH while receiving rETH, a liquid staking token. Unlike centralized alternatives, Rocket Pool uses a permissionless node operator network where anyone can run validators with just 8 ETH (plus RPL collateral).
rETH is described as “the purest liquid staking token in DeFi” due to its fully distributed and trust-minimized design.
Smart Contract Risk
Contract Architecture:
- Trust-minimized smart contracts handle deposits and rewards
- Minipool contracts manage individual validators
- RocketStorage provides upgradeable registry pattern
- Watchtower nodes monitor network health
Code Quality:
- Audited by Sigma Prime, ConsenSys Diligence, and Trail of Bits
- Atlas upgrade audit completed
- Open source with comprehensive documentation
- Bug bounty program active
Attack Surface:
- Node operators cannot access depositor funds directly
- Minipool design isolates validator risk
- Oracle DAO provides off-chain data
- Slashing penalties shared across depositors
Admin/Governance Risk
Governance Structure:
- Protocol DAO (pDAO) for on-chain governance (Houston upgrade)
- RPL token holders vote on proposals
- Oracle DAO (oDAO) handles off-chain data submission
- Guardian multisig for emergency functions
Oracle DAO:
- Elected node operators submit validator performance data
- Strong trust assumption in oDAO member behavior
- Effectively custody user funds through data submission
- Multiple independent members provide redundancy
Houston Upgrade (2023):
- Introduced on-chain governance via Protocol DAO
- Improved flexibility for node operators
- Governance now more decentralized
Trust Assumptions:
- oDAO members must behave honestly
- Node operators post RPL collateral as bond
- Slashing risk distributed across all depositors
- No dedicated bond per depositor
Oracle Risk
Decentralized Oracle DAO:
- Elected node operators submit data
- Multiple independent data sources
- Consensus required for submissions
- Manipulation requires majority collusion
Oracle Security:
- Distributed responsibility across oDAO
- Economic incentives for honest behavior
- RPL stake at risk for misbehavior
- Watchtower nodes provide monitoring
Economic Risk
Liquidity Risk:
- 635,000+ ETH staked as of 2026
- 4,000+ independent node operators
- rETH/ETH liquidity on major DEXs
- Withdrawal mechanism via fresh deposits or minipool exits
Withdrawal Considerations:
- Exit requires fresh ETH deposits or node operator exits
- Arbitrage may be limited during severe market stress
- No instant withdrawal guarantee
- Queue-based withdrawal system
Operational History:
- Mainnet launched November 2021
- Houston upgrade December 2023
- Saturn upgrade planned February 2026
- No major smart contract exploits
Stage Assessment
Stage 1 Criteria Met:
- Governance-controlled upgrades with timelock
- On-chain Protocol DAO governance
- Distributed node operator network
- Multiple independent audits
- 3+ years operational track record
Why Not Stage 2:
- Oracle DAO introduces trust assumption
- Contracts upgradeable via governance
- oDAO members effectively custody funds
- Slashing shared (no per-depositor isolation)
Justification: Rocket Pool achieves Stage 1 (Limited Trust) status due to its permissionless node operator design, on-chain governance, and distributed architecture. The protocol represents the most decentralized liquid staking option available. However, the Oracle DAO trust assumption and upgradeability prevent Stage 2 classification. The transition to more decentralized governance should be monitored for potential stage advancement.