StarkWare, the development company of the Ethereum Layer 2 network Starknet, proposed a staking plan on Wednesday (10th) with the aim of making the blockchain more flexible and decentralized.
According to the StarkWare team’s Starknet Network Improvement Proposal (SNIP) submitted to the network’s GitHub page and forum, the first phase of staking will go live on the Starknet mainnet in the fourth quarter of 2024 if it receives community support. Nathan Jeffay, spokesperson for StarkWare, stated in an interview with “Unchained” that the community’s “acceptance” of the staking plan process will involve governance voting.
In a network document dated June 9, 2024, Steve Goodman, Chief Technology Writer of StarkWare, wrote that in addition to transaction fees and protocol governance rights, the utility of STRK will also expand to include staking functions required for “certain services that are critically important to the activity and security of Starknet.” These services may be provided by multiple providers and may include ordering, achieving temporary L2 consensus before L1 finality, STARK-proving services, and data availability supply.
StarkWare stated that in the first phase of staking rollout, they will test crucial smart contract components and the economic incentive structure of the protocol, which aims to balance several factors: incentivizing staking participation, maintaining a sustainable inflation rate, and reserving sufficient STRK for other network purposes.
The proposal indicates that in this initial stage, stakers are expected to run a full node, interact with the staking smart contract, and follow the staking rules proposed by StarkWare. Neither StarkWare nor the Starknet Foundation will claim staking rewards in this initial major stage. Subsequent stages will require stakers to engage in ordering and proving activities to ensure network security, which will require additional verification software.
Staking rewards will be determined by a minting curve algorithm, where the more locked-up STRK, the fewer the rewards, and the fewer staked tokens, the greater the rewards. The purpose of this “dynamic pricing” is to help maintain an optimal staking level. According to the improvement proposal, StarkWare stated that it will propose the foundation to hold governance voting to decide the minting curve parameters and future adjustment procedures. The proposal states:
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