StarkWare, the development company behind the Ethereum Layer 2 network Starknet, proposed a staking plan on Wednesday (10th) to make the blockchain more flexible and decentralized.
According to StarkWare’s team, 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 would involve governance voting.
In a network document dated June 9, 2024, Steve Goodman, Chief Technology Writer at StarkWare, wrote that in addition to transaction fees and protocol governance rights, the utility of STRK will expand to include staking functionality required for certain services crucial 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 terms of launching the first phase of staking, they will test critical 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 phase. 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 STRK, the fewer rewards, and the fewer tokens staked, the more rewards. The purpose of this “dynamic pricing” is to help maintain optimal staking levels. According to the improvement proposal, StarkWare stated that it will propose a governance vote by the Foundation to determine the minting curve parameters and future adjustment procedures. The proposal states:
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