Starknet Community Greenlights New Staking Mechanism for STRK Tokens

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The Starknet community has voted overwhelmingly to approve a significant update to its staking mechanism, marking a key step forward for the Ethereum Layer 2 (L2) network.

With nearly 98.94% of voters backing the proposal, the new system introduces a dynamic minting curve for STRK tokens, aimed at incentivizing staking while managing the token supply.

In an interview, James Strudwick, executive director of the Starknet Foundation, emphasized the importance of this development, stating that it provides the network with a robust framework for future growth. He called the approval a “milestone” in the network’s evolution.

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Eli Ben-Sasson, CEO of StarkWare, echoed this sentiment, pointing out that this decision not only encourages staking but also gives the community a tangible role in shaping Starknet’s future.

The Dynamic Minting Curve

The heart of the new staking mechanism lies in a dynamic minting curve inspired by Professor Noam Nisan’s “Proposal 2,” with minor adjustments to better suit the network’s needs. This feature allows the system to adjust the supply of STRK tokens in proportion to staking participation rates, ensuring that token inflation remains controlled.

The minting rate, represented by M, will be determined by a formula that scales with staking rates, or S, and a constant C, initially set at 1.6%. This mechanism is designed to balance token issuance and network participation, adjusting as staking levels fluctuate.

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Minting Authority

The Starknet Foundation will hold the authority to modify the minting constant, but within a strict range of 1.0% to 4.0%, depending on staking levels. For example, if participation dips, the constant can be raised to encourage more staking. Conversely, if too many tokens are staked, it can be reduced. Transparency will be ensured through a mandatory two-week public announcement before any changes are implemented.

Community Response

Despite the overwhelming support, a small faction, representing just 0.61% of the vote, opposed the proposal. Notably, only 79.65% of the total voting power contributed to the decision, with approximately 1.4 billion STRK tokens cast.

This development follows closely after the Starknet-powered ZKX Protocol was forced to shutter its services due to low engagement. However, with the introduction of the new minting curve, Starknet aims to boost user activity and staking engagement, positioning itself for a more dynamic future.