Starknet Native Staking Goes live
Getting Started with Staking on Starknet
ETH L2 network, Starknet has taken a bold step towards decentralization by rolling out native staking. Staking is a mechanism used in decentralized networks, particularly in Proof of Stake (PoS) and its variants, where participants lock up a certain amount of cryptocurrency to support the security and operations of a blockchain. Staking is essential for maintaining the decentralized and trustless nature of such networks.
Staking on Starknet requires locking STRK tokens within the staking protocol to help enhance the network's security and efficiency. Holders of STRK tokens can participate in staking either by staking directly or by delegating their tokens to others. Rewards are distributed based on the participant's contribution and involvement in the network.
Why Stake $STRK?
Earn Rewards: By staking $STRK tokens, you receive additional $STRK tokens as compensation for bolstering the network's security.
Enhance Network Security: Your participation in staking directly improves the security and performance of the Starknet network.
Promote Decentralization: staking decentralizes the network and make more resilient.
Understanding The Reward Distribution System
Starknet employs a minting curve to regulate the issuance of new STRK tokens, balancing rewards for stakers with overall network inflation. The annual minting rate (M) is determined by the formula:
Where:
C: Maximum theoretical inflation percentage (initially proposed at 1.6%).
S: Staking rate as a percentage of the total token supply.
This design ensures that as more STRK tokens are staked, the annual minting rate increases, but at a diminishing rate, promoting a balanced approach to inflation and participation.
Reward Distribution
Rewards are allocated to both validators and delegators based on their contributions:
Validators: Earn rewards proportional to their self-staked amount and the total amount delegated to them, adjusted by their chosen commission policy constant (CP). The formula is:
Delegators: Receive rewards based on their delegated stake, minus the validator's commission:
Here, M/S represents the reward rate per staked token, ensuring that rewards are distributed effectively among participants.
Commission Policy (CP)
Validators set a commission policy constant (CP), representing the percentage of rewards they retain from the total rewards generated by delegated stakes. This allows validators to cover operational costs and earn income, while delegators receive the remaining portion of the rewards.
Staking and Unstaking Latencies
To maintain network stability and security, Starknet enforces specific latencies:
Staking Entry: Currently, entry into the staking protocol is immediate.
Unstaking Exit: Upon signaling an intent to unstake, there is a 21-day security lockup period before funds can be withdrawn.
These measures prevent sudden large withdrawals that could compromise the network's economic security.
How to stake
There are different avenues to stake your STRK tokens, we use endur finance to demonstrate below. Check out the Action Zone for more links to different sites where you can stake.
Connect your wallet
Navigate to the “stake” section
Enter the amount you want to stake
Choose a validator in case you want to delegate to a validator
Inspect details, once you are okay, click on stake STRK to continue
Future Developments
This is just the first phase of many phases of a bigger plan to transform Starknet into a fully decentralized Proof of stake network. Below is the full plan.
Action Zone
Use any of these sites for staking.
Read more about Starknet staking