Starknet has made a major step forward in its journey towards full decentralization, becoming the first major Layer 2 (L2) rollup to implement a staking mechanism directly on L2. The opportunity of staking tokens on an L2 contract and receiving rewards for advancing the protocol—is part of Starknet’s gradual transition from its current architecture to a proof-of-stake (PoS) protocol.
Aiming for broad participation
From the beginning, Starknet has always had the goal of moving operational responsibilities to the community as part of a comprehensive roadmap toward full decentralization. This vision aligns with the long-held Web3 ethos of resisting centralization and maintaining control of one’s assets and digital life. It also embodies a commitment to broad participation, ensuring that Starknet is operated and used by a diverse and inclusive ecosystem that protects its network from the undue influence of any single entity. Broad participation eliminates the risks of single points of failure and achieves censorship resistance—critical elements of a strong, permissionless, decentralized system. Staking on Starknet is a significant step toward achieving this vision.
For a better understanding of the role staking plays in blockchain, read this blog post.
Staking STRKs
Anyone holding STRK in their crypto wallets can stake their tokens on Starknet either as a validator or a delegator.
In this first phase, validators stake a minimum of 20K STRK and are required to run a full node in preparation for future staking phases, which will entail further responsibilities and contributions to network maintenance and security.
If you want to become a validator, please see this guide.
Delegators can stake by selecting a validator to run the necessary software on their behalf, and will share their rewards with the validators of their choice. There’s no minimum STRK entry point for delegating a stake, and delegators can freely transfer their stake from one validator to another according to their discretion. There are various easy ways to delegate a stake, such as through Starknet native wallets (Argent or Bravos) or DeFi dApps.
Be sure to check our delegator guide.
Phase 1 of STRK staking is about to kick off a new era for Starknet. We expect staking to bring about a vibrant market of validators that delegators can stake with, a broad range of dApp integrations, and brand-new DeFi use cases, including exciting liquid staking token (LST) action.
Staking deep dive
Let’s get to know the functionalities of our new staking protocol, its current economic parameters, and its security measures.
Staked STRKs get ‘locked up’ on special Layer 2 contracts. Rewards are issued by minting new STRK tokens according to the minting curve decided on by a recent community governance vote. These rewards are distributed proportionally to participation and contribution. The minting rate adjusts based on market conditions: The more STRK tokens staked, the higher the inflation, and the lower the staking rewards. If less STRK is locked, inflation will be lower, and rewards will be higher. This mechanism is designed to strike a balance between incentivizing participation and ensuring sustainable inflation while preserving sufficient STRK for other network activities. The community has also voted to cap inflation at 1.6%.
Validators choose whether they’re open to delegation and set their own commission policy, meaning they decide how much of the rewards they share with their delegators. Importantly, a validator can lower their commission rate but not increase it, a measure taken to prevent a case where validators attract delegators with low commission rates only to suddenly increase prices.
Both validators and delegators can unstake their tokens at any point, but they must wait a 21-day lockup period to receive them. During this time, they will not earn staking rewards. This measure is meant to ensure the network’s security and stability.
However, delegators have the flexibility to switch their delegated validators without triggering a lockup, allowing them to freely manage their staking strategy without compromising liquidity.
Taking things slowly
This L2 staking mechanism is an important step toward balancing scalability and decentralization. It’s part of Starknet’s gradual transition into a PoS protocol, with validators taking on additional operational responsibilities in upcoming phases, ultimately putting the network in the hands of the community.
Note that at this time, neither StarkWare nor the Starknet Foundation will participate in the staking activity, and therefore, they will not be eligible for any staking rewards. Additionally, all locked tokens cannot participate in staking at this time.
This first step will foster a community of stakers and allow testing out the contracts and parameters to ensure the way toward Starknet’s increased security is as smooth and efficient as possible.
Summing-up
Staking will play an important role in the network’s success, and hopefully bring about an emergence of new integrations and use cases. We’re excited to see how the ecosystem will flourish.
Here’s a quick overview of the current anticipated staking economic parameters:
- Minimum STRK for Validator Staking: 20,000 STRK.
- No minimum STRK for delegating a stake.
- Withdrawal Security Lockup: 21 days.
- Minting Curve Yearly Inflation Cap: 1.6%
- Commission Policy Parameter: Set by the validator (0 – 1), and can only be lowered once set at the first stage.
These are the guides for becoming a validator and for becoming a delegator.
Welcome to the next era of Starknet.
