Original text: What is staking on Starknet?
Translation and proofreading: Starknet Chinese Community
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Quick Facts
The STRK staking plan mainnet on the mainnet on November 26, and the annual inflation rate of the coin curve will be capped at 1.6%.
Pledge 20,000 STRK to run a node
Unlock the staking for 21 days
xSTRK will be exchanged for STRK on Ekubo
As STRK staking is approaching, Karnot and STRKFarm announced that they will launch the Starknet LST application Endur, and published this article to introduce the working principle of Starknet staking and the role of liquidity staking. This article was written by Akira and the Chinese version was published by the Starknet Chinese community. To view the latest information on Starknet staking, you can browse the official documentation .
Preface
Protecting the core value of blockchain is one of the key principles driving the development of the Starknet ecosystem. This is reflected in the recent Starknet plan to integrate the staking function into the list of user participation to maximize the potential of the network. This development will become the first staking mechanism for the second-layer solution and is expected to be launched on November 26, 2024 .
The path to staking on Starknet has been planned. At this stage, locked tokens, StarkWare and the Starknet Foundation will not be able to participate in staking until a later time period. Eligible participants will need to meet specific criteria to receive rewards.
Before we dive into the details, let’s briefly introduce the basic concept of Starknet staking.
How Starknet staking works
Staking on Starknet means locking STRK tokens into the staking protocol to help improve the network's performance and ensure its security. According to the staking protocol, anyone holding STRK can stake their tokens directly or choose to delegate their tokens to validators to receive rewards based on their participation.
In the first phase, validators must stake at least 20,000 STRK tokens and run a full node to prepare for future phases, when they will be required to assume more network maintenance and security responsibilities.
Staking Rewards : Staking rewards are allocated based on the amount of stake and the commission policy set by the validator.
Minting Curve : Starknet uses a minting curve to adjust rewards depending on the total amount of STRK locked in the staking protocol. The curve aims to find a balance between inflation and participation. Currently, the annual inflation rate is capped at 1.6% , which is considered a low inflation target and suitable for long-term development.
- Withdrawal security lock : When releasing the stake, you need to wait 21 days to get STRK.
xSTRK provided by endur.fi is optimized to minimize staking time and provide a smooth user experience. In most cases, you can immediately redeem xSTRK for STRK in Ekubo (coming soon). If you want to avoid slippage, you can request to cancel the stake and receive STRK within 1-2 days.
- Commission Policy (CP) parameter : Set on a scale from 0 to 1, this parameter determines how much the validator will charge in fees as part of the reward.
Liquidity Staking
Although Starknet staking is attractive to the community, there is still a small problem to be aware of: even with the expectation of rewards, STRK holders will face a loss of liquidity while earning returns.
This is exactly what liquidity staking is all about.
The tool that solves this problem is Endur , which provides a liquid staking token (xSTRK) that symbolizes a long-term commitment to Starknet.
The traditional staking process has the following limitations:
Reduced liquidity : Traditional staking locks up user funds, limiting their liquidity and flexibility.
No access to DeFi applications : Without a liquidity staking option, users cannot use STRK tokens to participate in DeFi applications during the staking period.
21-day unstaking period : When unstaking STRK, the tokens will be locked for 21 days. During this period:
No income : During the unstaking period, you cannot get any income from the tokens.
No access to tokens : Funds are not available, which reduces your liquidity and limits your options in the DeFi ecosystem.
Through Endur’s xSTRK, users can enjoy both rewards and liquidity. xSTRK is both tradable and a perfect representation of staked STRK tokens, a win-win situation.
With Endur, staking becomes more flexible and efficient, while unlocking new use cases for xSTRK, allowing you to experience DeFi based on STRK in a more natural way. Endur's smart contracts will be audited and ready for the staking function to go live.
Disclaimer : Despite the many advantages of liquidity staking, the process still has the inherent risks common to DeFi, including smart contract vulnerabilities and other potential issues.
Conclusion
The introduction of the staking function is an important step for the Starknet ecosystem to move towards decentralization, and this is just the beginning. In the future, Starknet, as a second-layer solution, will gradually give stakers more responsibilities to improve network efficiency.
For more information about Starknet staking, please refer to:
Staking technical documentation : technical architecture and node operation
