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Starknet Pioneers Decentralized Staking on Ethereum's Layer-2

Starknet Pioneers Decentralized Staking on Ethereum's Layer-2

Nov, 28 2024 12:46
Starknet Pioneers Decentralized Staking on Ethereum's Layer-2

Starknet has emerged as the first significant layer-2 blockchain atop Ethereum to introduce a staking feature, allowing users to earn money by validating transactions. This strategic move aims to decentralize the network further and has been meticulously planned over recent months. In July, StarkWare, the leading development firm behind Starknet, formally presented this proposal to the community. Now, any user possessing a minimum of 20,000 STRK tokens, valued at approximately $12,000, can pledge these as collateral to earn rewards for transaction validation.

Alternatively, users with fewer tokens can delegate to validators who can stake on their behalf. It is important to note that validators who act maliciously or fail in their duties risk forfeiting their staked tokens. A mandatory 21-day period is required for validators or delegators to withdraw staked tokens and any associated rewards.

This move by Starknet follows Ethereum’s extensive transition to a proof-of-stake consensus mechanism, completed in 2022. "While it took Ethereum three years to perfect their system, Starknet is proudly positioned as the first major layer-2 to advance toward decentralization," stated Eli Ben-Sasson, CEO and co-founder of StarkWare, in a press release given to CoinDesk.

Metis, a smaller layer-2 network, introduced a staking feature within its ecosystem in April 2024.

However, Metis operates as a "validium," differing from Starknet's rollup mechanism, with its staking contract housed on the Ethereum main chain and accessible via a liquid staking protocol.

The integration of staking into Starknet is a component of a multi-phase strategy. Initially, StarkWare will focus on understanding staking behaviors across the network.

This analysis will guide decisions on the assignment of additional duties to validators, such as block creation and confirmation, known as "attesting." Eli Ben-Sasson emphasizes the visionary goal of empowering community members to sequence and validate Starknet blocks, an endeavor central to achieving genuine decentralization. In anticipation of this staking feature, Bitwise Asset Management announced its plan to manage a public validator, allowing STRK holders to delegate tokens, alongside specialized validators for large institutional clients.

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