Starknet has become the first major layer-2 blockchain running on top of Ethereum to let users earn money by staking their tokens and validating transactions.
The feature is intended to help decentralize the auxiliary network and has been in the works for a while. Starknet’s main developer firm, StarkWare, formally proposed the change to the community in July.
Now, anyone who has at least 20,000 STRK tokens (roughly $12,000 at recent prices) can pledge the asset as collateral and earn rewards for validating transactions. Users with less than 20,000 STRK can delegate their tokens to validators to stake on their behalf. (Validators that behave maliciously or neglect their duties stand to forfeit staked tokens.)
Validators and delegators that want to withdraw staked tokens must wait 21 days to receive them as well as any rewards earned from staking.
Starknet is following in the footsteps of the main Ethereum chain, which completed a long transition to the proof-of-stake consensus mechanism in 2022.
“It took Ethereum three years to get this right. It’s also going to take us time, but Starknet will be the first major L2 to take these steps toward decentralization,” said Eli Ben-Sasson, the CEO and co-founder of StarkWare, in a press release shared with CoinDesk.
In April 2024, Metis, a much smaller layer-2 network, added staking to its ecosystem. However, the contract where Metis tokens are locked sits on the main Ethereum chain, though users can stake them on the L2 through a liquid staking protocol — which bridges back to the mainnet. Metis is a “validium,” a different type of layer-2 blockchain than rollups like Starknet.
Implementing staking on Starknet is part of a multiphase plan. During this first phase, the StarkWare team will study staking habits on the network, and from there will assess whether and how its validators can be given the additional responsibilities of creating and “attesting,” or confirming, blocks in the protocol.
“We are paving the way for enabling members of the Starknet community to sequence and validate Starknet blocks, which is where the true magic of decentralization takes effect,” Ben-Sasson said.
Anticipating the launch of staking on Starknet, Bitwise Asset Management said Monday it would run a public validator to which any STRK holders can delegate tokens and separate validators for large institutional clients.
Read more: Ethereum Layer-2 Project Starknet to Roll Out Staking Feature Later This Month
UPDATE (Nov. 26, 2024, 19:28 UTC): Adds sentence about Metis.