The StarkNet network community will vote on the emission curve of tokens native (STRK) that will be distributed as rewards for those users who participate in the staking.
Voting will take place between September 10 and September 13, 2024 and the company opened the StarkNet Governance Center, where users will be able to vote.
This is the first community participation in self-governance functions for the holders of the token native to the network. In this case, the process will have the purpose of STRK holders determine the remuneration obtained by users who block their STRK and serve as validators on the network.
This procedure, known as stakingis a mechanism where participants block their tokens to contribute to the security and operation of the network, in exchange for rewards. These rewards are what will be determined by the first governance vote on the network.
StarkNet is an Ethereum Layer 2 (L2) scalability solution that uses Zero Knowledge (ZK) proof technology to improve both network speed and efficiency. Designed by StarkWare, this L2 seeks to solve scalability issues such as high gas fees and slow transaction processing times.
On its path to decentralization, the network announced that the transition to a Proof of Stake (PoS) protocol, Proof of Stake) “it will happen anyway” and that from the fourth quarter of 2024 any holder of the token Native will be able to participate in the staking.
What coinage mechanism is used? token Will STRK be voted on by the StarkNet community?
According to the company’s statement, the vote will be based on a proposal from StarkWake advisor Noam Nisan.
The central idea for the emission of tokens intended for staking will be subject to “the more tokens get into stakethe lower the reward.” This principle is contrary to that usually used in PoS protocols, where users have an incentive to block a larger amount of cryptocurrencies so that the reward is greater.
This idea can be appreciated with the examples provided in the following image, taken from the StarkNet announcement.
The purpose of this mechanism is to guarantee a sufficient number of validators to secure the network and at the same time control the inflation of the token. If there were many stakers receiving a large amount of STRK, the price of this cryptocurrency could be harmed.
In this way, this system aims to prevent the staking be excessively lucrative when too many people participate. Instead, the goal is to maintain a balance where only the optimal number of users are incentivized.
StarkNet uses the Snapshot X protocol
To verify the validity of the vote, and that it comes from a genuine user of the StarkNet community, the company will use the Snapshot X protocol. This tool, which grants this type of voting without charging gas fees, detects users’ holdings to ensure that they own STRK at a specific time. According to the company, “only people who own STRK and have delegated their voting power before 12 pm on September 10 can vote.”
In this context, Snapshot X allows votes to be stored on a blockchain promoting a fair election and ensuring votes are linked to real holdings. In this way, StarkNet tries to prevent users outside the community from speculating on a possible price increase, buying STRK at the last minute and selling it quickly.