Starknet introduces staking mechanism
STRK holders will vote on the following:
1. Minting mechanism, see the Minting Mechanism section for details.
2. Protocol to modify the parameters of the minting mechanism, see the Minting Curve Adjustment section for details.
Minting Mechanism:
starknet proposes to implement a new STRK token minting curve mechanism. This minting curve is based on Professor Noam Nisan's Proposal 2 with slight parameter adjustments. The minting curve is defined by the following formula:
M = C/10 * S
Where:
* S is the staking rate, expressed as a percentage of the total token supply.
* M is the annual minting rate, also expressed as a percentage of the total token supply.
* C is the theoretical maximum inflation rate, expressed as an annual percentage.
The initial C value is recommended to be set to 1.6.
The implementation of the minting curve mechanism allows the token supply to be dynamically adjusted based on the staking participation rate. This approach aims to balance staking incentives while effectively managing inflation.
Minting curve adjustment:
The Starknet Foundation or the Currency Committee created by it will have the right to adjust the minting curve constant C in the range of 1.0 to 4.0, subject to the following conditions:
* Reduce C: This adjustment is made when the number of staked STRK is too large.
* Increase C: This adjustment is made when the number of staked STRK is insufficient.
To ensure transparency and community trust, any change to the minting curve constant C must be accompanied by the following:
* An announcement announcing the reason for the change.
* The announcement must be published on the community forum at least two weeks before the change.
The passage of the proposal will lay the foundation for Starknet to connect to IBC.
Build an inflation model and lock more liquidity
