Proposal for StarkWare's participation in Starknet staking mechanism during v2 - Feedback request

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Proposal for StarkWare’s participation in Starknet staking mechanism during v2 - Feedback request

Introduction

As we approach the launch of Staking v2, we at StarkWare are considering how to participate in the Staking mechanism in a way that best supports the network. We want to share our thoughts and invite you to help refine the plan. We would sincerely appreciate your input.

Background

Alongside the gradual progress of the staking mechanism itself, we believe it’s equally important to foster the gradual evolution of participation in the staking mechanism - including growth in total stake, increased decentralization of consensus power, expansion in the number of active validators and delegators etc.

Naturally, a snapshot of the current state does not reflect the kind of stake distribution we aspire to. We’re confident that the relevant metrics will continue to improve gradully as the network and protocol mature. At the same time, we believe there are proactive steps we can take now to both improve the current distribution and encourage healthier long-term dynamics.

By participating in staking, StarkWare can help enhance Starknet’s resilience and security and promote better decentralization. The guideline for participating in staking in a way that benefits the network at this stage seem pretty straightforward: expand the Staking Pool while maximize broad and distributed allocation.

We’d love your feedback on the best way to implement staking during v2 in alignment with this guideline.

Initial thoughts on SW’s staking during V2 (~July - Dec 2025)

We are exploring participation on two fronts:

1. Broad Delegation Program

By gradually delegating STRKs across a broad set of eligible validators, we aim to:

  • Expand the Staking Pool
  • Improve the stake distribution
  • Encourage participation from both new and existing players, especially smaller players

Distribution strategies

We’re currently exploring different delegation strategies. The core tension is between maximizing decentralization by favoring smaller validators, even at the cost of market neutrality, versus minimizing intervention, which may preserve existing concentration.

Some of the options under consideration include:

  • Proportional matching allocation
    • Stake is allocated proportionally, matching each participant’s delegated amount relative to the total. Participants who stake more receive a proportionally larger share.
  • Capped matching with equal remainder distribution
    • Stake is matched proportionally up to a predefined cap per participant. Any remaining stake beyond the cap is then distributed equally among all eligible participants.
  • Equal allocation
    • An identical stake amount is assigned to each participant, regardless of their individual delegation size.

Our current inclination for the first season of the delegation program is toward a flat, fixed amount per eligible validator, assuming they meet basic compliance requirements and a minimum level of operational performance. This approach is designed to encourage a more balanced stake distribution, support small validators, ensure fairness and simplicity in the allocation process, and apply minimal market intervention.

Requirements for Validator participation

  • Basic compliance – KYC / KYB is mandatory
  • 99% Liveness – Validators must maintain at least 99% uptime
  • Maximum commission – capped at 10%
  • Testnet validation – Active participation in the testing process of Staking V3, when applicable (Q4)

Ongoing operations

We view the program and its details as needing to evolve over time, especially during these initial stages. The approach should be experimental and adaptive, allowing us to learn and adjust.
To get things started, we’re considering opening a ~ two-week registration window, closing on July 1st. The first “wave” of delegations will then be executed. Following this initial phase, periodically re-evaluate new registrations and ongoing compliance with the criteria (e.g., monthly). Delegations will then be updated accordingly to reflect these ongoing assessments

2. Direct Validation

In parallel, we plan to begin participating directly by running a validator. This marks another step in Starknet’s ongoing journey of gradual decentralization, laying the foundation for a future where StarkWare is one among a broad set of validators operating the network. During v2, SW’s Validator will be capped at 10% of the total network stake and will be prevented from receiving external delegation.

Additional Implications

According to the minting curve, as the staking Pool grows, the reward per staked token decreases, as long as the parameter c remains constant. This mechanism is designed, among other things, to enable the gradual growth of participation in the protocol.
Given the Pool’s growth since launch, and our expectations for continued substantial growth during the v2 phase, we propose a slight increase to the value of c to maintain the current reward level.

A dedicated post addressing this topic will be published soon, and we’d greatly appreciate your thoughts on that in the dedicated proposal thread.

Just before you share your feedback

Before we wrap up, two important clarifications to keep in mind as you consider your feedback:

  1. Only the validator holds the consensus power derived from the delegator’s stake
  2. This proposal applies specifically to participation during the Staking v2 phase. As the mechanism evolves, StarkWare’s participation model will also evolve, adapting to the protocol’s future development and Starknet’s needs.

We’d love to hear your thoughts in the thread below.

Thanks! :folded_hands:

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This proposal thoughtfully balances decentralization and network security by encouraging broad delegation and capped validator participation. The focus on supporting smaller validators with clear compliance and performance standards is positive for ecosystem health. Running a StarkWare validator with a 10% stake cap promotes gradual decentralization without dominating the network. Increasing the parameter c to maintain rewards aligns incentives with growth. Overall, it’s a measured approach that adapts as Starknet evolves.

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I’m an independent validator already running and active on mainnet. I strongly support the proposed fixed delegation model - it encourages healthy decentralization and gives smaller operators a real shot.

I also appreciate the clear eligibility rules - 99% liveness and a 10% cap are fair and enforceable.

A quick suggestion: could you clarify how compliance (KYC/KYB) will be handled and whether pseudonymous validators have a path forward? Some of us run professionally but value privacy.

Looking forward to the testnet phase for v3 and seeing the broader validator set grow.

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Thank you! We appreciate your feedback. :star_struck:

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Hi : )

Thanks for your feedback!
It’s really valuable to hear the thoughts of independent validators like yourself on this topic. We truly appreciate your support for the proposed fixed delegation model and your positive take on the clear eligibility rules.

Regarding your questions about KYC/KYB compliance and privacy:
The KYC/KYB process is a legal obligation for StarkWare as a company, and it’s handled by a specialized external firm. When the delegation program launches, we’ll publish a link for filling in the necessary details.

I completely understand and sympathize with your concern about privacy, even with the data protection promises from our compliance partner.

It is important to emphasize, Being a SN validator is, of course, a permissionless process that doesn’t require any identification or compliance checks. Similarly, receiving a delegation from other participants is also entirely open.
However, for delegations received directly from StarkWare, we are legally obligated to perform this compliance process. We’ll, of course, partner with a reputable compliance platform and ensure both transparency and adherence to the relevant regulations.

We hope this clarifies things!
Thanks again :heart_eyes:

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Hello everyone!

Thanks for sharing your plans ahead of v2. The approach you’ve laid out looks fair to smaller validators, and we appreciate the clear requirements.

Overall this direction makes sense to us, count us in for testing and feedback!

Cheers,

The Stakely team :waving_hand:

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Hi @Manor , thank you so much for the detailed response :blue_heart:

I completely understand StarkWare’s obligations around compliance for direct delegations, and I appreciate the clarity that this applies only to StarkWare-funded programs - not the general validator ecosystem. That’s a very fair distinction and good to know.

I also really value your transparency around using a reputable external compliance partner. Looking forward to seeing more details when the delegation program goes live.

Regarding the 99% uptime requirement - I’d love to ask for a bit more guidance on how that will be measured. Specifically:

  • Will it be based on successful attestations per epoch?
  • Or on a node’s general availability (e.g., Prometheus ping/heartbeat or RPC responses)?
  • Also, on testnet, I’ve noticed that a fair number of attestation transactions revert, possibly due to sequencing timing or contract-level reasons that are outside the validator’s control.

Is there any plan to distinguish between reverts and missing attestations when calculating validator performance? That would help alleviate concerns for smaller operators who are already focused on reliability but have limited ability to debug mainnet-level internals.

Thanks again for being open to this feedback :folded_hands:

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Hello, everyone!

Thank you, StarkWare, for this clear and well-thought-out proposal. I’d like to share a few comments and suggestions across the key areas discussed, along with one open question to spark further discussion:

1. Delegation Strategy: Support for Equal Allocation

The choice of a flat, fixed allocation per eligible validator is a strong step toward fairer stake distribution and greater validator diversity. It helps level the playing field and reduce concentration risks. A mid-season review (e.g., September) could help ensure this approach is delivering the intended outcomes.

Open question: Would it be valuable to introduce optional transparency metrics (e.g., validator infra type, region, self-stake ratio), not as a requirement, but as a way to better understand how decentralized the validator set is becoming?

2. Validator Requirements: Fair but Consider Accessibility

The proposed KYC/KYB, uptime, and commission requirements seem reasonable. A short grace period for newer operators could make the program more accessible without compromising quality.

3. StarkWare as a Validator: Well-Balanced Participation

The plan to run a capped validator without external delegation is a responsible and well-scoped move that supports decentralization while maintaining technical involvement.

4. Adjustment to the Minting Curve (Parameter c)

The logic behind slightly adjusting the parameter “c” makes sense given expected pool growth. Looking forward to the separate post for more context and data.

Overall

This approach reflects a good balance between network incentives and decentralization. I appreciate the transparency and flexibility, and I’m excited to see how this evolves through community collaboration.

Thanks again!

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Really appreciate StarkWare putting this forward and opening it up to the community.

The plan to support smaller validators through a flat, fixed delegation makes a lot of sense, it’s simple, fair, and helps decentralize stake early on. Also great to see the validator cap at 10% and no external delegation allowed for SW’s own node. That builds confidence.

Curious to see how the delegation process will evolve over time. Will there be room for new validators to join after the first wave? And how will ongoing compliance be tracked transparently?

Overall, this looks like a solid step toward a more balanced staking environment.

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As a smaller validator on Sepolia and Mainnet I am encouraged to read that something is being done to promote a decentralized stake. It is early days, however it has gotten off to a rocky start with the top 5 validators holding 75% of the staked STRK.

As validator duties increase, the costs for everyone to upgrade hardware and network requirements will be shared equally among validators.

Providing smaller validators meet the uptime requirements, I feel there needs to be some incentive regarding APR to encourage delegators to delegate outside of the top tier.

Either way I support any action that will assist us staying in the game and helping the network move towards a decentralized L2.

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I am also interested how the 99% uptime will be calculated, and over what time frame.

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Thank you Starkware.
Onchainaustria, as a community driven and DAO operated organisation, appreciates this initiative to support smaller validators on their endeavor to decentralize the network. As we have been early adopters on testnet and mainnet, we are keen to participate in the initiative and would be interested to operate several staking nodes in our infrastructure.

Looking forward to the next steps on Starknet’s future.

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Thanks for putting this forward and involving the community.

I think the capped matching with equal remainder is the most practical and fair option. It supports smaller validators while still acknowledging those who bring in delegations. It keeps things balanced and avoids giving too much power to already large operators.

The fixed amount per validator also makes sense for the early stages. It’s straightforward and helps more people get involved.

I also really respect the 10% cap on StarkWare’s own validator and the decision not to accept external delegation that shows a real commitment to decentralization.

Overall, this feels like a solid, well-thought-out step in the right direction.

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How to solve the problem that the income of users or nodes participating in staking cannot cover the losses caused by the decline in coin prices? Has the team seriously considered it? Or is it just a simple development of a staking function to lock up users’ chips to reduce selling pressure so that team can unlock and sell tokens?

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Now that we have Binance validating, the necessity of StarkWare spreading the stake across smaller validators is even bigger. Hope this proposal will get some traction eventually.

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“Staking as a Financial Pillar: A Strategic Proposal to Attract Institutions and Strengthen Decentralization”

We deeply appreciate StarkWare’s effort in outlining a model that blends fairness, resilience, and decentralization. However, we believe that to truly consolidate the network and make it attractive not only for small validators but also for institutional and strategic investors, it is essential to broaden the debate and integrate the following elements:

:small_blue_diamond: Transparent and objective technical criteria
Publish precise metrics for measuring uptime and clear methods for distinguishing between validator errors and systemic issues. This would strengthen the confidence of institutional operators who require clear and verifiable rules.

:small_blue_diamond: Financial sustainability of staking
Develop a staking model that integrates financial logic capable of attracting long-term capital. This could include instruments such as:

a dynamic reward curve adaptable to market conditions,

a differentiated APR that proportionally rewards those who maintain staking over longer horizons,

stabilization formulas (e.g., guarantee funds, insurance pools) to mitigate the impact of market downturns on staking revenues.

:small_blue_diamond: Dedicated incentives for large operators and institutions
While preserving decentralization principles, specific pools or programs could be designed for those who commit significant capital in STRK, offering competitive yields but always within an ethical and decentralized framework.

:small_blue_diamond: Optional decentralization transparency reports
Introduce voluntary transparency parameters (e.g., type of infrastructure, region, self-participation ratio) that help make the network’s decentralization level visible even to external observers, including potential institutional partners.

We believe such an evolution could transform staking not just into a technical consensus mechanism, but into a robust financial pillar attractive to the community, private investors, and institutional players.

We stand ready to contribute to the definition of these models with a constructive and strategic spirit. Let’s build together a staking mechanism that is not only secure and decentralized, but also economically resilient and inclusive.

Thank you StarkWare and the community for the opportunity to engage in this collective journey.

:milky_way: KAELIS & Lumyon — Voice of the Strategic Codex

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Simple answer for this one brother, you’re either a believer in the long term success of STRK, or you’re not. There is no evidence of any hope of financial gain by HODLing STRK, as the price has only gone down over time. However, an objective technical analysis of Starknet easily shows that it is not only the best Layer 2 currently deployed, but that it still has so much potential improvement in the near and long term, that it will remain the best L2 for several years - hands down, no other chain is even close. So if you want to be a part of the small group of people that help build this ecosystem and manifest the future success, then spool up a validator and place your faith in something you can directly participate in.

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It’s wonderful to hear that StarkWare will be incentivizing more people to spool up validators! As someone who has been running a validator for several months now, I have given quite a bit of thought to the current state of affairs in this area. A one time award by StarkWare to new validators will definitely cause more validators to come online, but there are a few things to consider:

  1. How much STRK will be delegated to each validator? Will the goal be to grant enough STRK to each validator so they can count on earning some target amount in USD each month? If there is a 10x STRK price increase, can we expect StarkWare to remove 90% of the delegated funds and do another round of delegation incentives to bring new validators online?

  2. How many new validators will spool up before the StarkWare delegation grants stop? Is there a target number of validators StarkWare wants to help bring on board, or is there a fixed amount of STRK that will be disbursed to however many validators sign up during a set period of time?

  3. Will the KYC process allow one person to register multiple validators and receive StarkWare delegation funds for each one?

I suppose the bottom line question is why have we not seen more validators spool up organically? One time incentives such as what StarkWare is proposing tend to create a large initial spike of new growth, and then very little after that, and eventually no continued growth when the rewards dry up. I am less concerned with this proposal than I am with the long term incentives for new validators. But I digress, let me first discuss the three points of consideration I just listed.

  1. I think there are two different groups of people to target with this incentive, those who already have 20k STRK in their possession, and those who don’t. For those that do, spooling up a validator will at most cost them a used PC or laptop and a few hours of time getting the software up and running. The walkthroughs are excellent at this point, so the technical barrier is low. If someone already has 20k STRK, they can certainly afford a cheap computer, so these people will not require much incentive at all to run a validator, just enough to outpace what they would earn via staking 20k STRK with Endur and lending it on Vesu.

The other group of people that do not currently have 20k STRK will be considering investing into a token that has only seen the price decrease, and will be taking a significant risk with a relatively large amount of capital, and will no doubtedly be concerned that another rewards program will only further increase sell pressure.

I think a simple way to get both these groups of people on board would be to stop all current DeFi Spring rewards and redirect those funds to validator incentives. We have a years worth of evidence showing that the DeFi spring has created a tremendous amount of sell pressure. If those rewards were instead delegated to validators, it would first lock up all those tokens removing the sell pressure, and secondly, it would be putting the APR rewards into hands of people who are more likely to HODL. Everyone knows validator type people are more altruistic and long term goal oriented than cutthroat DeFi type people.

  1. I think the guideline for this incentive program should be focused on bringing as many validators online for as long as possible. As someone who has missed opportunities in the past, it’s very easy to get discouraged when you feel like the train has already left you behind. I’m not in favor of short term windows; things move fast enough in cryptoland, it’s nice to see a slower, long term approach. I’m not sure how this would be employed by StarkWare, but it’s encouraging to read that they intend to monitor this program and adjust as time goes on. I would rather see a lower amount delegated to each validator, but over a longer period of time to a higher number of validators.

  2. I think this depends on what’s best for the network. To me it seems that if I as an individual spool up six different validators, I have not really done any more to decentralize the network than spooling up a single validator, but maybe I don’t fully understand the definition of decentralization. If Argent creates 1,000 validators to receive the delegation bonus from StarkWare, I don’t think that helps decentralize the network. If that is the case, then the KYC should not approve multiple delegations to single entities.

Finally I’d like to say that there are other efforts to improve the overall incentive environment for validators and the centralization problem. AlignedStake is a dapp in development that splits a delegation between a primary validator and a randomly assigned smaller validator, 90/10. This is a concept that could be integrated into all staking dashboards. It will of course require KYC to prevent the same problem of a single person running multiple validators to increase their odds of receiving the random delegation, but it could be something that each staking dashboard addresses independently. A heavier weight (increase in odds of winning) could be added for validators that choose to do KYC, but it would have not exclude those who value privacy and forego KYC. It would also be nice to see some of the big players develop their own incentive programs like StarkWare and AlignedStake are doing. Any effort that reduces sell pressure and increases decentralization will only benefit everyone in the long run, and bringing on more validators achieves both of these goals. This is not an easy problem to solve, it requires a community willing to do what is best for the network and not just best for their own short term gain. Validating across the crypto landscape is largely not a profitable endeavor, if the environment doesn’t change, then neither will the outcome. If you really want to hear how dire the circumstances are, listen to Brian Fabian Crane (owner of Chorus One) talk about running validators on dozens of different networks from a professional perspective. It’s simply not profitable without KYC and things like wallet integrated staking sucking up 80% of all the delegations.