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Starknet will implement a dynamic minting mechanism for STRK tokens, balancing staking incentives and token supply with community support.
The Starknet community overwhelmingly approved a new staking mechanism proposal that includes a dynamic minting curve for STRK tokens. With 98.94% of the votes in favor, it marks a significant milestone in the network’s long-term efforts to balance token supply while incentivizing staking.
StarkNet New Minting Mechanism
The minting curve, which is at the core of the approved proposal, is based on Professor Noam Nisan’s “Proposal 2” with some minor changes.
This feature allows the STRK token supply to be adjusted according to staking participation rates to control inflation. Tokens will be minted proportionally to staking levels on the network.
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The minting rate (M) will be determined using the staking rate (S) and a constant (C), initially set to 1.6.
Adjusting the Minting Parameters
The Starknet Foundation or an appointed monetary policy committee will have the authority to change the value of the minting constant (C) between 1.0 and 4.0. This constant can be increased to lower C when staking levels are too high or to increase incentives when participation decreases. These adjustments will be made in accordance with the principle of transparency; each change will be announced and justified in the community forum two weeks in advance.
StarkNet Community Feedback
While community feedback was largely positive, a small segment, representing 0.61% of the votes, opposed the proposal. While an acceptance rate of almost 99% does not fully reflect the voting power of all token holders, 79.65% of the total voting power, or 1.4 billion STRK tokens, contributed to the decision.
This proposal comes just a month after Starknet-backed ZKX Protocol shut down its services due to “low” network participation.
With the new minting curve integration, activity and interaction levels are expected to increase as staking incentives can be adjusted based on user participation in the network.
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