Astar Network has announced significant changes to its tokenomics aimed at reducing inflation pressures within its ecosystem. A key step is the reduction of staking rewards.
Reduction of Staking Rewards
Astar Network has cut base staking rewards from 25% to 10%. The company asserts that this change will create a more stable annual percentage rate for users, aligning with what they consider a more ideal ratio. According to the company, this adjustment helps 'keep rewards meaningful' without causing excessive inflationary pressure.
New Token Emission Model
The ASTR token operates on a dynamic inflation model without a fixed maximum supply cap. The reduction in staking rewards is part of a broader inflation control strategy that includes a new minimum emission threshold of 2.5%. This ensures emissions do not fall below what Astar considers sustainable. Continued transaction fee burning will also contribute to reward predictability.
Market Context of Changes
These changes come amid broader fluctuations in staking protocols. For instance, the Bitcoin staking protocol Babylon saw $1.26 billion unstaked, causing a 32% drop in its TVL. Astar's tokenomics changes have already reduced the annual inflation rate from 4.86% to 4.32%. The total ASTR tokens emitted per block decreased from 153.95 to 136.67, cutting estimated annual emissions by 11%.
The reduction of staking rewards and changes in tokenomics provides Astar Network with tools for better inflation control and stability within its ecosystem, which may impact the project's future development.
