Japanese blockchain Astar plans to burn tokens worth $38 million

by Eve Adams

2 years ago

The developers of the Japanese second-layer blockchain platform Astar Network propose to burn 350 million ASTR tokens, worth $38 million at the time of publication, to improve the tokenomics of their blockchain for decentralized applications (dApp).

Burning a significant portion of the ASTR supply will reduce inflationary pressure in the short term and potentially increase the market value of the token. This could immediately boost investor confidence and the attractiveness of staking rewards. In the long term, such measures contribute to a more sustainable token economy by addressing inflation issues early and aligning the total token supply with market conditions, noted Maarten Henskens, head of the Astar Foundation.

The next steps include a three-week discussion period during which community members can express their opinions on the foundation's proposal. This will be followed by a one-week community vote to decide the fate of the 350 million ASTR tokens from the foundation's reserves, which accounts for 5% of the initial ASTR supply. If the proposal is approved, the tokens will be burned, and staking rewards will be redistributed.

Initially, the reserve of 350 million ASTR was intended for the launch of the Astar parachain on Polkadot. However, the upcoming Polkadot network upgrade called "Agile Coretime" will lead to the removal of the parachain ecosystem funded by crowdloan auctions.

This is a good proposal. The burn will act as a deflationary mechanism for the tokens intended for a purpose that is now almost extinct (parachain slot rental). Burning would be ideal as it would help increase both TVL and the number of stakers. In the end, this is a large amount of tokens going out of circulation, and that is always good for any economy, commented one user.

In March, it was reported that Astar launched its zkEVM platform, a second-layer blockchain based on zero-knowledge proofs, designed to ensure cross-chain transactions between Astar (ASTR) and Polygon (MATIC) blockchains. This integration is implemented through AggLayer, a protocol supporting multi-network smart contracts via aggregate zero-knowledge proofs, allowing blockchains to "perceive as one" for end users.

Other news

Senate Banking Committee to Discuss Digital Asset Market Clarity Act

The Senate Banking Committee will meet to discuss the Digital Asset Market Clarity Act, which aims to clarify the regulatory status of crypto assets.

Jesper Sørensenan hour ago

Senate to Vote on Kevin Warsh's Federal Reserve Nomination

The U.S. Senate is scheduled to vote on May 11, 2023, regarding Kevin Warsh's nomination to become a Federal Reserve governor, which is crucial for the future of monetary policy.

Lucas Weissmannan hour ago

XDC Network's Features and Adoption Highlighted

X Finance Bull highlights the unique features and growing adoption of the XDC network, including high transaction speeds, low fees, and compliance with international standards.