Astar Network, a Japanese dApp and layer-two solution, is proposing to burn 350 million ASTR tokens, which are valued at $38 million, in order to enhance its tokenomics. The burning of a significant portion of the token supply will reduce inflationary pressures and potentially increase the market value of the token. This move is expected to boost investor confidence and make staking rewards more attractive. In the long term, these measures will address early-stage inflation issues and align the total token supply with realistic market conditions, leading to a more sustainable token economy.
To implement this proposal, Astar will hold a three-week open panel discussion, where community members can provide their input. Subsequently, a week-long community vote will determine the fate of the 350 million ASTR tokens, which represent 5% of the initial token supply, held in the foundation’s reserves. If the proposal is approved, the tokens will be burned, and staking rewards will be redistributed.
Originally, the 350 million ASTR reserve was set aside when Astar launched on Polkadot’s parachain side chains. However, the upcoming Polkadot network upgrade, known as “Agile Coretime,” will remove the parachain system, funded through crowd loan auctions, from the ecosystem.
The community has responded positively to the proposal, recognizing that the burning of tokens will act as a deflationary mechanism and support the TVL (Total Value Locked) and stakers. They believe that removing a substantial number of tokens from circulation will benefit the economy.
In March, Astar introduced its zkEVM platform, which enables cross-chain transactions between the Astar and Polygon blockchains. This integration is made possible through AggLayer, a protocol that facilitates multichain smart contracts using aggregate zero-knowledge proofs, effectively creating the illusion of a merged network for end-users.
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