Astar Network, a Japanese dApp and layer-two solution, has proposed burning 350 million ASTR tokens, equivalent to $38 million, in order to improve its tokenomics. The burning of a significant portion of the token supply will have short-term benefits such as reducing inflationary pressures and potentially increasing the token’s market value. This move is expected to boost investor confidence and make staking rewards more attractive. In the long term, these measures aim to create a more sustainable token economy by addressing early-stage inflation issues and aligning the total token supply with realistic market conditions.
To gather feedback and opinions from the community, Astar Network will hold a three-week open panel discussion followed by a week-long community vote to determine the fate of the 350 million ASTR tokens. These tokens, which account for 5% of ASTR’s initial supply, were originally reserved by the foundation. If the proposal is approved, the tokens will be burned, and staking rewards will be reallocated.
The reserve of 350 million ASTR tokens was initially set aside when Astar Network launched on Polkadot’s parachain side chains. However, due to the upcoming Polkadot network upgrade called “Agile Coretime,” the parachain system funded by crowd loan auctions will be removed from the ecosystem.
The proposal has received positive feedback from the community, with users highlighting the benefits of burning the tokens as a deflationary mechanism. They believe that since the tokens were intended for a purpose that is now almost extinct, burning them would boost both the Total Value Locked (TVL) and the stakers, ultimately benefiting the economy.
In March, Astar Network introduced its zkEVM platform, a zero-knowledge layer-2 chain that enables cross-chain transactions between Astar and Polygon blockchains. This integration is made possible through AggLayer, a protocol that supports multichain smart contracts using aggregate zero-knowledge proofs, creating a seamless experience for end-users as if the chains had merged into a single network.
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