HomeBlockchainJapanese blockchain project Astar suggests burning $38 million worth of tokens

Japanese blockchain project Astar suggests burning $38 million worth of tokens

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Astar Network Proposes Burning 350 Million ASTR Tokens to Improve Tokenomics

The developers of Japanese dApp and layer-two solution Astar Network are making a bold move to improve the tokenomics of their project by proposing to burn 350 million ASTR tokens, valued at $38 million. This decision aims to reduce inflationary pressures and potentially increase the token’s market value in the short term.

Maarten Henskens, head of Astar Foundation, explained that this immediate impact could boost investor confidence and enhance the attractiveness of staking rewards. In the long term, these measures are expected to contribute to a more sustainable token economy by addressing early-stage inflation issues and aligning the total token supply with realistic market conditions.

The next steps in this process include a three-week open panel discussion for community input and a week-long community vote to determine the fate of the 350 million ASTR tokens from the foundation’s reserves. If the proposal passes, the tokens will be burned, and staking rewards will be reallocated.

Originally set aside from Astar’s launch on Polkadot’s parachain side chains, the 350 million ASTR reserve is now being reconsidered due to the upcoming Polkadot network upgrade, which will remove the parachain system funded by crowd loan auctions from the ecosystem.

Community members have expressed support for the proposal, noting that burning the tokens will act as a deflationary mechanism and help boost the project’s Total Value Locked (TVL) and stakers. This move is seen as beneficial for the project’s economy.

In March, Astar launched its zkEVM platform, enabling cross-chain transactions between the Astar and Polygon blockchains. This integration through AggLayer supports multichain smart contracts via aggregate zero-knowledge proofs, making the chains appear as though they have merged into a single network.

Overall, the proposal to burn 350 million ASTR tokens represents a significant step towards improving the tokenomics of Astar Network and ensuring a more sustainable token economy for the project’s future growth.

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