In a significant move, the Astar Foundation has announced the destruction of 350 million ASTR tokens, marking a notable shift in its tokenomics strategy. This process causes the destruction of five percent of an ASTR token of supply, which will be out of circulation. This is after a good community turnout in the referendum, indicating a healthy approval of this worthwhile token burning.
These tokens, issued initially as a parachain auction reserve, are no longer required due to recent enhancements to Polkadot’s cross-chain network, which have rendered its initial parachain structure obsolete. The Astar community also considered and approved the plan, allowing the foundation to proceed with the token burn.
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Massive Token Burn and Updated Staking Mechanism
As for the referendum results, Maarten Henskens, the Head of Astar Foundation, looked rather optimistic. He underscored the community’s activities and backing and stated that this joint decision marks a solid devotion to a decentralized approach to future innovation.
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Before the referendum, the reserve was utilized during the first phase of Astar dApp Staking, generating 70 million ASTR rewards. These funds will now be migrated to the on-chain Community Treasury for future community-centric proposals concerning the users and builders.
This process of burning the token is just a shorter one among the strategies of the Astar Foundation to boost the SHARDS tokenomics and add more value to ASTR. Astar’s dApp staking v3 feature offers builders and diverse communities an APY guarantee, which can be advantageous for projects. It is beneficial for a builder to stake in a project and for the stakeholders involved as it boosts the ecosystem’s health.
Astar’s dApp staking mechanism strengthens dApps because staking rewards are dispensed straight to dApp developers and stakers. The dynamic introduction of efficient staking models and big-tier systems guarantees high and fair remunerations to incentivize the members and make Astar-related activities permanent.
Conclusion
The Astar Foundation’s decision to burn 350 million ASTR tokens marks a pivotal moment in its strategy to revamp tokenomics. This move, supported by a community referendum, aims to strengthen the Astar ecosystem by enhancing the value of ASTR and promoting community-driven initiatives. With its updated staking mechanism, Astar continues to support decentralized applications, driving growth and engagement within its network.
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Maxwell Mutuma
Maxwell is a crypto-economic analyst and Blockchain enthusiast, passionate about helping people understand the potential of decentralized technology. He writes extensively on topics such as blockchain, cryptocurrency, tokens, and more for top publications such as Coingape, Coin Edition, and The Coin Republic. His goal is to spread knowledge about this revolutionary technology and its implications for economic freedom and social good.