Japanese decentralized application developers and Layer 2 solution Astar Network offer Burn
Japanese decentralized application developers and layer 2 solution Astar Network are proposing to burn 350 million ASTR tokens, worth $38 million at the time of publication, to improve its token economy.
“In the short term, burning a significant portion of ASTR’s supply will reduce inflationary pressures and potentially increase the market value of the coin,” wrote Martin Henskins, president of the ASTR Foundation. “This direct effect can strengthen investor confidence and enhance the attractiveness of signing bonuses. In the long term, these measures contribute to a more sustainable token economy by correcting inflation issues at an early stage and aligning the total token supply with real market conditions.
Next steps include a three-week open roundtable, during which community members can participate in the foundation’s proposal. Next, a week-long community vote will take place to decide the fate of 350 million ASTR tokens, representing 5% of ASTR’s initial supply, from the foundation’s reserves. If the proposal is approved, tokens will be burned and staking rewards reallocated.
The 350 million ASTR reserve was initially set aside for the launch of Astar on Polkadot’s umbrella sidechains. However, the impending upgrade of the Polkadot network, dubbed “Agile Coretime”, will see the parachain system, funded by crowdlending auctions, removed from the ecosystem.
“Good suggestion, burning will act as a deflationary mechanism and will be tokens dedicated to a now almost extinct use (parachain rental),” commented one user. “Burning would be ideal, as it would help boost both TVL and stakeholders, as mentioned, after all, a good amount of tokens will come out of circulation, and that is always good for any economy.”
In March, Cointelegraph reported that Astar launched its zkEVM platform, or a zero-knowledge layer 2 chain designed to enable cross-chain transactions between the Astar and Polygon blockchains. It is integrated via AggLayer, a protocol that supports multi-chain smart contracts via pooled zero-knowledge proofs, making chains appear to act towards end users as if they had merged into a single network.
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