The developers of Astar Network, a Japanese dApp and layer-two solution, have put forward a proposal to burn 350 million ASTR tokens, which are valued at $38 million. This move aims to enhance the tokenomics of the project.
By burning a significant portion of the ASTR supply, the developers believe that it will reduce inflationary pressures and potentially increase the token’s market value. Maarten Henskens, the head of Astar Foundation, stated that this immediate impact can 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 determine the fate of the 350 million ASTR tokens, a three-week open panel discussion will be held, allowing community members to provide their input on the proposal. Following this, a week-long community vote will take place. If the proposal is approved, the tokens will be burned, and staking rewards will be reallocated.
The 350 million ASTR reserve was originally set aside when Astar launched on Polkadot’s parachain side chains. However, with the upcoming Polkadot network upgrade called “Agile Coretime,” the parachain system, which was funded through crowd loan auctions, will be removed from the ecosystem.
Users have shown support for the proposal, stating that burning the tokens will act as a deflationary mechanism and that it is a good amount of tokens that will be taken out of circulation, benefitting the economy.
In March, Astar launched its zkEVM platform, which enables cross-chain transactions between the Astar and Polygon blockchains. This integration is made possible through AggLayer, a protocol that supports multichain smart contracts using aggregate zero-knowledge proofs, creating the illusion of a single network for end-users.
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