Astar Network has burned 350 million ASTR tokens following a community vote, reducing the total supply by 5% to enhance token value and increase staking rewards.
ASTR Token Burn Details
The Astar Network, a prominent multi-chain smart contract network within the Polkadot ecosystem, executed a significant token burn on July 8, 2024. This event saw the destruction of 350 million Astar (ASTR) tokens following a community vote, resulting in a 5% reduction in the total supply of ASTR tokens.
Astar Network is dedicated to developing smart contracts for multichain environments. It serves as a key hub for decentralized applications (dApps) within the Polkadot ecosystem. Its Build2Earn model enables developers to earn rewards through a staking mechanism for contributing to the network.
Community Involvement
The decision to burn the tokens came after extensive discussions and debates within the Astar community. Over a two-week period, members weighed the potential benefits and drawbacks of the proposed burn. The proposal was subsequently put to a vote, which lasted for one week. Over 66 million ASTR tokens were cast in favor of the burn, highlighting strong community support for the initiative.
Impact on Tokenomics
The burn is expected to positively impact Astar Network’s tokenomics by potentially increasing the value of the remaining tokens. This move is seen as a bullish signal for the ecosystem, aiming to create a more sustainable economy. Additionally, the reduction in supply is anticipated to boost staking rewards for the decentralized application (dApp) staking community within the network.
Reasons Behind the Burn
The 350 million ASTR tokens were originally set aside for Polkadot parachain auctions. However, changes in the Polkadot system rendered these tokens unnecessary for that purpose. The community decided that eliminating these tokens would better serve the network by enhancing token value and increasing staking rewards.
The token burn will also benefit the Community Treasury. The 350 million tokens generated 70 million ASTR in rewards, which will now be staked to support the Unstoppable Community Grants initiative. This initiative aims to fund innovative projects within the Astar ecosystem, fostering further growth and development.
Market Reaction
According to CoinMarketCap, the total supply of ASTR tokens stands at 8,159,136,198, with a circulating supply of 6,140,843,400. ASTR experienced a 7.20% drop in the past week, declining from $0.07105 on July 1 to $0.0585 on July 8. However, following the token burn announcement, the token value surged to $0.06531, marking a 1.86% increase daily. The market cap of ASTR is currently over $400 million, with a 24-hour trading volume of over $52 million.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
