Astar Network Burns 350 Million ASTR Tokens to Enhance Token Value and Increase Staking Rewards

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.

Astar Network, a multi-chain smart contract network in the Polkadot ecosystem, burned 350 million ASTR tokens on July 8 following a community vote. The burn, which reduced the total supply of ASTR tokens by 5%, was initiated to enhance token value and increase staking rewards.

A Deeper Look into Astar Network

Astar Network is designed to create smart contracts for multi-chain environments. It serves as a central hub for decentralized applications (dApps) in the Polkadot ecosystem. Developers can build dApps on Astar Network and earn rewards through a staking mechanism for contributing to the network, known as the Build2Earn model.

Community Involvement in the Token Burn

The decision to burn the tokens was made after discussions and debates within the Astar community. Members discussed the potential benefits and drawbacks of the proposed burn over two weeks. The proposal was then put to a vote, which lasted for one week. The burn was supported by a majority of the community, with over 66 million ASTR tokens being cast in favor of the initiative.

Impact on Astar Network's Tokenomics

The burn is expected to have a positive effect on Astar Network's tokenomics, as it could increase the value of the remaining tokens. This move is seen as a bullish signal for the ecosystem, aiming to create a more sustainable economy. Furthermore, the reduction in supply is anticipated to boost staking rewards for the decentralized application (dApp) staking community within the network.

Reasons Behind the Token Burn

The 350 million ASTR tokens were originally intended for use in Polkadot parachain auctions. However, changes in the Polkadot system made these tokens redundant 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.

A Look at ASTR Token Performance

According to CoinMarketCap, the total supply of ASTR tokens is 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.

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