Astar Network Considers $38M Token Burn to Tackle Inflation and Boost Investor Confidence
Summary:
The creators of Japanese blockchain Astar Network are mulling over a proposal to burn 350 million ASTR tokens, valued at $38 million. The move is aimed at reducing inflationary pressures and potentially increasing the token's market value. A decision will be made following a three-week public forum and subsequent community vote. If approved, these tokens, accounting for 5% of ASTR's initial supply, will be incinerated from foundation's reserves, and staking rewards would be rearranged, aligning the total token supply with real market conditions. The Astar Network had recently launched its zkEVM platform to facilitate cross-chain transactions between their network and Polygon's.
The Japanese Astar Network's creators, known for their decentralized app (dApp) and layer-two solution, are considering incinerating 350 million ASTR tokens. These tokens are valued at $38 million as per the current valuation. Maarten Henskens, chief of the Astar Foundation has stated that burning this significant fraction of ASTR supply might alleviate inflation concerns and possibly enhance the token's market worth. It could amplify investors' trust and make staking profits more appealing. These steps, in the long run, will help create a more viable token economy by rectifying early inflation glitches and aligning the total token supply with practical market conditions.
Next on the agenda is a three-week public forum, allowing the community members to voice their opinions on the foundation's proposal. This will be followed by one week of communal voting to decide the destiny of the 350 million ASTR tokens, originally constituting 5% of ASTR's preliminary supply, from the foundation's reserves. This reserve of 350 million ASTR tokens was initially segmented during Astar's deployment on the Polkadot's parachain side chains.
However, the impending network enhancement of Polkadot, known as "Agile Coretime," will lead to the removal of the parachain system financed by crowd loan auctions from the ecosystem. Should the proposal be accepted, the tokens will be burnt, and staking rewards will be redistributed.
One community member noted that this proposal is commendable as burning would function as a deflationary mechanism for tokens that were designated for a purpose that is gradually becoming obsolete. The user added that burning would be beneficial as it would augment both the Total Value Locked (TVL) and the stakes, given a significant amount of tokens will be withdrawn from circulation, beneficial for any economy.
In recent news this March, Cointelegraph announced that Astar launched its zkEVM platform which is a zero-knowledge layer-2 chain built to facilitate cross-chain transactions between the Astar and Polygon networks. It will operate through a protocol named AggLayer supporting multi-chain smart contracts via aggregate zero-knowledge proofs. This will essentially allow the chains to operate for the end-users as though they have conjoined into one single network.
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Published At
6/4/2024 7:46:05 PM
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