Japanese blockchain platform Astar Network is proposing a significant token burn to enhance its tokenomics.
The plan involves burning 350 million ASTR tokens, valued at $38 million, originally reserved for a Polkadot parachain slot but now unused.
Maarten Henskens, head of Astar Foundation, explained the rationale behind the proposal.
“Burning a substantial portion of the ASTR supply will reduce inflationary pressures and potentially increase the token’s market value in the short term,” Henskens stated.
“Long term, this move aims to create a more sustainable token economy by addressing early inflation issues and aligning the total supply with realistic market conditions.”
The proposal is set to undergo a three-week open panel discussion, allowing community members to voice their opinions.
This will be followed by a week-long vote to decide the fate of the 350 million ASTR tokens, which represent 5% of the initial supply. If approved, the tokens will be burned, and staking rewards will be reallocated.
The reserve of 350 million ASTR tokens was originally allocated for Astar’s integration with Polkadot’s parachain system.
However, with the upcoming Polkadot upgrade, “Agile Coretime,” the parachain system will be phased out, rendering these tokens obsolete.
One community member praised the proposal, noting, “Burning these tokens will act as a deflationary mechanism, which is beneficial for the economy. It will remove a significant amount of tokens from circulation, boosting both total value locked (TVL) and staking rewards.”
In March, Astar launched its zkEVM platform, a zero-knowledge layer-2 chain enabling cross-chain transactions between Astar and Polygon blockchains.
This integration through AggLayer allows multichain smart contracts to operate seamlessly, enhancing the network’s functionality and user experience.
This proposed token burn represents a strategic move by Astar to strengthen its market position and improve the overall health of its token economy.
