350M ASTR Destroyed; What About Astar Network Tokenomics?

Astar Network's Economic Strategy: Token Burn and Its Implications

On July 8, Astar Network, Japan's most popular smart contract platform burnt its 350 Million Astar (ASTR) tokens after the community’s approval. The action influenced  Astar Network Tokenomics, and reduced the total supply by 5%.

The platform shared the burning news over X as well as through the blog. 

Source: X

On July 2, the network decided to burn its specified amount of tokens to surge token value and improve Astar Network Tokenomics. These tokens were preserved for Parachain auctions and are no longer required due to the update in the Polkadot system. Moreover, it was also estimated that eliminating the tokens will also increase the staking rewards for the decentralized application (dApp) staking community. 

What’s the Need for ASTR Token Burn? 

Token burns are generally considered bullish events in the cryptocurrency market. By reducing the total supply of a token, the remaining tokens can potentially increase in value due to scarcity. 

Keeping the scenario in mind, the Astar community supported the network’s proposal to burn 350 Million ASTR tokens from the parachain reserve. The Astar Network's strategy to burn a portion of ASTR tokens will likely lead to a deflationary effect, potentially raising the value of remaining tokens and enhancing staking rewards. 

This move aims to reduce inflation, boost market value, and create a sustainable token economy, reinforcing Astar's commitment to growth and community value. Moreover, a direct influence of the action was noted on ASTR’s price. 

Astar Network Tokenomics and Price 

According to CoinMarketCap, the ASTR token has a total supply of 8,159,136,198 and a circulating supply of 6,140,843,400. The reviewed Astar Network Tokenomics will involve token distribution for users & early supporters, On-chain DAO, Parachain auction, Protocol development, marketing, foundation, team, and early financial brokers.

Source: Astar Network   

In the past 7 days, the ASTR token experienced a drop of 7.20%, declining from $0.07105 on July 1 to $0.0585 on July 8. However, the token burning news surged the token value to $0.06531 at press time, showcasing a spike of 1.86% in a day with $401,535,303 in market cap and $52,363,675 in 24-hour volume.  

If things remain positive, the crypto market may witness highs in ASTR token price soon. 

Conclusion

Astar Network's strategic burn of 350 Million ASTR tokens, constituting a 5% reduction in total supply, is a significant move towards strengthening its tokenomics. This action is expected to create a deflationary impact, potentially enhancing the value of ASTR tokens and increasing staking rewards. The initiative reflects Astar's dedication to fostering a sustainable token economy and reaffirms its commitment to community growth. 

Read Also: SHIB's Massive Burn Surge, 232 Million Tokens Up in S