The newly proposed tokenomics present some changes aimed at driving the long-term success and sustainability of the Astar network ecosystem. The primary alterations in this model, compared to the previous one, focus on dynamically adjusting the rate of ASTR emissions, in part by introducing burn mechanisms, and to achieve greater balance and alignment of incentives between builders and stakers participating in the dApp staking system, even as the network grows.

One of the key strategies of the new model is the deliberate increase in the portion of block emissions allocated to dApp builders — which creates a more consistent reward structure across different tiers of dApps, that also scale as they grow. This focus recognizes the important role that dApp builders play in the Astar ecosystem.

Astar proposed example of the new block emissions distribution

For collators and the treasury, the model proposes a reduction in the portion of new emissions allocated to them with a fixed amount. This reduction ensures a more equitable distribution of resources within the system, striking a balance between incentivizing participants and promoting growth.

Besides the already existing transaction fee burning, an extra burn mechanism is being introduced to bolster emissions reduction within the proposed model. This mechanism targets tokens that cannot be used effectively, including fee burn and block reward burn. By effectively reducing the ASTR emissions rate, the burn mechanism plays an important role in the new model, in part by removing incentives from circulation when they haven’t been allocated effectively but also by reducing the dilution of value.

The new emissions reduction mechanism will burn emissions that are ineffectively allocated

The new tokenomics model also introduces a fee model that harmonizes Native and EVM fees, and includes a transitional implementation scheme to prevent fee shock during the rollout phase.

In summary, the Astar Tokenomics 2.0 model attempts to create a stronger foundation for long-term growth and appreciation of network value through a more optimized distribution of block emissions, a dynamic inflation rate aided by burn mechanisms, and a tiered dApp staking incentive system for builders designed to grow as they do. These changes will foster a healthier economic ecosystem, benefit all network participants, and encourage sustainable development.

Read more about the Astar Tokenomics 2.0 proposal on our forum.

About Astar Network

Astar is Japan’s most popular smart contract blockchain, supporting both EVM and WebAssembly (Wasm) environments and interoperability between them using a Cross-Virtual Machine. Backed by the shared security of Polkadot, Astar shines brilliantly on its own within a vibrant and healthy ecosystem and is a leading star in the blockchain industry overall, driving international corporate adoption and consumer interest in web3 technologies.

Astar’s Build2Earn program is designed to grow the network in an innovative way, while simultaneously rewarding participants and builders. It allows developers to earn incentives for building and maintaining their decentralized applications and users to earn incentives for supporting their favorite projects, all while encouraging the growth of the ecosystem overall.