The tokens were initially set aside for a parachain slot on Polkadot but have become redundant and no longer serve their intended purpose.
Popular blockchain protocol Astar Network is initiating the burn of 350 million ASTR tokens, equivalent to $38 million, to enhance its tokenization. The move aligns with the forthcoming upgrade coming to Polkadot.
According to Astar Network, burning the reserve could benefit ASTR holders by decreasing the total amount staked, thereby increasing stakeholder rewards.
“We believe this burning event could significantly benefit ASTR holders by decreasing the total supply and enhancing staker rewards. It is essential to emphasize that this is a suggestion from the Astar Foundation, and we aim to open up a discussion to understand the community’s sentiment,” Maarten Henskens, head of Astar Foundation, said.
ASTR Token Supply and Allocation
The next steps involve a three-week open forum where community members can share their thoughts on the foundation’s plan. Following this, a one-week community voting period will decide the fate of 350 million ASTR tokens, which represent 5% of ASTR’s initial supply and are currently held in the foundation’s reserves. If the proposal is approved, the tokens will be permanently burnt, and the staking rewards will be redistributed.
Initially, the 350 million ASTR tokens were allocated from Astar’s launch on Polkadot’s parachain side chains. However, the upcoming Polkadot network upgrade, known as “Agile Coretime,” will phase out the parachain system, funded by crowd loan auctions, from the ecosystem. The development renders the reserved tokens needless, paving the way for their potential burning and reallocation, as proposed.
Agile Coretime Upgrade
The Agile Coretime upgrade marks a significant milestone for the Polkadot ecosystem, revolutionizing the allocation and pricing of blockspace. Unlike the traditional crowdloan mechanism, which requires users to lock up their DOT tokens for extended periods to secure parachain slots, Agile Coretime introduces a more dynamic and efficient system.
The upgrade also enables the flexible allocation of blockspace, which allows for optimized utilization and eliminates the need for prolonged token locks.
Upon implementation, Agile Coretime will enable projects like Astar Network to engage in dynamic bidding for blockspace, where pricing fluctuates in real time based on current demand.
The adaptive pricing system ensures a fair and market-driven allocation of resources, aligning costs more closely with actual usage. By introducing a dynamic pricing mechanism, Agile Coretime establishes a more sustainable and predictable model for projects to secure the blockspace they need, promoting a more efficient use of resources within the ecosystem.
