Astar Network Implements Second Phase of Tokenomics 2.0, Updates System for Fairer Rewards

Astar Network is progressing into the second phase of what it calls Tokenomics 2.0.

Today, changes have been integrated to introduce a hybrid inflation model.

This shift is intended to bring the network closer towards the upcoming DApp Staking v3, designed to equitably reward participants in the ecosystem while capping treasury incentives.

Facing Inflation

The primary issue being tackled is fixed inflation. Currently, Astar issues the same block rewards, whether the network is 5% or 40% utilised.

This extends to dApp staking, where the reward pool stays constant regardless of active dApps.

The new update aims to dynamically adjust inflation based on network activity.

Another key focus is making dApp staking more scalable and inclusive.

The rewards pool will now adjust based on the number of active dApps, with inflation rates scaling accordingly.

According to A-star, the treasury currently receives excessive rewards - they feel that the allocation of inflation rewards to developers needs rebalancing.

Collator rewards, despite a previous reduction, remain high. Astar plans to refine this through the future Astar Consensus project for better inclusivity and robustness.

What the Update Brings

Through Tokenomics 2.0 Astar will overhaul the reward system for DApp developers and introduce a time limit for DApp grading.

Regularly engaging investors will enjoy additional rewards, while those missing claim deadlines will face penalties.

Fixing the Problem

Each Astar block currently generates 253.08 new ASTR tokens, constituting an annual inflation rate of approximately 9.5%.

The new Tokenomics 2.0 model aims to reduce this to around 5.8% per year.

The solution involves fixing the treasury allocation at 5% of yearly inflation and assigning collators 3.2% of the yearly inflation.

Although a reduction nominally, aligning EVM fees with Substrate native fees will substantially boost collator earnings from fees.

The refinement of the collator system is slated for the next year through the Astar Consensus project, aiming for enhanced inclusivity and robustness.

Astar Team

Led by Sota Watanabe and his team, Astar Network envisions becoming Polkadot's "smart contract hub," serving as a parachain.

The native token, ASTR, underpins these advancements. Just yesterday, Upbit, a South Korean cryptocurrency exchange, announced the inclusion of ASTR to its trading platform.

* Original content written by Coinlive. Coinbold is licensed to distribute this content by Coinlive. https://coinbold.io/astar-network-implements-second-phase-of-tokenomics-2-0-updates-system-for-fairer-rewards/

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