Astar Network implements second phase of Tokeneconomics 2.0, updates system for fair rewards
Astar Network is moving into its second phase, called Tokenomics 2.0.
Today, changes have been incorporated to introduce a hybrid inflation model.
These changes are intended to bring the network closer to the upcoming DApp Stake v3, which is designed to fairly reward ecosystem participants while limiting financial incentives.
The main problem that needs to be solved is fixed inflation. Currently, Astar issues the same block reward regardless of whether network utilization is 5% or 40%.
This extends to dApp staking where the reward pool remains constant regardless of the active dApp.
The new update aims to dynamically adjust inflation based on network activity.
Another key focus is making dApp staking more scalable and inclusive.
The reward pool will now scale based on the number of active dApps, and the inflation rate will also be adjusted accordingly.
According to A-star, the Treasury is currently being overcompensated. They believe the allocation of inflation rewards to developers needs to be rebalanced.
Despite previous declines, Collator rewards remain high. Astar plans to improve this through the future Astar Consensus project for better inclusion and robustness.
What the update brings
With Tokenomics 2.0, Astar plans to overhaul the compensation system for DApp developers and introduce time limits for DApp ratings.
Investors who participate regularly will enjoy additional rewards, while investors who fail to meet the claim deadline will be penalized.
Each Astar block currently creates 253.08 new ASTR tokens, with an annual inflation rate of approximately 9.5%.
The new Tokenomics 2.0 model aims to reduce this to approximately 5.8% per year.
The solution is to fix the treasury allocation at 5% of annual inflation and allocate 3.2% of annual inflation to collators.
Although nominally reduced, aligning EVM fees with substrate base fees will significantly increase collator fee revenues.
Improvements to the collator system are planned over the next year through the Astar Consensus project, aimed at strengthening its comprehensiveness and robustness.
Astar Network, led by Sota Watanabe and his team, plans to become a “smart contract hub” for Polkadot, acting as a parachain.
ASTR, our native token, supports this development.
Just yesterday, South Korean cryptocurrency exchange Upbit announced the inclusion of ASTR on its trading platform.