- Astar Network reduced its base staking rewards from 25% to 10% to combat token inflation.
- The changes have already reduced annual inflation rate from 4.86% to 4.32% and lowered token emissions by 11%.
- ASTR token hit an all-time low of $0.02 on April 7, 2023, which is 93.8% below its January 2022 peak.
Astar Network has implemented significant changes to its tokenomics model in an effort to reduce inflationary pressures within its ecosystem. On April 18, the blockchain firm announced a reduction in base staking rewards from 25% to 10% as part of a broader strategy to control token inflation.
The company explained that these adjustments aim to establish a more stable annual percentage rate (APR) for users as the network approaches an ideal staking ratio. "This change lowers automatic token issuance, reducing overall inflationary pressure while maintaining strong incentives for users to stake their ASTR," the company stated in its announcement.
New Inflation Control Mechanisms Implemented
Unlike Bitcoin with its fixed supply cap, ASTR tokens operate on a dynamic inflation model without a maximum supply limit. This unlimited supply model can create downward price pressure over time if token demand doesn’t keep pace with increasing supply.
To address this fundamental issue, Astar has introduced multiple inflation-control mechanisms. Beyond reducing staking rewards, the network has begun routing token emissions into parameters governing total value locked (TVL)-based rewards, such as decentralized application staking. This change is expected to make DApp staking APRs more predictable.
Additionally, Astar established a minimum token emission threshold of 2.5% to ensure emissions don’t fall below a sustainable baseline. The network’s transaction fee burning mechanism will continue to operate, further contributing to reward predictability.
According to Astar, these changes have already shown positive results, reducing the annual inflation rate from 4.86% to 4.32%. Total tokens emitted per block have decreased from 153.95 to 136.67, resulting in an 11% reduction in estimated annual emissions – from 405 million to 360 million ASTR tokens.
Token Performance Context
Astar Network’s tokenomics revision comes at a critical time for the project. CoinGecko data shows that the ASTR token reached an all-time low of $0.02 on April 7, marking a 93.8% decline from its January 17, 2022 peak of $0.42.
The token had previously participated in the broader market rally during December 2024, reaching $0.09, but subsequently experienced a continued decline until hitting its record low. The new tokenomics model appears to be a direct response to these challenging market conditions and part of a broader strategy to strengthen the token’s economic fundamentals.
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