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Astar Network: The Multi-Chain DApp Hub


As part of our continuing Polkadot Giga-Brain series, we are pleased to present another one of our top picks from batch 1. We are all familiar with bridging assets between various chains to get around the inherent lack of compatibility between various blockchains. But what about bridging development environments?


One of the more innovative projects we have seen on the Polkadot ecosystem to date, this is exactly what Astar Network seeks to achieve with their brand-new approach to decentralised application development and their creative incentive program. In this journal we will explain why the project is so innovative, how to claim rewards, and where to go to earn interest on these rewards from the start!


Disclaimer: NOT FINANCIAL NOR INVESTMENT ADVICE. Only you are responsible for any capital-related decisions you make and only you are accountable for the results.


Fundamentals

Astar Network is a Layer 1 blockchain built on Polkadot that provides Web3.0 developers with the infrastructure to create scalable applications using a number of programming languages. Where Moonbeam focuses solely on EVM (Ethereum) compatibility, Astar is geared towards bridging EVM/Solidity development and WASM/Rust development in one place, creating a DApp hub that can be used by developers from most backgrounds.


Throw in the fact that DApps created using all of these languages are not only interoperable with each other, but with the entire Polkadot ecosystem it becomes clear why Astar secured a slot in the first batch of auctions.

In the context of blockchain, a Virtual Machine (VM) is kind of like a computer that runs on-chain, storing its state and updating every block (this is a gross simplification). Astar uses a Virtual Machine called the X-VM (Cross Virtual Machine) that allows instances of the Ethereum Virtual Machine and the Web Assembly Virtual Machine to communicate with each other. It’s the X-VM that allows DApps written in different languages to operate together seamlessly.


Over and above the developer friendly environment, Astar also integrates various Layer 2 solutions such as Plasma, ZK, and Optimistic Rollups so that any applications and uses are scalable from day one.


DApp Staking

DApp staking is another innovation that Astar brings to the table. Over and above regular staking for the purpose of securing the network, participants are able to delegate their tokens to application developers (called “operators”) with both the stakers and the operators earning ASTR rewards for their contribution to the development of the ecosystem.


In essence this provides developers building on Astar a basic income, bootstrapping their activities, and mitigating the reliance on either their own funding, or funding from predatory VCs etc. Basically, they can focus on development from day one, with their rewards determined by performance. How is this performance measured? By the number of stakers, or “nominators”, that are backing a developer.

Staking rewards are distributed every block in a 5:4:1 ratio:

  • 25% of the rewards go to the operators that create and maintain DApps on the network.

  • 25% of the rewards go to nominators that are supporting their chosen DApps.

  • 40% of the rewards goes to the Astar Treasury.

  • 10% of the rewards go to the collators that process transactions and secure the network.

Operator positions can be bought and sold similar to how businesses can be bought and sold. Overall, this internal economy not only locks up large portions of the circulating ASTR tokens which is beneficial for all holders, but also creates incentives for development and healthy competition between various projects to try and secure a larger share of block rewards.


Tokenomics

ASTR is the utility, governance, and economic token of the Astar Network. The use cases are as follows:

  • Nominated PoS – tokens are staked to secure the network.

  • DApp staking – outlined above.

  • Paying transaction fees.

  • On-chain governance.

  • L2 developers can deposit ASTR and create an L2 solution for their L1 smart contracts.

At the time of launch there was a 7 billion ASTR total supply, with an uncapped max supply and a fixed inflation rate of 10% per year. ASTR is distributed as follows:

  • 30% to user base and early adopters (there were various lockdrops in the past with up to 150,000 ETH locked).

  • 20% to Crowdloan rewards.

  • 10% to the Astar Foundation.

  • 10% to Ecosystem Development.

  • 10% to Financial Backers (seed investors).

  • 5% to an Auction Reserve (for securing future Parachain slots).

  • 5% to the DAO.

  • 5% to Marketing.

  • 5% to the team.

It is unclear at the time of writing what the circulating supply is at present. However, we can still make a market cap valuation target and we will update this report with a token target once we have the figures on the circulating supply.


We believe that the DApp staking initiative will have a similar supply effect that the Polkadot Parachain Auction/Crowdloan lockup will have. Coupled with the traditional staking options, and the deposit required to create Layer 2 solutions for Astar DApps, we believe that over time a large portion of the supply will largely be locked up within the ecosystem. The fixed inflation rate of 10% per year is pretty standard, comparable to Polkadot itself, and so there are no concerns on our end about an inflated supply 24 months down the line.


The innovative development environment we believe should attract development talent to Astar; however, this is speculative and the rate of development on the network will largely be tied to the rate of development across the Polkadot ecosystem at large. Still, Astar is a Layer 1 blockchain that does bring something new to the table.


Comparable development environments would be Polygon and Cosmos, each with a market cap of around $15 billion. Even though the infrastructure has been in development for over 2 years (originally as Plasm Network), we believe it will take time for developers and users to adopt Astar as a viable option for DApp development. This will be in line with the adoption of the wider Polkadot ecosystem which is still essentially in its infancy. For these reasons, we believe that a market cap of around $10-15 billion is achievable by 2023.


Claiming

As is the case with all Parachain auctions, there was a few options for contributing to the Astar Crowdloan. Please note that only 10% of the total rewards are available at launch, with the rest vested over the 96 week lease period.


Centralised Exchanges

CEX rewards should have been distributed through the appropriate exchange account.

Astar Network Website & Parallel Finance

ASTR rewards should be available to view within the Astar.Network application:

  • In the Polkadot.js extension, set the account to “Allow Use On Any Chain”.

  • Go to https://portal.astar.network and connect the Polkadot.js extension.

  • Rewards should appear within the wallet.

Bonus rewards from referrals on Parallel Finance haven’t been distributed yet, however they should also appear here once that process has been carried out.


Staking

Since there are not any DApps in development yet, but block rewards are still being generated, Astar has offered a Stake2Earn initiative whereby all nominators (that would be us) receive 49.5% of the block rewards instead of the standard 25% since there is no DApp staking available yet. Here’s how it works:

  • There will be a list of available pools to choose from.

  • At this point, it doesn’t matter what pool we choose as the distribution is equal and they will all likely be filled pretty quickly.

  • In future, the pools will be related to various development teams/applications.

  • We simply connect our wallet, find a pool, and click stake.

  • Rewards will be distributed to the pools every era, as indicated by the “Current Era” display.

  • Rewards will automatically be claimed as soon as anyone in the pool hits “Claim”.

  • The pool we have delegated to will appear similar to the above.

  • Participants are able to stake their vested tokens as well as the unlocked ASTR.

  • ASTR can be unbonded immediately.

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