A Crypto Project Has Surprisingly Decided to Burn 5% of its Supply
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Token burning is not such a rare practice, and often some crypto projects, such as Shiba Inu, resort to this strategy to reduce supply and drive price growth by creating scarcity.
Astar Network (ASTR), a multi-chain smart contract platform, will burn 350 million ASTR tokens, which equates to 5% of its total supply. This move is a consequence of the vote of the project community.
The tokens originally reserved for the auctions of Polkadot for parachains, are no longer needed due to Polkadot’s discontinuation of this product. Previously, the 350 million tokens generated 70 million ASTR in rewards, which will now be redirected to the community treasury.
In March, Astar Network partnered with Polygon to integrate its first-layer blockchain AggLayer, with the goal of connecting different blockchains and providing unified liquidity using zero-knowledge proof.
This incineration initiative is seen as a significant step by the Astar Foundation. Reducing the total supply by burning tokens can increase the rewards of ASTR holders.
Additionally, the foundation proposes to transfer dApp staking rewards to the blockchain treasury to support future projects and ventures.
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