Astar’s technological evolution since its inception has been impeccable, creating a top-tier technological infrastructure designed and adapted in an accessible and intuitive way for builders to host on the network and design their dApps. This is clear, and I don’t intend to provide a historical review, as one only needs to visit their website to see the abundance of tools and development kits that have been created.The point is that with the publication of Astar Foundation Forward, an environment has been created that encourages sharing information or thoughts on what other actions are necessary to maintain the economic value of the network without damaging its essence, which is to continue building a network capable of creating economic value for developers and users.
In this writing, I aim to propose a new mission on how a new economic paradigm for the network should be approached. Let’s begin.
Current economic conditions in the altcoins market
It’s no secret to anyone that the crypto market in general is in a depreciative loop; interest has declined, especially in altcoins. ASTR is an alt and suffers from the market’s blows like all alts. In these times, it’s often necessary to make a 180-degree turn to face the prevailing negative economic vicissitudes. That’s why the Astar Foundation Forward initiative has all my respect; they have detected the economic gaps and are on track to resolve them as soon as possible. Below, I will contribute my grain of sand with the intention that the Foundation, users, and builders can observe my point of view on what should be incorporated into our ecosystem to give greater economic impetus to the network and our native token ASTR.
The economic financial Loop in Astar
Astar’s economy is led by dApp Staking; many projects have joined the program, obtaining a bag of ASTR from the inflation generated by staking to carry out their developments on the network. Others have also obtained UCG grants, but the truth is that we don’t have a project that leads as a spearhead on Astar—only half-finished developments that have extracted economic value from the network. For me, dApp Staking has reached its inflection point as an unchecked generator of inflation and not as contributory to the network’s value as it should be and for which it was born. We have been victims of overconfidence; despite existing selection filters, we have been punished, and if it weren’t for the community council, we would be even worse off, as lately they have accelerated the delistings of parasitic projects—if the word fits.
dApp Staking is still a gem that needs to be reformed, right? The idea is good, but the methods to induce its economic value must be changed with a 180-degree turn, as we will see later. It’s nice to criticize constructively, yes, but it’s even more pleasant to offer solutions that provide real value to the network and to dApp Staking. If you ask me right now, I would be very emphatic in asserting that for me, dApp Staking is currently in intensive care.
The Idea of Astar mutating into an Economic Financial Hub
Stablecoins are flooding the market, and there’s a reason for that: projects know that institutions have increased their appetite for stables, as they are the perfect vehicle to bring their liquidity (fiat) into the crypto ecosystem, more precisely into DeFi. The risk in stables is more controlled, and in perfectly balanced and harmonious DeFi ecosystems, great returns can be measured or established for both institutions and retail. This is attractive—imagine Astar going from being just a network for hosting infrastructure to being a “living” and thriving Economic network, by building a dApp that is its star product, hosting various traditional financial products in its UI/UX, such as savings, loans, borrowings, and farming? It would be a 180-degree turn for the network; we would leverage the potential of “USDSC,” which will soon receive tons of fresh liquidity. Why not take that big step? The arrival of USDSC could put us in an unbeatable position to absorb part of that liquidity:
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More users would join the ecosystem (it’s not just about establishing spending controls, but also about providing effective and efficient usage feedback, with a star product).
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Pairs of various cryptocurrencies and stables with ASTR would be established.
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Over time, we might mutate into a great dApp, and the network would sequentially reduce its expenses by levels. L1 networks require large amounts of money to maintain; dApps are less costly to sustain.
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A hybrid centralized and decentralized governance would be established:
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Centralized: For more specific decision-making, such as closing alliances with financial companies, strategies for specialized financial products, design of liquidity pools with their respective APRs and APYs.
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Decentralized: Voting power on community actions and sending community funds, Account Abstraction to enter the super Economic Hub, among other community actions.
As we can see, the development of an Economic Hub de facto eliminates the dependence on projects (that host on the network and participate in dApp Staking) returning economic value to the network, which often didn’t happen. Something that has become a future and uncertain cannot continue driving the economic value of our ecosystem; uncertainty is not good for projects nor for markets. Astar Foundation Forward has taken the spear, and I’m sure that even if what I write here is not the most viable for Astar right now for various reasons, some thoughts will remain for the future.
Mention of financial products and technical example
The Economic Hub would be based on the creation of a purely financial dApp that attracts liquidity and value to the network. There would be various vaults, pools, that can be accessible to merchants or investors; at the same time, it should serve as a liquidity entry gate and could even manage third-party assets in an AUM format.
The Hub could be:
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Conductor of liquidity and act as Capital Allocator.
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Have a Lending - Borrowing section.
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Have a Swap section.
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Commodities.
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Savings.
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And of course, have a dApp Staking section. You didn’t expect that, right? But as I said at the beginning, dApp Staking is not in question, but its method is; now it would form part of an ecosystem that doesn’t absolutely depend on it, but one that would feed it, creating a new economic and financial loop within Astar, moving to a new plane of development and economic conviction.
All controlled by vaults and pools that will provide entry to all the necessary liquidity to sustain and feed each financial product.The motto would be “if one fails, another will compensate”.
The best part is that dApp Staking would be more resilient, and all the pressure unloaded from its shoulders would disappear, but always with the original idea of strengthening the bond: Builder, Network, User.
Technical example of how economic value would be added to dApp Staking through the Hub’s products
Imagine the financial hub dApp as a decentralized modular structure, where the main products (savings, lending, borrowing, and commodities) are interconnected through vaults (bóvedas) and liquidity pools. These vaults act as secure reserves for storing and managing assets, while liquidity pools facilitate the exchange and flow of capital between products. In this case, I’ll use the lending section; in other words, imagining a figure as monthly revenue from the lending section and an amount to distribute among the dApp Staking projects:
For this example, we will take the following key figures:
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1M Revenue in USDSC (30 days), obtained from the lending section.
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30% of the lending Revenue to distribute among 50 dApp Staking projects to provide them with liquidity. It has the particularity that it will be in USDSC and not in ASTR, protecting our native token. This creates a reinvestment mechanism that strengthens the ecosystem.
Textual Illustration (Flow Diagram)
I’ll use a simple ASCII diagram to illustrate the capital flow and the organization. Imagine this as a flow chart where the lending revenue is divided and partially assigned to dApp Staking, which then distributes liquidity to the projects (assuming an equitable distribution for simplicity, as for this example I don’t have specific criteria like project size or performance).
+-------------------+ Revenue: 1M USDSC
| Lending Section | --------------------------> 70% Retained in Hub (700,000 USDSC)
| (Generated Revenue)| |
+-------------------+ | 30% Assigned (300,000 USDSC)
v
+---------------------+
| dApp Staking |
| (50 Projects) |
+---------------------+
|
| Liquidity Distribution
v
+-----------------------------------+
| Hosted Projects (50 in total) |
| - Project 1: 6,000 USDSC |
| - Project 2: 6,000 USDSC |
| ... |
| - Project 50: 6,000 USDSC |
+-----------------------------------+
Diagram Explanation
The lending revenue flows into two paths: 70% is retained in the hub for general operations (e.g., vaults and pools of other products).
The 30% is injected into dApp Staking as additional liquidity.
Within dApp Staking, this liquidity is distributed to the 50 projects. For this example, I assumed an equitable allocation (300,000 USDSC / 50 = 6,000 USDSC per project), but it could be adjusted based on metrics like TVL (Total Value Locked) or governance votes.
The hub’s vaults could act as “bridges” to transfer this liquidity securely, and the liquidity pools in dApp Staking would make it available for staking and rewards.
Formula for Capital Allocation
To mathematically illustrate the allocation, let’s define a simple and general formula. I’ll use variables so it’s adaptable, but we’ll apply it directly to the data from the aforementioned example (lending revenue = 1,000,000 USDSC, percentage = 30%, projects = 50).
General Formula:
A_staking = P × R_lending
Where:
• A_staking: Total allocation to dApp Staking (in USDSC).
• ( P ): Percentage allocated (as a decimal, e.g., 0.3 for 30%).
• R_lending: Total revenue from the lending section (in USDSC).
If then distributed equally to the projects:
A_project = A_staking / N
Where:
• A_project: Allocation per project (in USDSC).
• ( N ): Number of hosted projects (50 in this case).
Application with Your Data:
A_staking = 0.3 × 1,000,000 = 300,000 USDSC
A_project = 300,000 / 50 = 6,000 USDSC per project
This formula ensures a proportional and transparent allocation, and can be implemented in smart contracts (such as Solidity), which is the house specialty, to automate the distribution, with monthly triggers based on the accumulated revenue.
As we can see, we only take 30% of the 1M USDSC revenue obtained from a single section of the Hub—it’s ambitious, isn’t it? But it could be initiated in layers or levels of development; the remaining 70% of the revenue could be used for buy back and burn of ASTR, which also serves as an effective deflationary mechanism, but I won’t delve into that right now.
Note: the revenue can be monthly, bimonthly, quarterly, or every 6 months, depending on market conditions. For the example, I based it on figures that could be generated in one month; I didn’t include the 30 days in the formula because for now I didn’t see it as relevant for illustrating the main example, which in reality might be a short period.
I have been observing the general ecosystem for a long time, and also a long time as an Astar agent, and this is my vision of how the network should address the new times—it is my personal vision and based on methods that would completely change the face of Astar’s main functions, renewing the spirit by mutating into a more economically sustainable network. That’s all.
zkVan.
