Astar Tokenomics 2.0: A Dynamically Adjusted Inflation

Table of contents


Hello everyone,

This post will explain in more detail how the recently announced Astar Tokenomics 2.0 will drive Astar’s sustainable growth & improve user engagement.

Our team has invested significant time and effort into simplifying this information by breaking it down into more digestible chunks while ensuring that all the essential aspects are covered. Nevertheless, we acknowledge that it remains a vast and intricate topic that may require some time to grasp fully.

We worked closely with an external tokenomics expert team for 3 months to help us analyze the current tokenomics state and propose a new model to ensure Astar’s sustainable growth.

After reading this post & accompanying documents, you will have a clearer picture of the following:

  • How the current tokenomics works.
  • How Astar inflation will be reduced & why that’s good.
  • How native & Ethereum fees will be aligned.
  • How dApp staking v3 tier system is integral to the new tokenomics.

This post will serve as a summary of all the information. For more details, please refer to the linked materials, which contain more in-depth information & explanation. These are mandatory for readers who want a more in-depth understanding.


Considering if we deployed the proposed model immediately along with dApp staking v3, the inflation would be around 5.8% (and likely even lower since this estimate does not account for transaction fee burning).

Current Tokenomics Overview

The best place for the reader to start is the current documentation which can be found here. Please make sure to familiarize yourself with it before reading on.

Block Rewards

Each block produced on Astar emit 253.08new ASTR tokens. This is how inflation works. This amount is fixed, meaning the inflation rate is set to roughly 9.5% per year, based on the initial supply.

Once the253.08 ASTR tokens are emitted as block rewards, they are distributed to various actors in the network. The collator responsible for authoring the block receives a part of that amount, and the on-chain treasury receives a fixed amount plus some dynamic amount, depending on the TVL. Most of the treasury amount will go to the dApp staking protocol - to reward builders and stakers.

Under the current model, the builder’s reward pool receives a fixed amount of the rewards, making it a zero-sum game. As more dApps are registered, the same reward pool is split among more dApps. On contrast, as the total value locked (TVL) increases, the protocol provides stakers a larger chunk of the block reward.

Some readers will take issue with this approach (you’re also encouraged to check dApp staking v3 forum post) - which we’ll discuss more in the following chapters, but first we’ll explain the fee system.

Transaction Fees

Each block is a limited resource - it can only fit a limited amount of transactions. This is an oversimplification, but the point is that every transaction included in the block consumes a portion of the block’s resources.

Astar is a parachain in the Polkadot ecosystem, which relies on the shared security the Polkadot relay chain provides. However, it comes at the cost of having certain limitations placed on block resources. Most readers should know that a block is produced on Astar every 12 seconds - a limitation imposed by Polkadot. Only 0.5 out of those 12 seconds account for the time required to execute the block. This means it takes 0.5 seconds of execution time on some CPU to execute the block logic. This is the first limiting resource - usually called ref time (time required to execute on the reference machine).

As a simple example - consider a token transferred from Alice to Bob. If such a transaction consumes 0.001 seconds of execution time, executing two such transactions in a single block would consume 0.002 seconds. Calling a smart contract, e.g., a DEX swap, is much more resource intensive and may, for example, consume 0.01 seconds, or 100x that of a simple transfer from one account to another.

The other limiting factor is the Proof of Validity (PoV) size. Since Polkadot validators provide security by validating blocks authored by parachain collators, they need access to the data required to validate the block. Expanding on the previous example with Alice and Bob, Astar would need to provide Polkadot validators with information about how many initial tokens Alice and Bob had and the transaction itself. This is (almost) enough data for validators to work with, but it is strictly limited to only 5 megabytes per block.

In summary, there are two main factors limiting block production: ref time and PoV size, which taken all together, are collectively referred to as weight, an important concept when calculating transaction fees.

Native Fees

Native fees are applied to normal transactions, native to Substrate. For example, balance transfer, using dApp staking, creating a multisig, voting on a referendum, etc.

They are calculated using a model commonly used by Polkadot and (probably) all parachains.

tx_fee = tx_length_fee + base_fee + c * weight_fee + tip

  • tx_length_fee - this is part of the fee related to the transaction length (number of bytes).
  • base_fee - a fixed fee that needs to be paid for every transaction included in the block.
  • weight_fee - is the fee related to the weight of the transaction; right now, it scales with ref time - the more CPU time required, the higher this fee will be.
  • c - adjustment factor; if network utilization is above ideal, c factor will increase, forcing users to pay more for weight.
  • tip - extra payment transaction submitter pays to ensure their transaction gets included faster into a block.

Ethereum Fees

Astar is fully Ethereum compatible. This means it also supports Ethereum’s gas concept. Gas is similar to weight but not quite the same. As a result, Ethereum transaction fees are calculated a bit differently. A simplified formula looks like this:

tx_fee = gas * (base_fee_per_gas + priority_fee_per_gas)

  • gas - encapsulates all the resources spent to execute the block.
  • base_fee_per_gas - how much needs to be paid by the user per unit of gas.
  • priority_fee_per_gas - how much is the user tipping each unit of gas.

Comparing it with the previous example using native fees, it’s clear that Ethereum transactions are quite different. They are less configurable, and more information is hidden from the user. Regardless of the transaction type, 20% of the fee is burned, adding a deflationary force to the system. The remaining 80% is received by the collator responsible for authoring the block.

Generally, the more block resources consumed, the more user has to pay. That sounds fair :slightly_smiling_face:.

Rent Fees

Rent fees are quite simple - the idea is to charge users who perform an action that results in the creation of some new storage. E.g., database entries on-chain. If the user removes some of the entries and reduces the amount of data stored on-chain, the rent fee is returned. Essentially it’s a deposit.

It’s commonly used in governance functionality, identity, multisig, and Wasm (ink!) smart contracts. E.g. if users create a new identity on-chain, they must pay a deposit fee. If they decide to remove it after some time, they get their full deposit back.

This is important for Astar since we support Wasm (ink!) smart contracts that rely on the rent fee mechanism. On the other hand, we also support EVM, which operates differently - when storage is created, the price of that storage is included in the gas fee, and even if some storage is removed later on, the user doesn’t receive a refund.

Problems We Would Like To Address

High & Fixed Inflation

The block reward is fixed regardless of how much the network is utilized. E.g., whether TVL is 5% or 40%, Astar still issues the same block reward. The same goes for dApp staking rewards, where it doesn’t matter if there is only 1 dApp, or 100 dApps - the reward pool stays the same.

The inflation rate should be lowered and made adjustable based on certain network parameters.

Scalable & Inclusive dApp Staking

Issues inherent in the current dApp staking (V2) model were outlined here, along with a proposed solution. The new design will require slight changes, but the core concepts remain unchanged.

The dApp staking rewards pool should be dynamic, based on how many dApps we have active in the protocol. The inflation rate should be raised if the rewards pool supports 50 dApps, compared to where it should be if it only supported 5 dApps.

Native & Ethereum Fee Alignment

Currently, native Substrate & Ethereum fees are not aligned with one another. Ethereum fees are inexpensive, while Substrate native fees are greater, they are still inexpensive.

Let’s consider a transaction that consumes 50% of a block. Ideally, fees should be the same whether executed on the native Substrate or Ethereum VM. Considering how the two systems differ, we should at least strive to align the transaction execution fees as much as possible.

We want the solution to be as inexpensive as possible while making fees tangible compared to the total supply and inflation rate.

High Treasury & Collator Rewards

The treasury receives excessive rewards at the moment. It’s important to consider that the dApp staking protocol is essentially an extension of the treasury, to which a significant portion of the inflation rewards is allocated to developers. It’s important to maintain this treasury. However, its allocation as a percentage of the total block rewards should be reduced.

Collator rewards are still quite high, even after a reduction some months ago. It’s important to consider that collators don’t bring any security to the network - that’s why there are Polkadot validators. Having 72 collators means that the inflation rate has to support 72 actors in the network, who all have to cover maintenance expenses.


For a more detailed explanation of the current state, please refer to the official report:

Some changes were made to the document to make it public, but all the information important for this post remains.

Proposed Solution

No solution is a silver bullet. Instead, the changes need to occur incrementally through a series of progressive steps to elevate Astar’s tokenomics to a better place for a sustainable future.


Unlike the current system, where block rewards are fixed, the new inflation rate will dynamically adjust every year based on the total supply at the time of adjustment. Using current on-chain data, an estimate of yearly inflation, considering if we deployed the proposed model immediately along with dApp staking v3, would be around 5.8% (and likely even lower since this estimate does not account for transaction fee burning).


Remove the dynamic treasury allocation and assign a fixed rate of 5% of the yearly inflation.


Collators will receive 3.2% of the yearly inflation. This is a reduction compared to what it is currently. However, since EVM fees will be aligned with Substrate native fees, collators will earn significantly more from fees overall.

The collator system will be addressed in a separate project (Astar Consensus) to make it more inclusive & robust. We expect this next year.

dApp Staking


The amount of inflation going towards stakers will remain roughly the same, but the ideal TVL will be reduced with overall inflation. This means that inflation-adjusted return will be increased for all stakers, giving their earnings higher value.

The ideal TVL will be reduced to 50%, making it more attainable, and base staking rewards will be increased to help achieve that.

Given that dynamic treasury inflation will be removed, the dynamic staking portion will only be minted if certain TVL requirements are met. Consequently, this means less inflation overall when the ideal TVL is not met.


Builder rewards will receive the biggest overhaul compared to the old system.

dApp staking v3 will introduce tiers, making the system more inclusive for new dApps, while continuing to provide lucrative rewards for existing ones. Before starting a new period, the system will calculate the tier configuration based on the average ASTR token price during the last period. This aims to ensure each tier’s rewards are significant, however, not excessive. Clearly, if the ASTR token price is 1$, we can support a greater number of dApps than if it were only 0.05$.

We’ve opted for 4 distinct tiers in the new model. The following table roughly approximates what the reward distribution might look like per month (full B&E period month):

ASTR price (in $) Number of slots Tier 1 reward per dApp (in $) Tier 2 reward per dApp (in $) Tier 3 reward per dApp (in $) Tier 4 reward per dApp (in $)
0.01 60 7 812 2 929 1 302 488
0.025 75 16 739 5 859 2 663 945
0.05 100 23 435 8 788 3 906 1 465
0.1 150 31 247 11 718 5 208 1 953
0.2 250 37 496 14 061 6 249 2 344
0.5 550 42 609 15 978 7 102 2 663
1 1050 44 638 16 739 7 440 2 790

To qualify and be selected for a particular tier, dApps must meet certain TVL requirements, which may change as the network grows. If dApp staking slots aren’t filled, the rewards for the periods the slots are empty are burned.

Transaction Fees

The solution here is quite simple - align Substrate native & Ethereum fees as much as possible. If transactions consume the same amount of block resources, they should be priced roughly the same. There will also be some improvements to this in the near future, as we’ll be able to measure Ethereum transaction resource consumption similarly to how we quantify Substrate native fees.

These fee changes won’t happen overnight. Instead, they will be implemented gradually over a period of time (e.g. 3 months). The fees being burned will be increased to 80%, with 20% being deposited to the collators. This does not include the tip portion that will be paid out to collators in full.

Rent Fees

Rent fees will be reduced by a factor of 100, making on-chain storage significantly cheaper. The balance we’re striving for is between that of network security and the impact of the overall fee amount.


The main modifications to the inflation model and dApp staking protocol are summarized below:

  • If TVL is not in the ideal range, not all staking rewards will be minted.
  • If empty slots are present in dApp staking during a period, the rewards for that period normally allocated to those slots will be burned.
  • Transaction fees will incur a significant burn.
  • The inflation rate will constantly adjust to on-chain parameters.

Let’s remind ourselves that whatever we implement on the network isn’t written in stone. Anything can be adjusted. However, we should consider making changes slowly and quite deliberately for the stability and health of the network.


Over the course of 3 months, a few working docs were created:

The final report can be found here:

Next Steps

  • Open up community forum discussion
  • Share implementation plan & execution (plan will be shared this month)
  • Create comprehensive documentation (goes parallel with the implementation and execution strategy)

It’s going to be truly exciting to witness the implementation of all these Tokenomics 2.0 strategies. It’s set to usher in a new level of balance in reward distribution for all blockchain participants. Particularly noteworthy is its targeted emphasis on stimulating development activity of dApps, thereby fueling their aspirations for network expansion and more engagement.


I have just made a first reading of the documentation. It is a well-founded and detailed work.
My main ideas,

1.The system maintains its essence of rewarding those who build and those who trust those who build, it is that unique. Also, by having a permanent incentive to the creation of new DApps this should generate more usability of the token, since Dapps require it for their operation. And if there is more usability of the token, then it should generate buying pressure from the end user, which is good for the protocol and good for the holder. I think the token will absorb the value.

  1. As I see in the drawings, the staker rewards increase, which seems to me to be a good incentive for those who are already stakers to stay and for new stakers to arrive, which should generate an impulse to buy the token.

  2. The Dapp Staking mechanism evolves into a competition. DApps will have to create mechanisms to attract stakers and give them their trust. I believe that we are entering a new stage of free competition and perhaps the Dapps will have to incorporate elements to build the loyalty of their users and their stakers. (Here begins the Dapps war).

  3. Finalmente creo que un mecanismo de inflación dinámica se ajusta mucho mejor al tiempo actual y la funcionalidad de quema será bien recibida por el mercado.

These are my first impressions, I think I will review the documentation in detail and I will also try to transfer the concepts to the Latin community.

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super exciting about the new tokenomics, like the dapp staking part, so astar can get more dapp staking when the TVL grows, and then it will attract more projects to the eco, the team obviously took a lot of energy and time to figure out this great inflation model, thank you!

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Is very good the great job you are doing. I’m so excited with this. Absolutely amazing :100:! Let’s go for big Astar family!:star2::rocket:
Thank you

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Thanks a lot for showing your support!
I’m also looking very much forward with this implementation. Everything should be set in place in Q4 this year. This includes auditing of dApp Staking v3.


Finalmente creo que un mecanismo de inflación dinámica se ajusta mucho mejor al tiempo actual y la funcionalidad de quema será bien recibida por el mercado.

Think you missed translating this part.
Thanks a lot for your comments and for sharing your insights after reading the forum post. This is very helpful for us to understand what stands out and what needs more clarification.

Sharing this in the Latin community is very important, having them to understand this in their native languages is very important for them to understand that Astar is working on a sustainable future with a main focus on the growth of our network. Latin community for us is a very important community. Thanks for your contributions.


Storage fee on Astar Native (WASM) will be reduced significantly. This I believe will trigger massive usage on wasm based dapp


It seems that with our new model, we will increase the value of the Astar token and make it easier for new developers to join our ecosystem. As a developer, I understand the challenges. With DApp stake version 3.0, I believe new users need to contribute more to new projects. Additionally, we are transitioning to a tokenomics with less inflation than most countries. I’m curious about what awaits us in the coming days. Let’s build the future!


That’s an amazing update! Thanks for sharing @Maarten. I appreciate the hard work the team is putting on remodeling Astar tokenomics. Thanks!!!

My only concern is about reducing the % for collator. Once couple months ago, we already reduced to 5% the rewards for collators. I am wondering if the team get any feedback from them? What they think about it, and what are the possible impacts in our ecosystem?

I am super excited to see what the future holds for ASTR. Let’s get bigger and bigger.

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Impressive work by the Astar team on unveiling Astar Tokenomics 2.0. The proposed changes addressing inflation, dApp staking, and fee alignment seem promising.

Could you shed light on the timeline for fee adjustments and the Astar Consensus project’s features? This revamp certainly sets the stage for Astar’s growth.

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I didn’t receive any feedback from collators in our network regarding the reduction, or the feedback didn’t reached to me. Why we are reducing it is described in the forum post. There will be no impacts on our ecosystem after analyzing the current set. Personally, I don’t have any concerns.


I am sorry.

what I was mentioning at that point is that I think a dynamic inflation mechanism is much better suited to the current time and the burning functionality will be well received by the market.


@Maarten After going through the docs you provided, I didn’t find a clue about the new ASTR block rewards change from 253.08 to 215.25 with a new inflation rate of 5.8%, which is quite different from the old one. Based on my knowledge, inflation shrinks partly because of the block reward decrease from 253.08 to 215.25 (I omitted the smaller one of 123.98, regardless of other factors mentioned in the docs such as a TVL lower than the ideal one and burn).
Can you show some sources of these two digits, the new block rewards of 213.25 and the inflation of 5.8%?

123.98 ASTR is the fixed block rewards and the rest is dynamically dependant to TVL. 5.8% is an estimate if we have this model today with dApp Staking V3. However with dApp Staking we won’t know how much would dApp can collect the stakers and tokens, and that means the number can decrease even more. (if dApp could not collect the tokens they won’t go into the specific tiers and unfilled rewards slots are burnt)


Thanks. @Kahori
I think I can understand the number of 123.98 which is part of block rewards. But Can you give some more clues about the number of block rewards change? Any maths or experiment the team did before? It seems the number suddenly changed from 253.08(current) to 215.25 (future) with 15% off. Is this a fixed cap that will be implemented or will modified with some situation change?

It is a flexible model that in future we can change the parameters with our future governance. The changes we made, you can just check those two graphs which has percentage as well as actual block rewards. The reduction mainly come from Treasury (26.57+Dynamic potion → 10.76) + collators (13.41-> 6.89) as you can see. Build2Earn allocation percentage increased (39.99 → 52.52) but Base staker rewards are almost the same as before. Dynamic allocation ~91.27 is saved to scale. The third party team and Astar internal team carefully came to this numbers. Please also check the full report.


a few questions:
1、According to the 2 diagrams disclosed, does it mean that after the implementation of the Astar 2.0 Economic model, the maximum reward per block will not exceed 215.25 (even if the staking rate increases)?
2. Has the content of the Astar 2.0 economic model been finalized in the “Astar Tokenomics-Final Report”? Will there be any subsequent changes to the key parameters?
3. When will the implementation plan and step-by-step program be announced?


I’m thinking is there a possibility to add another tier for dApp Staking? Like a tier specifc for Unstoppable Community Grant (UCG) Program that we’ve already running. From my point of view, I saw several builders that enthusiast proposing proposals to acquire UCG.

@Queena this thread to be discussed by the community like us, so I think it’s almost final (but not finalized, yet).

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Thanks for your questions:

  1. That is correct. We will not be able to mint more than 215.25.
  2. The numbers we will use are described in the first post. Those are aligned with what you can find in the final report.
  3. We already have a draft set for the timeline but it will be set in stone after one of our engineers is back from OOO. We are thinking about using Github Projects to share the complete process of implementation visible and understandable for all.
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