Proposal - burn mechanism on transaction fees similar to Shiden Network, and quarterly burn events to reduce inflation on the ASTR token

Astar Initiatives
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Hello everyone, my name is Enrico Toscano and I am an Italian crypto investor. For the past year I have been actively following the Astar Network and Shiden Network project.

I saw that a similar proposal has already been approved for Shiden Network and therefore I would like to make a similar one for Astar Network as well.

Given that the whole community is very concerned about the excessive inflation of the ASTR token, and its uncapped supply, I thought of making this proposal at least to bring to the attention of Team what are the community issues related to Astar Network and ASTR token.

Given that it is more than understandable that tokenomics has a scheme that is able to repay developers to incentivize them to use Astar Network, at the same time this system has been set up only for the benefit of developers, in fact too much inflation on the token does nothing else than harm investors.

What is my proposal is to adopt a burn mechanism similar to that of Shiden Network, and it is 20% of transaction fee tokens must be burned to create deflationary force, even if the ideal would be 50% (think that Moonbeam does it at 80%).

In addition to a transaction fee burn, I propose to institute additional quarterly burn events.

The tokenomics that helps programmers must not change, as it helps the growth of Astar Network, but the project must also keep in mind that we must give the token a value that also incentives investors as well as programmers.

It would be also good to put a fixed max supply.

Let me know your opinion.

Obviously I want to clarify that this proposal is made only for the growth of Astar Network and not for mere profit or personal speculation, because as I said the tokenomics that helps developers is fine, but if it helps ONLY developers and damages investors turns into a damage for Astar Network, as no one will be incentivized to invest in the token, as programmers to hedge against the risk will go to sell the ASTR token creating strong selling pressure, which combined with inflation will just make plummet the value of the token.

Thanks,

Enrico Toscano

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We appreciate your concern.

Having the gas fee burn mechanism on Astar is in the plan. We will make this soon.

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I agree with you @Tosco72
The gas fee burning mechanism should be available on Astar asap, our runtime devs will create the PR this week.

We have done a burning event before on Astar, but we would like to do those more often when we have governance set on Astar so our community can decide on the burning.

You bring up valid points in your proposal. Hope others will join the discussion.

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I totally agree with you. In fact, the tokenomics that benefits developers is excellent but must also take into account the investors, as it is precisely these last ones that are damaged by too much token inflation, and therefore this in the long run will lead them to stay away from the project.

I agree to burn 20-30% of transaction fees, as I also agree to do quarterly burn events in addition to the transaction fee burn, so as to give a powerful deflationary force that helps both developers and incentives to investors, so that the ASTR token can acquire intrinsic and fundamental value in the long term. I rightly add, with a burn mechanism like this, developers would also indirectly benefit from it as with a burn mechanism it is easier to scale for the ASTR token, and therefore also for developers it does not become just a utility token but a store of value that in fact it is appreciated over time both for technical factors and for fundamental factors linked to the entire ecosystem of Astar Network.

As for the fixed max supply, I think it is enough just to leave the current circulating as it is, therefore three and a half billion and no more, then after the release period, through combined burn mechanisms reduce the total supply, so through deflationary force always stay on three and a half billion tokens and no more. Of course at an official level it would be nice to see a defined fixed max supply.

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I did a voting survey on twitter too
thank you for making this proposal, i totally agree that astar really needs burn tokens, i’m an astar investor since crowdloan… good luck for astar you never walk alone :blush:

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Great proposal, I think that will definitely bring win win situation for both devs & investors. Thank you!

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I think this is a great proposal @Tosco72. I have also been thinking of this for a long time. At this moment, our transaction fee is very small and the burning tx fee may make a huge difference. Having the maximum token supply is something we should consider so that we can incentivize projects to join our ecosystem earlier. And, considering that other L1s don’t have this mechanism, dApps will be deployed on Astar once Astar has big network effects without dApp staking in the long run.

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Very much agree that the destruction plan should be implemented immediately。ASTR在中国也非常有潜力。

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Have devs already created the PR?

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Thank you very much Sota, I am very glad you enjoyed my proposal.

In fact I have seen that it is supported by many users. I personally think that the unique characteristics of Astar Network must be preserved and indeed supported and encouraged. It will certainly be essential to encourage as many developers as possible to develop on Astar Network. Obviously, however, as I mentioned above, you have to do as the philosopher Aristotle, that is to find the right middle ground, as today Astar Network has immense potential but which risks being nullified by the fact that from the outside it can seem a system in which only the developers are earning and the token itself has only a useful end in itself but which does not have an intrinsic principle that helps it to grow over time.

On the other hand, a mixed burn mechanism, therefore that unites several mechanisms, precisely the burn of 30-40% of transaction fees plus quarterly burn events such as tokens in treasury, helps to create that deflationary force that gives value in the long term to the token, incentives investors to invest in Astar Network, and also helps developers who find themselves in their hands not only a utility token but a store of value belonging to the future largest Japanese blockchain reality. This is giving value. On an equal footing I think that officially recognizing a fixed max supply will help a lot, as keep in mind that many institutional and large retailers invest in crypto also with a view to sheltering from inflation, if then they find a token that inflates even more than traditional market, they will certainly stay away from it.

Anyway I think a good fixed max supply must be minus than actual total one at date, I think around 3-4 billion and no more. Keep in mind that the most important L1 are all around 500m-1B on fixed max supply.

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I agree with this proposal. I think it is right to put two burn mechanisms together to give the right deflationary force.

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Yes it is:

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Closing this thread.
Currently, we are doing test cases on Shiden to make sure we launch the best burning mechanism on Astar in 2023.

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