Astar Network Reduces Staking Rewards to Combat Token Inflation

Astar Network has made changes to its tokenomics structure to reduce inflationary pressures within its ecosystem. The blockchain firm announced on April 18 that it had cut base staking rewards from 25% to 10%, a measure aimed at controlling token inflation.

The company stated that this adjustment promotes a more stable annual percentage rate for users as staking approaches what they consider a more ideal ratio. According to Astar Network, this ensures rewards "remain meaningful" without causing excessive inflation.

"This change lowers automatic token issuance, reducing overall inflationary pressure while maintaining strong incentives for users to stake their ASTR," the company explained in its announcement.

Unlike Bitcoin with its fixed total supply, ASTR operates on a dynamic inflation model without a maximum token supply cap. As the blockchain functions, it generates more tokens, continuously increasing the available supply, which can create downward price pressure if demand doesn't keep pace.

Beyond lowering staking rewards, Astar has begun routing token emissions into a parameter governing total value locked-based rewards like decentralized application staking. This change aims to make DApp staking APRs "more predictable" over time, providing stability to those who stake their tokens.

The network also established a new minimum token emission threshold of 2.5%, ensuring emissions don't fall below what Astar considers a sustainable baseline. Continued transaction fee burning will also contribute to reward predictability, according to the company.

These tokenomics adjustments come amid broader fluctuations in staking protocols. Just a day earlier, Bitcoin staking protocol Babylon saw $1.26 billion worth of Bitcoin unstaked, causing its TVL to drop by 32% from $3.97 billion to $2.68 billion, according to DefiLlama.

These changes have already reduced Astar's annual inflation rate from 4.86% to 4.32%, according to the firm. The total ASTR tokens emitted per block decreased from 153.95 to 136.67, cutting estimated annual emissions by 11%, from 405 million to 360 million tokens.

The inflation control measures come shortly after ASTR reached a new all-time low. Data from CoinGecko shows the token dropped to $0.02 on April 7, representing a 93.8% decline from its peak of $0.42 in January 2022.

ASTR had previously rallied with the broader market in December 2024, reaching $0.09, but has since declined steadily before hitting its new record low in early April.