What is Astar? (All About Astar)
Published November 12th, 2022
Among the cryptosphere there are different cryptocurrencies and networks. People hear countless times about "Astar", what could this new cryptocurrency be about?
Astar is a decentralized parachain in the Polkadot ecosystem with impressive technology and a strong team. It has unique tokenomics and low transaction fees, incentivizing users to hold and use the ASTAR token. Astar is EVM-compatible and has cross-chain communication capabilities. The project has secured funding from reputable venture capital firms and a governance model that allows token holders to participate in decision-making processes.
Astar is a popular cryptocurrency in the Polkadot Ecosystem. This blog will explore its technology, team, funding, tokenomics, transaction fees, and decentralization.
Let’s dive right in!
Understanding the Astar Blockchain: Features and Ecosystem
Astar is a cryptocurrency native to the Astar blockchain network. The Astar blockchain is a parachain that is a part of the Polkadot network. A parachain is a sovereign blockchain made for a specific purpose which is connected to a relay chain.
Parachains have their own ecosystem and logic. The security of Parachains is handled by the relaychain validators, AKA Polkadot validators. The Relaychain is the center of Polkadot which is responsible for maintaining security and for cross-chain messaging between parachains.
Parachains can be used for public and private purposes. They can be tailored and developed for specific purposes. Parachains can also send information between each other. This is typically done with the Relaychain, which all parachains are connected to.
Astar is a parachain with smart-contract capabilities. It is devoted to interoperability between Polkadot, Ethereum and, Cosmos. It is a smart contract platform where developers can deploy their applications to take advantage of multiple virtual machines.
The Polkadot Ecosystem and Astar Network
Astar is part of the Polkadot network. Astar is maintained through special nodes called the collater nodes. This node holds the complete blockchain of Astar and the state of Astar, as well as the accounts, transactions, etc. The difference is that collater nodes don’t actually validate transactions.
The collator nodes receive transactions from the network and package them into blocks. The blocks are then sent and validated by relaychain validator nodes. The relaychain validator nodes are the same Polkadot validators. The state of the Astar network is also kept in the relaychain in the Polkadot network.
Relaychain validator nodes keep the Polkadot network running as well as the Astar network. Polkadot and Astar share the same security. Polkadot uses the Nominated Proof of Stake (NPoS) consensus to make sure that the network is secure and safe.
We can see how this works in the image below.
How Is Astar Interoperable with Other Blockchains?
Astar is interoperable with other blockchains because of 3 basic details. Firstly, Astar, being a parachain, can communicate with other parachains and with Polkadot via the relaychain that it is connected to.
Parachains such as Moonriver can send information to Astar back and forth. This is typically done using XCM, AKA Cross-consensus Message Format. Information is sent to other parachains using the relaychain as the intermediary.
Parachains cannot communicate directly. With the relaychain being the center of Polkadot, Astar can essentially communicate with Polkadot back and forth, directly.
Secondly, Astar is going to be interoperable with Cosmos. At the time of the writing of this article, a Cosmos bridge hasn’t been implemented yet. The team at Astar made a partnership with another project called Octopus Network to create an Astar and Cosmos bridge.
Cosmos currently uses the IBC protocol for inter-blockchain communication. The bridge that they are building, which is in the latest stages, is going to use the IBC ICS20 standard. This will require that Astar gets upgraded as a network.
IBC communication is the standard that Cosmos and other blockchains like it use for inter-blockchain communication.
Lastly, Astar is interoperable with Ethereum and other blockchains via smart contracts and the Ethereum virtual machine(EVM). We review this later in the EVM aspect of this article.
However, since Astar is EVM compatible, bridging from EVM compatible blockchain networks is possible via smart contracts. People can bridge assets from the Astar network to Ethereum, BSC, Polygon, Avalanche and, other networks that are also EVM compatible.
Throughput of Astar
Since Astar is a parachain in Polkadot, its throughput is determined by several factors. Astar might get a theoretical maximum throughput of 1000 transactions per Second.
Whereas Polkadot is thought to possibly handle 1,000 TPS. This number may increase with future updates to the Polkadot network.
This number may increase in the coming years. Polkadot is set to upgrade the network which may increase the transaction speeds by times. According to a recent post, the upgrade will improve Polkadot scalability, cross-chain communication as well as parachain scalability.
There isn’t a test that has been done to prove that Polkadot can handle 1,000 Transactions per second. This is only a theoretical number. As with Astar network, this is the same case.
Astar may handle fewer transactions, especially since transactions have to go through the collator nodes, and then to the relay chain validator nodes to be fully confirmed.
The Consensus Mechanism of Astar
Because Astar is a parachain, it shares the security of Polkadot. Astar doesn’t have a consensus mechanism because its security is provided by Polkadot. This is by design. Astar is dependent on the security of Polkadot.
The relaychain validators validate blocks for the Astar parachain. These validators are the validators that keep Polkadot secure.
Polkadot currently uses the Nominated Proof of Stake consensus algorithm. With this consensus algorithm, nominators back up selected validators to secure the network. Nominators can use their tokens to back up selected validators using stakes. Validators, on the other hand, are chosen to validate transactions.
Is Astar EVM compatible?
Astar is EVM compatible. EVM compatibility allows developers to launch applications as they would on Ethereum. The EVM is the virtual machine of Ethereum.
Ethereum acts as a world computer, that executes smart contracts as they are submitted. As new smart contracts are run, the machine state of Ethereum changes.
EVM compatibility also dictates how addresses are used, how data is stored on the blockchain, RPCs, and how smart contracts are executed. EVM compatibility specifies the use of the solidity programming language for smart contracts.
As such, developers on Ethereum can deploy their applications on Astar with some to no modifications to their code. This makes it easy and effective to launch applications from Ethereum to Astar. Developers from Ethereum do not have to learn a new programming language.
EVM compatibility allows Astar users to use apps like Metamask. Tokens on Ethereum can easily be bridged over to Astar, like USDC, USDT, LINK, and many more. Additionally, Astar tokens and assets can also be bridged to the Ethereum network.
This provides a sort of interoperability between Astar and Ethereum, as well as other EVM supporting blockchains. Assets from Astar can also be bridged to and from other EVM compatible blockchains such as BSC, Avalanche, Polygon, etc.
This provides a sort of interoperability between Astar and Ethereum, as well as other EVM supporting blockchains. Assets from Astar can also be bridged to and from other EVM compatible blockchains such as BSC, Avalanche, Polygon, etc.
Is Astar Decentralized?
Astar's decentralization depends on two factors. Firstly, it depends on how decentralized Polkadot is since Polkadot’s validators also validate Astar’s transactions.
Secondly, the decentralization of Astar is dependent on the number of collators on the network. Since collators create blocks for the relaychain to validate, they may censor users by not accepting certain transactions within their blocks.
Polkadot currently has about 297 validators. There are many more that are waiting for the validator status on Polkadot.
Thus, Polkadot is somewhat decentralized. At least far more than BSC since BSC has about 26 validators on the network.
Polkadot's hybrid consensus allows for blocks to be validated on a probabilistic yet finalistic method. Validators are chosen to validate blocks based off of probability, their stake, and some other factors specific to the state of the blockchain, according to the Dot development docs. Thus, assuming a validator wants to censor transactions, other validators will probably include those transactions when they are selected when the next block is produced.
Attacking the network would require millions of dollars of DOT. The last validator on the network with the least amount of bonded DOT has 1.8 million DOT that are bonded. This is equivalent to about 10 million dollars in Polkadot coins. More than this amount is required to become a validator.
Another point of centralization is when there are too few collators in the network. A collator can sensor users from submitting transactions. Astar is decentralized in that there are currently 166 collators in the network at the writing of this article. If one collator censors someone’s transaction, surely some other collator will accept it into the block that they produce.
Collators submitting fraudulent transactions isn’t really an issue since the Relaychain validators make sure that these transactions are not included in the blockchain. Additionally, anyone can run a collator.
The only requirement is a sufficiently good server and 3.2 million Astar coins, equivalent to about 150k USD at the writing of this article.
Backing Astar: Funding and Team Behind the Parachain
Astar’s parent company Stake Technologies firstly raised 10 million dollars after a few seed rounds as of June 2021. This was done in anticipation of Polkadot's parachain slot auction which would come later in the year.
Stake Technologies at this point had already launched Shiden, which is a similar project on the Kusama network. However, the company wanted to launch the Astar Network on the Polkadot network.
To do this, Astar raised 2.6 million dollars in a crowd loan. This was done to launch the project by securing a parachain slot in Polkadot. Once this happened Astar Network later tried to raise more money from venture capital firms.
Astar later launched a 22-million-dollar capital raise from multiple venture capital firms. This was done on January 28th, 2022, according to CoinDesk.
According to CoinDesk, the funds that it acquired from this raise will be used to expand the team and the project. Astar later revealed 15 more projects that were getting implemented into the Astar ecosystem.
Astar’s parent company also previously pledged 30 million dollars worth of Shiden coins to support an ecosystem fund back in September 2021. This may be much less since the value of Shiden coins has gone down dramatically.
In total, aside from the crowd loan, Astar raised a total of 35 Million dollars.
Astar Team
Astar was founded by Sota Watanabe, who graduated from Keio University with a degree in Economics. He started working on Astar in January 2019.
Astar is a Singapore-based project since this is where they are headquartered. Staking Technologies, the parent company of Astar Network is based in Singapore.
Astar Network has team members from all over the world. According to the company's LinkedIn, Astar has about 34 team members currently and varies between 11 and 50 team members.
The Unique Tokenomics of Astar
Currently, Astar has 3.7 billion coins in circulation. The current total supply is 7 billion coins. This number of coins is set to change since Astar is minted every time a block is produced. Astar has an inflationary model.
The maximum amount of Astar tokens is infinite, however, each block can only produce a set number of Astar. We cover this later in this passage.
Out of a total of 7 Billion initial token supply minted in the Astar Network, 50% goes to community and community contributions. This is a great feature of Astar since the team and investors will not be able to dump large amounts of tokens and dump the price.
Of the 50% mentioned, 20% is from the crowd loan that the community loaned to secure the parachain slot on Polkadot.
The Crowd loan was simple, users would lock-up Polkadot and get rewarded with ASTR tokens. The lock-up would help secure the parachain slot by the Astar team. The team made sure to leave extra tokens in case they have to keep the parachain slot in the future with their parachain auction reserve.
22 Million dollars that was previously raised by investors was given 10% of the supply, which is great for price support since the investors cannot easily dump the price later on in the future.
Token Inflation of Astar
As previously mentioned, Astar coins are minted as a block reward to create an incentive for people to run collator nodes. Currently, 266.4 Astar coins are created per block. The block reward is this reward plus any transaction fees from the block produced.
We have produced a table(below) to illustrate the inflation of Astar, as well as how many tokens are produced in each time frame.
| Newly Minted Astar Coins and Inflation | |
|---|---|
| Time Frame / Mechanic | Amount Minted |
| Per block (each block is created in 12 sec.) | 266.4 ASTR |
| Astar Minted In 60 seconds | 1332 ASTR |
| Astar Minted In 1 Hour | 79,920 ASTR |
| Astar Minted In 1 day | 1,918,080ASTR |
| Astar Minted In 1 week | 13,426,560 ASTR |
| Astar Minted In 1 month | 53,706,240 ASTR |
| Astar Minted In 1 year | 644,474,880 ASTR |
| Current Yearly Inflation: | 9.206% |
The block reward is composed of the 266.4 ASTR that gets minted for a block produced plus the transaction fees from those blocks. This reward then gets distributed to several parties.
The collator receives their primary incentive from a portion of the block reward. 20% of the block reward also gets burnt to create a sort of deflationary pressure. The rest goes to DAPP stakers, DAPP developers, and a treasury.
This part is variable and is dependent on the total value locked within a DApp. The TVL (Total value locked) in a DApp is composed of all the coins’ value locked without counting Astar tokens.
| Block Reward Distribution Chart (266.4 + Transaction Fees) | |
|---|---|
| Receiver | Percentage of Total Block Reward |
| Collator Node | 10% |
| On Chain Treasury | 10% Minimum |
| DApp stakers (Dependent on TVL) | 20% Minimum |
| DApp developers (Dependent on TVL) | 15% |
| Fees Burnt | 20% |
Does Astar Network Burn Coins?
The Astar network burns 20% of all of the block rewards each time a block is produced. Since each block mints 266.4 Astar tokens as a reward, at least 53.28 Astar tokens (20%) are burnt each time.
Thus, a minimum of 53.28 Astar tokens are burnt every 12 seconds. The block reward is composed of the minting reward, plus the transaction fees included in the block produced.
The number of Astar burnt will probably be a little higher than 53.28 since transaction fees are small on Astar.
Astar Use-cases and Points of Demand
Astar is the native currency of the Astar network and can be used for many things. The table below illustrates where Astar coins are used. These are also known as use-cases. They can also be points of demand. For example, people wanting to run collator nodes will have to buy 3.2 Million Astar coins.
| Astar Token Use Cases | |
|---|---|
| Use Case | Minimum Required Tokens |
| Transaction fees | - |
| Staking on DApps | 500 ASTR |
| On Chain Governance | - |
| Running a Collator node | 3,200,000 ASTR |
| Decentralized Finance Collateral | - |
| Participate in Ecosystem DApps | - |
| NFT Minting | - |
Astar is needed to pay for transaction fees. It is also used to stake and earn rewards on decentralized applications in the ecosystem. At least 500 Astar tokens are required to be able to stake and earn yields.
To run a collator node, users need 3.2 Million Astar tokens. Additionally, Astar can be used as collateral in DeFi applications to borrow and lend money. Since there are a total of 169 Collators, 540.8 Million Astar is locked by the network currently.
Low Transaction Fees of Astar
Astar has pretty low transaction fees. We performed these transaction operations to see how much each transaction costs. Many of these transactions were performed by us many times to make sure that each range was as accurate as possible.
| Astar Transaction Fees | |
|---|---|
| Action | Transaction Fee |
| Simple Astar Transfer | 0.00002 to 0.0001 ASTAR |
| Token Transfer | 0.00025 to 0.0004 ASTAR |
| Deploy a Smart Contract | 0.00069 to 0.0013 ASTAR |
| NFT Mint | 0.00036 to 0.02 ASTAR |
| DEX Token Swap | 0.001 to 0.0033 ASTAR |
Simple Astar coin transfers start at about 0.000021 ASTR per transaction fee but go up higher depending on how much gas a person wants to use. Higher gas fees are used when users want a transaction to be processed quickly.
Token transfers are higher since they have to interact with smart contracts, it can still go higher if the user wants the transfer of tokens to be quick. It is still small compared to other blockchain networks.
Deploying a smart contract is somewhat more expensive depending on the size of the smart-contract and how fast the user wants to get the transaction confirmed.
DEX swaps can vary greatly depending on how many different tokens are swapped, the routing of the transaction, and the transaction gas for quick confirmation times.
Additionally, NFT mints also vary greatly depending on how much NFTs get minted in one transaction and the properties as well as how fast the user wants to transaction to get confirmed.
Astar Network RPC
Since the Astar network is EVM compatible, users can add it to Metamask. Using the information below, users can add the Astar Network to Metamask. This is straight from the Blockscout block explorer website for Astar and can be verified by different sources.
Users can click on the bottom of the Blockscout block explorer and add the network to Metamask with their link, alternatively.
Network Name: Astar(EVM)
Network RPC URL:https://rpc.astar.network:8545/
Chain ID: 592
Currency Symbol: ASTR
Block Explorer: https://blockscout.com/astar