
<figure class="wp-block-image"><img decoding="async" src="https://lh4.googleusercontent.com/ldTmKep0rL5zlyRQscNz8Ifo8gREz7JCGkJ7yE_eewWdoRUWXfUrAxWUgkD9EnRxGZpak3rh8IN9AF_ca3voX6AHrPvBb83eL7p8lA_HYWwPPXskJeR2XEI5upZXdn649_u1cQmv5fFgAYJgbEEn4q8" alt=""/></figure>



<h2 class="wp-block-heading">What is Astar?</h2>



<p>Sota Watanabe is the founder of Astar Network, a Layer 1 (L1) blockchain built on Polkadot that is pioneering the multi-chain future. Astar’s unique Build2Earn model empowers developers to get paid through a dApp staking mechanism for the code they write and dApps they build, creating a new way to incentivize developers. Sota is also a task force member on the Japanese government&#8217;s Trusted Web Promotion Council and is a strong proponent of Web3 adoption in Japan.</p>



<p>This week, we hosted Sota on our Staking Mondays episode and discussed how Astar is building a hub between Ethereum, Cosmos and Polkadot. Check out the full interview on our YouTube channel <a href="https://www.youtube.com/watch?v=0qi1K-mVGX0" target="_blank" rel="noreferrer noopener">here</a>. We summarized some of Sota’s “alpha drops” below:</p>



<h2 class="wp-block-heading">Key Takeaways</h2>



<ul><li>The future of the blockchain industry is multi-chain</li><li>EVM is relevant now, but the future of blockchain development will shift to WASM smart contracts.</li><li>In a multi-chain future, an application on Astar can use the TVL and community on Ethereum or other major networks and enjoy the benefits of each chain.</li><li>Astar has created a way for developers to earn a basic income from their dApp by introducing a feature called ‘dApp Staking’. dApp staking is similar to staking on validators, but in this new paradigm, dApp stakers — also known as nominators — can nominate their Astar tokens on <strong>dApps they want to support.</strong></li><li>Developers are incentivised to join the Astar ecosystem because they can earn <strong>$ASTR </strong>tokens and further fund their development. This design creates a positive feedback loop and for developers and investors alike.</li></ul>



<p></p>



<h2 class="wp-block-heading">Briefly explain the base positioning for Astar network</h2>



<p>Astar Network is making a multi-chain future a reality. The network supports the building of dApps with EVM and Web Assembly (WASM) smart contracts and offers developers true interoperability, with cross-consensus messaging (XCM) on Polkadot. The team echoes the beliefs of Gavin Wood (Polkadot founder and early Ethereum CTO) that EVM is relevant now, but that the future of blockchain development will shift to WASM smart contracts. Astar offers two key features as a layer 1 blockchain:</p>



<ul><li>EVM and WASM smart contract capability<ul><li>Javascript, Python, Rust, etc.</li></ul></li><li>dApp staking<ul><li>Basic developer income&nbsp;</li></ul></li></ul>



<p></p>



<p>Astar provides native access to the Polkadot ecosystem through its parachain slot but also bridges into other major ecosystems including Ethereum, BSC, Cosmos, Polygon, and more.</p>



<h2 class="wp-block-heading">How did Astar respond to the situation on Acala?</h2>



<p>Acala recently faced a situation where a large amount of aUSD (Their native stablecoin) was erroneously minted with a small amount of collateral. Acala had just opened the channel between interlay (iBTC) and Acala, which enabled users to start minting aUSD against their Bitcoin. A misconfiguration of the iBTC/aUSD liquidity pool (which went live that day) resulted in error mints of a significant amount of aUSD. As a parachain on the Polkadot network, Astar responded swiftly to the news by considering all options and limiting their exposure to aUSD. The team evaluated the potential risk and decided to stop importing aUSD into the ecosystem until the issue was resolved.</p>



<h2 class="wp-block-heading">What do you think the future is multi-chain?&nbsp;</h2>



<p>Looking back at the history of the internet, it was initially called the ‘intranet’ because there were isolated networks all over the world. These were essentially silos that fulfilled a specific function and never tapped into other networks. But now it is all connected and all applications run on ‘the internet’. Similarly, blockchains are currently at a similar point in history where the networks are mostly isolated and not really connected in a meaningful way. This isolates the TVL and results in communities sticking to their own chain and not really endeavoring outside of that. In a multi-chain future, an application on Astar can use the TVL and community on Ethereum or other major networks and enjoy the benefits of each chain. From a user perspective, they will be using applications that draw on services from multiple blockchains without even knowing it.&nbsp;</p>



<h2 class="wp-block-heading">How do you view competition between L1 networks on Polkadot?</h2>



<p>Moonbeam is focusing on an Ethereum-compatible L1 blockchain. It is a highly specialized Layer 1 chain that mirrors Ethereum’s Web3 RPC, accounts, keys, subscriptions, logs, and more. Astar is also EVM compatible but is focusing on building WASM use cases and growing their dApp staking offering to attract more developers. The Polkadot ecosystem is still too small to compete, teams are working and growing together to build the ecosystem. Once that is established then competitive forces will become more important.</p>



<h2 class="wp-block-heading">What effect will the Ethereum Merge have on Astar?</h2>



<p>Enjoying the full potential of the Ethereum 2.0 transition will still take years because the merge is just the beginning. A lot of people tend to ignore the steps that still need to take place after the Merge. As Ethereum and the broader crypto-economy grows, the need for multi-chain dApps will become more prevalent and strengthen the use case for Astar.</p>



<h2 class="wp-block-heading">What is dApp Staking and Why does it Matter for Web3?</h2>



<p>For the Web3 vision to come to fruition, three important things need to occur.</p>



<ol><li>Transaction costs (i.e. gas fees) need to drop dramatically</li><li>Blockchains need to be interoperable, interconnected, and frictionless</li><li>Great dApps need to be built for users</li></ol>



<p></p>



<p>At Astar Network, we are tackling these three challenges head-on. Building great dApps requires great developers  — is the driving force behind <strong>#Build2Earn</strong> (our dApp staking initiative).</p>



<h2 class="wp-block-heading">What is dApp Staking?</h2>



<p>Developers need financial incentives to build great dApps right? Astar has created a way for developers to earn a basic income from their dApp by introducing a feature called ‘dApp Staking’. dApp staking is similar to staking on validators, but in this new paradigm, dApp stakers — also known as nominators — can nominate their Astar tokens on <strong>dApps they want to support.</strong></p>



<p>At every block, a portion of the rewards goes to dApp staking. This reward is then divided between operators (developers) and nominators. All in all, this creates a powerful incentive for developers to build dApps on Astar.&nbsp;</p>



<h2 class="wp-block-heading">From an investor standpoint, why does this matter?</h2>



<p>For holders of <strong>$ASTR</strong>, this feature can have some interesting effects on price. Think of it like this:</p>



<ul><li>Stake $ASTR on favorite DApp</li><li>You earn rewards AND developers earn rewards</li><li>Developers have more resources to grow and expand their DApp</li><li>Quality and usage of DApp go up</li><li>Number goes up</li><li>You make $ and developers make $</li></ul>



<p></p>



<p>This creates a positive feedback loop where:</p>



<ul><li>More dApps get created</li><li>More <strong>$ASTR</strong> tokens get staked</li><li>This reduces the circulating supply</li><li>Demand exceeds supply</li><li>The price of <strong>$ASTR</strong> can be squeezed and go up</li></ul>



<figure class="wp-block-image"><img decoding="async" src="https://lh6.googleusercontent.com/tGKdA9pcirsyvjXxgTxCwPBIpCGOp0VgJo4ngawutGl8lnS1XYf7xD19dYM-1KUudEGkAmm2QionLVekxsixlTTnvJJhdYBZ37rVb-kXyXD36e2Lhlj3satmaZCiTGjW4eiZdgUCxn8MNXwD5yDvGhw" alt=""/></figure>



<h2 class="wp-block-heading">Numerical example</h2>



<p>Assume the following:</p>



<ul><li>$1BN valuation</li><li>10% inflation per year = $100m</li></ul>



<p></p>



<p>Now of that $100m:&nbsp;</p>



<ul><li>10% goes to collators = $10m</li><li>40% goes to treasury = $40m</li></ul>



<p></p>



<p>So we are left with $50m that can be distributed to developers and dApp stakers. This amount is split as follows:</p>



<ul><li>$10m goes to dApp stakers</li><li>$40m goes to developers based on stakers voting weight and or on-chain data</li></ul>



<p></p>



<p>As a result, more developers join the Astar ecosystem because they can earn <strong>$ASTR </strong>tokens and further fund their development. This design creates a positive feedback loop where:</p>



<ul><li>The more dApps that are created, the more tokens will be staked.</li><li>The more tokens are staked, the fewer tokens in circulation</li><li>Valuation goes up and we start this whole process again&nbsp;</li></ul>



<p></p>



<h2 class="wp-block-heading">Conclusion</h2>



<p>Astar is gaining traction in the Japanese crypto community and is steadily growing in popularity amongst the Polkadot faithful. The network supports dApps using multiple virtual machines — namely WASM and EVM — and offers the best technology solutions and financial incentives via its Build2Earn and Astar Incubation Program for Web3 developers to build on top of a secure, scalable, and interoperable blockchain.</p>


Staking Mondays Summary with Sota Watanabe from ASTAR