Polkadot is a multi-chain protocol that connects and secures a network of specialised blockchains. It facilitates cross-chain engagement and allows blockchains to interact with one another. It is a base for what we now know as Web 3.
Creating a blockchain from scratch and securing it is one of the toughest jobs in crypto. But Polkadot has the answer to this pain point: build your own L1 and benefit from a shared security system.
Polkadot is essentially saying: if you want to build an L1 and start a new ecosystem, you can build it on Polkadot. The unique ecosystems built on Polkadot are known as parachains.
In late 2021 we executed our Gigabrain series all around the Polkadot parachains. In the series, we broke down what they were, which ones we thought would win, and the fundamentals of those projects.
One of those projects was Astar Network. For our detailed breakdown of Astar Network, check out our full report here. For a light read that discusses the basics of Astar Network in a few minutes, settle into this Simply Explained.
So what is Astar Network?
Astar Network is a layer 1 blockchain where developers can build applications using various programming languages. The cool part is that apps developed in these different languages will be interoperable with each other and the whole Polkadot ecosystem. Astar is attempting to act as the bridge between the different development hubs we have in crypto.
To understand how this works, you need to understand what a virtual machine (VM) is. Think of it as an on-chain computer. It works the same way as a computer, but as it’s not physical, a single server can host multiple computers. Virtual machines are like their own operating systems. For example, one VM could use macOS, the other Windows.
Astar has a virtual machine called X-VM, which allows both the Ethereum Virtual Machine and the Web Assembly Virtual Machine to work with one another. This enables apps built in different languages to work together.
Aside from cross-chain compatibility, the second biggest innovation Astar Network brings to the table is its dApp Staking.
How does Astar Network encourage developers to build on its platform? The same way many blockchains do- through an extensive incentives program.
On the Astar Network, users can delegate their tokens to developers, and both parties earn rewards. A developer delegated lots of tokens is highly rewarded and encouraged to continue building in their direction.
This approach does a few things. First, it encourages developers to flock to the Astar Network to develop, and then these developers are encouraged to compete to earn the biggest share of delegated tokens.
Secondly, many ASTR tokens are locked up, which is typically great for a token price. More scarcity equals a higher price.
What are the Tokenomics of ASTR?
Firstly, what does the ASTR token do? You can think of ASTR like ETH to Ethereum. It’s the fuel that powers the engine.
It’s a utility token with governance capabilities, meaning users can govern the network by voting. Users stake the token to secure the network (Astar uses a nominated proof of stake consensus mechanism).
For a breakdown of the allocation of tokens, please check out our Gigabrain premium report!
There is no argument that Astar Network isn’t an innovative project. We have covered the project multiple times now, and we hope after reading this Simply Explained, you are inclined to read more about what we think of ASTR, how and if we have invested in the project, and what our forecasts are for its future.
Disclaimer: THIS IS NOT FINANCIAL OR INVESTMENT ADVICE. Only you are responsible for any capital-related decisions you make and only you are accountable for the results.