The $233 million market cap cryptocurrency ASTR is among the top 150 crypto assets and has rallied 23% in the past two weeks.
At the time of writing, ASTR has been trading at $0.05244, up 1.5% in the past 24 hours, while managing $10 million in volume, which is a decrease of 21.70% from a day ago.
If we look at ASTR’s 2023 journey, the token started the year around 0.0384 and rallied as much as 175% to surpass $0.105 by mid-February, only to fall even lower than the yearly open. With a drop of 65% over the next four months, ASTR’s price went down to about $0.0367, but since then, the price has been making attempts at recovery.
The price of ASTR is still up 33.3% year-to-date while only being up by merely 0.1% over the past year. The token is also down 82.53% from its all-time high of $0.42157, which it hit in mid-Jan. 2022. During the same year, ASTR also hit its all-time low of $0.032695 in Oct. 2022 and is currently up over 60% since then.
But what exactly is ASTR? It is the native token of the Astar Network, which was founded in 2019 by Sota Watanabe and was originally called Plasm Network. In June 2021, the platform rebranded itself to Astar to expand its vision.
The project has raised a total of $24.4 million in funding so far, according to Crunchbase. It is backed by some of the most prominent names in the industry, including Alchemy Ventures, Binance Labs, Coinbase Ventures, Coincheck, Crypto.com, Fenbushi Capital, Hypersphere, Hashkey Capital, LongHash Ventures, Polychain Capital, and others.
There are a total of just over 8 billion tokens, while only about 4.5 billion ASTR are circulating in the market. Most of these tokens, at 89% (3.59 billion), are currently being staked. Besides staking, the token is also used for network fees and to promote governance actions such as referendums and voting.
Initially, the project started as a layer 2 scaling solution for Polkadot, which it continues to expand upon and has become one of the leading Polkadot parachain. Now, the project aims to be the scalable decentralized blockchain for the next big Web3 innovations. It is already making significant headway here, as it is already among Japan’s most popular smart contract platforms with Ethereum Virtual Machine (EVM) and WebAssembly (WASM) compatibility. The project enables interoperability between the two using a Cross-Virtual Machine.
Web3 developers use Astar to lower costs via Plasma and zero-knowledge rollup (ZKRollup) and improve interoperability. Meanwhile, the introduction of dApp staking allows users to support projects of their choice instead of staking to secure the network.
Besides Polkadot, Astar also supports Ethereum and Cosmos and allows for the free flow of assets and communications between these ecosystems. For developers, the project has an innovative Build2Earn program that allows them to earn incentives for building decentralized apps. As part of this program, the Astar Network offers ASTR rewards through its dApp staking mechanism.
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Astar Development in 2023
One of the big developments for Astar came last week when the largest cryptocurrency exchange in the world, Binance, officially commenced operations in Japan. ASTR is one of the 34 tokens supported by Binance Japan for trading at the time of launch.
Previously known as SAKURA Exchange BitCoin, Inc. (SEBC), Binance acquired the licensed local crypto exchange service provider in November 2022 and renamed it Binance Japan.
The dedicated platform for residents in Japan will allow users to access a range of products and services, including spot trading for BTC, ETH, BNB, ASTR, DOGE, ADA, ALGO, LTC, MATIC, ATOM, SOL, AVAX, AXS, LINK, BAT, BCH, TRX, CHZ, DAI, DOT, ENJ, ETC, MKR, ONT, ZIL, SAND, SHIB, IOST, XRP, XLM, XTZ, and QTUM. Deposits are available for Japanese yen and cryptocurrencies, while withdrawals for the same will be made available after August 20.
In April, the token also got a spot on the Japan Virtual and Crypto Assets Exchange Association (JVCEA) ‘s Green List, dramatically speeding up the token listing on its 31 member exchanges. This resulted in Huobi Japan joining Bitbank and GMO Coin to list ASTR.
Meanwhile, Binance Japan offers Earn products, including Simple Earn, where users can earn daily rewards by depositing digital assets, and Auto-Invest, where users can automate crypto investments over set intervals with a predetermined amount.
“By offering regulated exchange services in Japan, we’re hoping to bolster the development of the Japanese digital-asset market. The country’s drive for technological innovation and growing interest in blockchain technology make it a fantastic place to build a robust and sustainable Web3 ecosystem,” said the exchange in a statement.
This came on the heels of the network’s integration with the digital asset management platform Fireblocks to boost secure DeFi access for over 650 banks and institutional institutions. These participants will also be able to tap into Astr’s DeFi ecosystem, which includes protocols like ArthSwap, Agem, AstridDAO, Avault, Starlay Finance, and AstrFarm to trade, swap, and lend digital assets on the platform.
“By leveraging our highly secure network and MPC-based wallet infrastructure, banks, exchanges, OTCs, and hedge funds can now seamlessly access Astar’s assets,” said Stephen Richardson, Managing Director, Financial Markets and Head of APAC at Fireblocks.
To celebrate this integration, Astar, along with Fireblocks and Bitbank, held a social event during WebX in Tokyo.
Astar has quickly become a go-to-market chain in Japan and is described by its founder and Startale CEO, Watanabe, as Japan’s “most famous layer-1 blockchain.” In an interview with Fortune a couple of months back, Watanabe revealed that they are not only working on the Astar Network but also contributing to Polkadot and are developing a project for Ethereum.
Around this time, Astar Network also announced its ‘Astar 2.0 Vision’ to drive mainstream adoption of Web3 to billions of people by shaping and improving each part of Astar 2.0, starting with developer tooling and token economics to ensure the sustainable long-term growth of the network, said Watanabe.
The ‘Astar 2.0 Vision’ outlines the project’s long-term goals and objectives by developing the network’s organizational structure and technological foundations into alignment with the network’s objective to establish itself as the go-to Layer-1 blockchain.
As part of this, Astar unveiled its Tokenomics 2.0 strategy, focusing on creating sustainable growth for ASTR. In addition to modifying the inflation rate and gas fees, a new strategy is introduced called DApp Staking Burning, under which the network plans to increase the amount burned. The project already burns 80% of transaction fees.
The new mechanism will categorize dApp staking projects into tiers based on their value to the network — and the higher the value, the greater the rewards for developers. But each grade will only have a limited number of slots which, if it doesn’t get fulfilled, their respective unused rewards will be burned. With this move, the idea is to build a thriving and sustainable future for ASTR holders, stakers, and developers.
In order to realize its 2.0 Vision, Startale Labs and the Astar Foundation have been collaborating with several big names such as Sony Network Communications and Toyota Motor Corporation.
In late June, Sony made a $3.5 million investment in the layer 1 blockchain developer Startale Labs. The Japanese juggernaut, which has its hands in consumer tech, video games, and even banking, was the only company in the round.
With this funding, Startale plans to double its number of employees to 30. As part of the investment agreement, Sony’s Jun Watanabe has joined Startale as director. This investment came at a time when the industry was facing regulatory uncertainty in the US.
“The US government is hesitant to make crypto usable. Regulation is getting tighter and tighter,” noted Sota Watanabe at the time, adding, “China, Singapore, Japan, and Korea think this is an opportunity.”
Prior to this, Sony teamed up with Astar in Feb. to launch a Web3 incubation program for NFT and DAO projects. Earlier this year, automotive giant Toyota also collaborated with Astar Network on a Web3 hackathon.
The scalable multichain network was actually awarded Product of the Year at the 4th annual Blockchain Award in Dec. 2022 by the Japan Blockchain Association, which is a group of 171 members including Microsoft, Deloitte, PwC, KPMG, GMO, EY, Toyota, and ConsenSys. At the same event, Astar’ ’s founder Watanabe also bagged the Person of the Year award for the second consecutive year.
In a study by the Japan Blockchain Association, Astar Network, and its CEO Watanabe came out as the favorites of the Japanese Web3 community. “In 2023 and beyond, we will leverage our presence in Japan to unlock opportunities for entrepreneurs, developers, and users alike,” said Watanabe.
Click here to learn all about buying Astar (ASTR).
A Look at Crypto Market
Looking beyond ASTR and into the broad crypto market, Bitcoin briefly dropped to a low of$28,724 before edging up on Tuesday to now trade at $29,485 while Ether is currently exchanging hands at $1,840. The total crypto market cap has also risen 1.3% to $1.217 trillion.
These greens came after US multinational payment giant PayPal launched a US dollar-pegged stablecoin called PayPal USD (PYUSD). The Ethereum-based stablecoin is issued by Paxos Trust Company, the U.S.-based issuer of Binance’s BUSD stablecoin, and is fully backed by US dollar deposits, short-term US treasuries, and cash equivalents.
The stablecoin project was reportedly halted earlier this year amid increased scrutiny from US regulators, including an order for Paxos to stop minting BUSD.
Meanwhile, a report by European alternative asset manager CoinShares showed that digital asset investment products recorded outflows of $107 million in total in the week ending August 4, marking the fourth consecutive week of outflows as profit-taking behavior gathers pace in recent weeks.
As per the report, Bitcoin-related products had a weekly outflow of $111 million, the largest for a week since March. However, outflows into BTC short positions stopped for the first time in the past 14 weeks, which suggests institutional investors may be adjusting their strategies.
According to a research report from Swiss-based crypto investment adviser 21e6 Capital, crypto funds adopting directional strategies have returned only an average of 22%. The company found that investors would have benefited more from buying and holding bitcoin, which gained 83% during the first half of 2023, than from investing in crypto hedge funds which only returned an average of 15% during this period.
This underperformance has led to the closure of just over 13% of crypto hedge funds out of over 700 crypto funds tracked by 21e6 Capital globally.
The ongoing price stagnation, product outflows, and negative funds performance follow a lackluster July in terms of trading activities, with Bitcoin volume decreasing by 13.1%, Ether by 21.9%, and stablecoins by 12.3%. However, this low activity, which comes after a strong uptrend in the first half of 2023, is nothing out of the ordinary for the summer months.
On the macro front, the US second-quarter reporting season saw 79% of S&P 500 companies releasing earnings higher than analyst expectations — the highest beat rate since Q3 of 2021, as per Reuters. Now, this week, investors are awaiting US consumer price index (CPI) data on Thursday.
Analysts are expecting core CPI to have the smallest monthly rise in the past two and a half years at 0.2% in July. However, the US Federal Reserve Governor Michelle Bowman said on Monday that inflation is still significantly above the FOMC’s 2% target while the labor market continues to be tight, which may still require multiple interest rate hikes.
Conclusion
With the broad crypto market experiencing a lull in activity, altcoin prices, including ASTR, could be expected to remain subdued in the short term. However, the DeFi project’s continuous developments and collaborations with giants like Sony and Binance to provide financial inclusion for everyone could help it gain traction and adoption, which can pave the way for price gains when the retail comes back, and the market-wide rally ensues.
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