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Astar Ecosystem - A Leading Ecosystem on Polkadot

Since winning the Polkadot auction, many parachains have made the switch over to the mainnet. These ecosystems are rapidly expanding and receiving a great deal of interest from the general public as a result.
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vytran
11 min read
Published Feb 10 2022
Updated Apr 12 2024
astar ecosystem

One of the fastest growing ecosystems is the Astar Network, which has made significant progress in recent times.

In this article, I'll take you step by step through the Astar Network ecosystem and answer the following questions:

An overview analysis of the Astar ecosystem.
Analysis of each sector in the Astar ecosystem.
Prediction and investment opportunities.

Let's get started!

Astar Network Overview

Astar Network (formerly Plasm Network) is a blockchain that provides methods for developing scalable Dapps and supporting layer 2 solutions. The Polkadot Relaychain, by design, does not support smart contracts.

Therefore, Astar is a place where developers are allowed to build whatever applications on without having to consider its scalability and interoperability.

astar ecosystem
Astar Network Website: https://astar.network

Astar Network is a dApp Hub on Polkadot that supports Ethereum Virtual Machine and WebAssembly to unlock Web3 for Web2 developers.

Astar Highlights

Dapp Staking: Astar has created Dapp Staking as a reward system for dApps. dApps developers can earn income from deploying their applications on this parachain. It is similar to stake on validators, but instead of staking to validators, users can choose to nominate their Astar tokens for the project. This way, both users who stake on Dapps and developers can earn passive income from the network.
Operator Trading: This is similar to M&A. Operator Trading is a mechanism to buy & sell Astar Applications. Developers can transfer the contract ownership to others whenever they want.
Multi-Lockdrop: Lockdrop is a method for distributing tokens. Users lock tokens from other blockchains (DOT, KSM, or ETH) for a certain duration. Native tokens are then distributed to participants.

One of the most noticeable aspects of Astar is the Dapp Staking system. Other blockchains only reward validators, but Astar recognises that, in addition to validators, developers, who are also very important in contributing to the development of the ecosystem, should also be rewarded by the network.

As a result, on the Astar blockchain, Dapps developers will get 25% of the total block rewards for each token nominated by users. This means that developers will be able to run their projects without having to rely on venture capitals or selling off the tokens for money. In many ways, we can call this a Build-to-earn parachain.

Astar Highlighted Numbers

(Updated March 7, 2022)

Decimals: 18.
Holders: 86,137
Total Transactions: 1,271,008
Blocktime: 12s.
Block Height: 380,350.
Market cap: $207,000,000
Astar dApp Staking: 385,420,000.
Programming Languages: Solidity, WebAssembly,...

Roadmap & Current situation

Astar Network has come a long way and has many memorable milestones.

2019: Launched Dusty Network (testnet).
2020: Introduced Plasm Network Mainnet.
Q3 2021: Rebranded Plasm Network into Astar Network.
December 2, 2021: Astar won the 3rd auction with over 27,000 participants, contributing more than 10M DOT.
January 17, 2022: Mainnet went live on Polkadot.
February 27, 2022: Astar Network surpassed $700M in TVL.

Together with Moonbeam Network, Astar can be considered a rapidly expanding ecosystem within the Polkadot ecosystem and these two networks have the most vibrant Dapps at the time of writing.

With the advantage of being one of the first top three parachains to win the Polkadot slot auction, Astar is currently the parachain that the most crypto-enthusiastic Polkadot users think of.

And now, despite the fact that its mainnet is only a month old, this parachain is demonstrating its potential with rapid development in both horizontal and vertical directions.

Furthermore, this network announced an ecosystem development fund ($100M Astar Boost Program) to support project development on this parachain, promising more Dapps that appear to enrich the Astar ecosystem.

Investors & Partners

Astar has received seven grants from the Web3 Foundation, a non-profit organization whose mission is to help the Polkadot Ecosystem thrive. Astar was also the first project to receive funding from Binance's $10 million Polkadot Ecosystem Fund in the past.

astar ecosystem 2
Top Projects on Polkadot (Source: https://twitter.com/Coin98Analytics)

Astar raised $22 million in a strategic round led by Polychain, a top-tier crypto-focused venture capital firm, along with Alameda Research, Alchemy Ventures, Animal Ventures, Crypto.com Capital, Digital Finance Group, GSR, ROK Capital, Scytale Ventures, Vessel, Injective Protocol, and angel investors including Dr. Gavin Wood, Richard Ma, Keisuke Honda, and executives from Web3 Foundation and Parity Technologies.

astar ecosystem 3
Astar Network's Backers

After that, Coinbase Ventures joined the aforementioned $22M strategic round to become one of the industry-leading investors for Astar Network.

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Previously, Binance Labs and Fenbushi, as well as OKX Ventures and Huobi Capital, invested $10 million in Stake Technologies, the core company behind Astar Network. Most of the money raised in this round came from US investors and strategic partners, allowing Astar Network to broaden its geographic reach. Including the Coinbase Ventures investment, Astar has raised a total of $33 million to date and is now entering the next exciting phase of growth.

The Astar Ecosystem

the astar ecosystem
The Astar Ecosystem

At the moment, the Astar Network ecosystem is basically sufficient to meet the needs of basic DeFi activities such as swapping, tokens, lending, and borrowing. More advanced pieces are still being developed. The ecosystem's total TVL is currently $683 million.

And now, let's start by learning more about the Astar Network's existing pieces!

DEX

ArthSwap

ArthSwap, a forked version of Uniswap V2, is Astar's native DEX. The project has features similar to PancakeSwap, such as Swap, Liquidity Providing, Liquidity Mining, Staking, Lending, and in the future, it will develop like Trader Joe on Avalanche.

astar ecosystem 5

This project received a $1.5 million seed round investment from DFG, LongHash Ventures, and Next Web Capital and they also received support from Astar Network's $100 million ecosystem development fund.

At $108 million in TVL, this DEX is a candidate that has the highest TVL across Dapps on the Polkadot Ecosystem. For liquidity providers and early adopters, up to 35% of total ARSW token supply will be airdropped to these stakeholders.

Therefore, you can now farm on ArthSwap to get this retroactive opportunity. Farming stable coins is a good option for a safety strategy with an APR of 50-70%.

PolkaEx

PolkaEx is a cross-chain Dex and Launchpad on Polkadot. It is currently available on BNB Chain, Ethereum, Astar, Shiden, and Polygon. Although Astar has the highest concentration of liquidity in PolkaEx, Astar’s liquidity-focused TVL on this DEX is only about $357K, which is significantly lower than ArthSwap's.

astar ecosystem 6
PolkaEx's TVL (Source: Defilama)

In addition, there is also another DEX named Sirius Finance, which has a cross-chain stablecoin, AMM & LP Farming on Astar & Polkadot. However, the project is currently still in the development stage.

In conclusion, ArthSwap currently holds the top position. More features, such as staking and lending, are expected to be released in the future, promising to be a DeFi Hub for the Astar ecosystem. However, Astar's DEX sector is still in its infancy, and more DEXs are needed to lay the groundwork for the emergence of more advanced financial products such as Yield Aggregator Protocols.

Lending

Starlay Finance is currently the only native lending protocol in the system, supported by Astar Network through a 100M Astar Boost Program fund. Currently, Starlay Finance has about $59M in TVL. To date, Starlay has over $100 million in supply despite only going mainnet on March 1st. This is an impressive start to this protocol's development.

astar ecosystem 7
Starlay Finance

In general, Astar's lending segment is still in its infancy and has a long way to go. When an ecosystem wants to scale up quickly, lending activities are critical in order to improve the system's efficiency in the use of available capital resources.

I'm looking forward to the continued development of Starlay, and I anticipate that more DApps will be developed on Astar, as well as the emergence of other lending protocols.

Stablecoin

astar ecosystem 8
USDC: $54M
USDT: $24M
BUSD: $13M
DAI: $12M

Aside from these well-known stablecoins, Orcus Finance offers the oUSD stablecoin as one of its products. oUSD is a new fractional-algorithmic stable coin that will be available on Astar. Orcus will use the protocol-owned liquidity concept and will use a token model similar to Frax Finance.

In conclusion, the total amount of stablecoins is more than $100 million, which is good enough for a parachain that only launched its mainnet in mid-January of this year.

However, this figure reflects the fact that there is currently no significant cash flow and that only a small number of users (possibly investors or partners) are pouring money into the ecosystem to help it grow. This is also reflected in the small number of people who own this $100 million stablecoin.

Bridge

For the transfer of assets between Astar and other ecosystems, the cBridge is the most commonly used bridge. The Astar community can use Celer’s cBridge to transfer tokens from Ethereum, Polygon, and BNB Chain to Astar.

Furthermore, due to cBridge's unique position on Astar, nearly all money flowing into this ecosystem usually goes through cBridge. Therefore, Astar is the chain with the most TVL in cBridge ($133M), then followed by BNB Chain ($33M), Ethereum ($30M), and Avalanche ($31M).

astar ecosystem 9
cBridge's TVL (Source: Defilama)

In addition, founder of Astar Network, Sota Watanabe, has also announced that in the future, a bridge will be launched between Cosmos and Astar (Polkadot) thanks to Octopus Network.  The Octopus team will build a bridge on top of the Astar Network, allowing ALL Cosmos SDK-based blockchains, including Terra, Crypto.com chain, Osmosis, Oasis Network, Injective Protocol, and others, to interact with Astar and connect to the Polkadot ecosystem via Astar.

astar ecosystem 10
Astar's future Bridge

NFT & NFT Marketplace

NFT collectibles have started to appear on Astar Network, laying the groundwork for the first wave of NFTs to appear on this parachain. Some of the NFTs are simply forks of projects such as Bored Apes, Punks, Bots, and so on.

This is a common occurrence in new ecosystems because creating these types of collectibles is much easier than creating Dapps, and the ROI for builders or flippers of these projects is extremely high.

Infrastructure

The Astar Network ecosystem's infrastructure projects include:

Oracle: Chainlink, DIA has been integrated to Astar Network.
Explorer: Subscan & Blockscout. These two explorers have aided users in easily tracking transactions and information. Users can also view charts that display information such as total wallet addresses, total transaction fees, and so on.
Wallet: The most popular wallets in this ecosystem are Polkadot.js and Metamask. Users from the EVM chain, on the other hand, will prefer Metamask to interact with Dapps on Astar.
Other tools: The Graph and SubQuery will serve as the integration with data indexing solutions. Covalent will support the Indexing API.

Infrastructure for the Astar Network is now complete and ready for use. EVM-compatible chains like the Astar Network allow for easy integration of Ethereum's tools and infrastructure.

Furthermore, because Astar Network is an infrastructure parachain, I believe this sector of the Astar network is obviously well-established.

Investment Opportunities with Astar Ecosystem

Token Investment

astar ecosystem 11
Source: Defilama

Astar's ecosystem is still in its infancy, and there will be a slew of critical components appearing on this parachain in the near future. This is just the beginning. As a result, the TVL cannot simply stop at this point because the missing sectors have not yet appeared.

astar ecosystem 12
Polkadot Crowdloans Rewards Rating (Source: Parachains.info)

Those who choose to lock DOTs into the Astar Network crowdloan at the time of Polkadot's auction batch 1 will receive the highest rewards, with a ROI of $10.75 per DOT, followed by Moonbeam ($10.6), Clover ($6.5), and finally Acala ($5.3)

Astar's contributors have had good ROI when choosing this parachain, but through this outcome, it can be seen that now is no longer the best time for newcomers to buy new ASTR coins because we are in a different position than those who are receiving a free ASTR (contributors).

Skin in the game & Retroactive Opportunities

Astar is a parachain that has only been on the mainnet for almost two months, so there are still plenty of opportunities for you to participate in this new ecosystem.

Currently, the yield on ArthSwap and Starlay is no longer attractive because a large amount of money has been poured into these two protocols before. Therefore, what we should expect now is the emergence of other protocols in the same sectors to enrich the ecosystem.

Only when multiple DEXs and lending protocols compete in an ecosystem will users benefit from the abundant yield offered by the competition between protocols. Furthermore, when a new project is released, you may be able to benefit retroactively from being early adopters/users or having skin in the game by participating in a testnet and providing feedback to the project. If you truly help the project develop, I believe your efforts will be rewarded.

Another potential area is Launchpad, but we have yet to see Launchpad's presence in this ecosystem. Therefore, when the first Launchpad appears on Astar in the future, you can also hold a small number of Launchpad tokens in order to participate in IDO rounds and earn high ROI.

You should keep in mind, however, that not all launchpads perform well. We all have seen many projects that completed IDO and immediately gave a negative ROI to investors. Therefore, I advise you to conduct thorough research about that project before making any decision.

NFT

In the Astar NFT market, there hasn't been a single innovation. Investing in NFT collectibles requires extreme caution because the risk of burying capital is very high if the cash flow is not yet poured into this ecosystem. Only when the NFT market thrives and the ecosystem gains traction should you invest in this sector.

Astar Ecosystem Predictions

Astar is one of the fastest growing parachains. As of February 23rd, Astar's TVL had surpassed $700 million, making it the highest TVL in the Polkadot ecosystem and dominating 42.4% of the total TVL of all Polkadot parachains. This proves that while being only the third winner in the Polkadot auction, Astar has risen to the top of the rankings, even surpassing Acala and Moonbeam.

If Astar keeps growing at this current rate, the ecosystem will continue to flourish, especially with the help of the closest investor, Coinbase Venture.

In addition, you should also pay close attention to the possibility of token listing on Coinbase and Binance exchange in the near future ((Binance Labs invested in Astar previously).

This ecosystem will continue to see an influx of new Dapps emerge. Some Dapps may be brand new, while others from other EVM chains may be ported over to Astar.

It is likely that we will see more new faces in the DEX, Lending, or more advanced sectors such as Algorithmic Stable-Coins, Yield Aggregators, Derivatives, Options, Predictions, etc. And if you follow and pay close attention to this ecosystem, you'll notice that there are numerous ways to make money from these missing pieces

Conclusion

Here are a few of my quick summaries:

Astar Network is a dApp hub on Polkadot that supports Ethereum Virtual Machine and WebAssembly to unlock Web3 for Web2 developers.
Astar is an ecosystem that moves at a fast pace on Polkadot. This is reflected in the TVL of the entire ecosystem, as well as through ArthSwap and Starlay.
The fundamental DeFi projects on Astar are DEX and Lending are already available but not yet abundant in terms of DApps. I'm looking forward to seeing the plethora of different new protocols appearing in the future.
You should look for retroactive opportunities from the ecosystem's missing pieces, especially in this relatively new ecosystem. It could come from new Dapps on the DEX or Lending sector, or in brand new sectors in this ecosystem such as yield staking, launchpad, derivatives, and so on.

What are your thoughts on the Astar ecosystem? Please leave a comment below to further discuss with Coin98 Insights!

Disclaimer: The information in this article is provided solely for informational purposes and should NOT be considered as investment advice. Investing in cryptocurrencies involves a high level of risk, and you should only invest what you are willing to lose.