Astar: A Star Also The Star to Shine in Web3

DFG Official
13 min readMar 9, 2023

PART 1 - Sony Pursues New Prospects in Web3 with Astar Network

Despite the setbacks that the cryptocurrency ecosystem suffered in 2022, Astar Network, a multi-chain smart contract platform, has been making frequent positive news, leading the way in bringing traditional large enterprises into the world of cryptocurrency and Web3. Following a hackathon event held in collaboration with the Japanese automotive giant Toyota in early February, Astar announced a new partnership with Sony Network Communications,Inc., an operating company of the Sony Group, on February 17.

Specifically, Astar and Sony Network Communications have jointly launched a three-month Web3 incubation program aimed at nurturing cutting-edge Web3 use cases that focus on the practicality of NFTs and DAOs. According to Astar officials, the Incubation Programme has received more than 150 registrations in half a month since it began accepting applications on 17 February.

This partnership with the giant corporation once again makes Astar Network a focal point of market attention. Astar Network (formerly Plasm Network) is a Polkadot dApp center from Japan, supporting the construction of interoperable dApps using EVM and WASM smart contracts. In the Web3 Incubation Program, Astar will provide technical support and consulting services in product development and strategic development to the teams participating in the incubation program based on its years of experience in blockchain and dApp development. Startale Labs, a Singaporean company founded by Astar’s CEO Sota Watanabe, will be responsible for organizing and executing the entire incubation program.

Astar Network’s “Asia Strategy” has brought fruitful results to this Polkadot parachain. Since the mainnet launch in January 2022, Astar has established partnerships with Japan’s three major companies, including NTT Docomo (Largest mobile operator in Japan), Toyota and Sony.

PART 2 - Forest Web3 Innovation Leadership in Japan

Astar aims to become a blockchain backed by all industries in Japan. In fact,Astar is already a leading and popular Layer1 blockchain in Japan and has made impressive progress in driving the adoption of Web3 in Japan. The Japanese government, enterprises and Web3 entities are all actively exploring with Astar. Good government and media relations have also helped Astar to make a good pavement for business expansion in Japan.

Ambitious Astar Japan Lab

Back to last June, the Astar team established the Astar Japan Lab, which fuels the growth of Web3 services and business in Japan by conducting research and development, gathering knowledge, and collaborating with exciting and established companies. To date, nearly 100 Japanese companies/organizations have joined the Astar Japan Lab program, not only including major companies like Dentsu (a Japanese multinational advertising agency), HAKUHODO (the 2nd largest advertising and communications group in Japan), SoftBank, PWC, Accenture, but also Matcha NFT, Crypto lab, BOBG, AstarGames, double jump and other emerging crypto projects. Government departments such as Fukuoka City and Sendai City Hall also joined in.

Fig1. Mapping of Registered Members in Astar Japan Lab / Source: Astar Website, DFG

Gain Recognition in Japan

Astar has deep ties to Japan, with Founder and CEO Sota Watanabe coming from Japan, where he was a task force member of the Trusted Web Council led by the Cabinet Secretariat of the Japanese government and a blockchain researcher at the University of Tokyo, Japan. In 2022, Sota was selected as one of Forbes’ 30 under 30 Asia and appeared on the cover of Forbes Japan. Astar, led by Sota, was named “Product of the Year 2022” at the 4th Annual Blockchain Awards by the Japan Blockchain Association and “One of the 100 Most Promising Japanese Companies for 2023” by Nikkei Shimbun, Japan’s largest business media.

After Japan government made Web3 a part of its national strategy, Astar became one of the groups working most closely with the government to accelerate Web3 innovation. Fukuoka City, Sendai City, and Shibuya Ward (one of the special wards in Tokyo, Japan) have all joined the Astar Japan Lab to promote Web3 adoption. The Japanese mainstream media has also given Astar more exposure. In September 2022, Astar placed a full-page ad in the Nikkei Shimbun to promote Web3 innovation, attracting 329 Japanese blue-chip companies, including the largest banks, well-known Internet companies, and branches of foreign companies such as Microsoft and Accenture. Good government and media relations have greatly helped Astar’s Web3 business growth in Japan.

PART 3 - A Leading Parachain in Polkadot Ecosystem

Astar Network is not only a leading blockchain in Japan, but also one of the most popular parachains on Polkadot. Compared to most other chains that aim to create EVM compatibility environment, Astar’s goals seem even more ambitious: It aims to build an ecosystem that supports both WASM and EVM and interacts with many other mainstream chain ecosystems such as Ethereum, BSC, Cosmos, Polygon, etc., thereby becoming the central hub of dApps in a multi-chain ecosystem.

Fig2. Astar as a Multi-Chain dApp Hub

Outstanding Core Metrics

As one of the first winners of the parachain auctions, Astar was an early adopter of the Polkadot mainnet and rapidly developed into a leading parachain in the Polkadot ecosystem. As of now, the total TVL in the Astar Network exceeds $300 million (according to official website data), with approximately $220 million locked in dApp staking, and around $80 million TVL in the EVM ecosystem. Astar Network has generated over 60.2 million EVM transactions, with over 150,000 EVM accounts and approximately 490,000 $ASTR token holders. In terms of cross-chain communication, Astar has opened 19 XCM channels with 10 parachains (including Moonbeam, Acala, Interlay, Equilibrium, etc.), sent out 1341 cross-chain messages, and received 6545 cross-chain messages.

Fig3. Core Metrics of Astar Network / Source: Astar Website & Subscan

Competitive Among Top Parachains

Astar is leading in many aspects such as Transaction Volume and XCM Activity, becoming one of the most active parachains in the Polkadot ecosystem. The outstanding performance of Astar products is also reflected in the secondary market, with $ASTR price pumping around 67% in the past 30 days, far outpacing the 12% and 5% increases of $BTC and $ETH during the same period. In addition, Astar’s TVL (Data from official website, including token staking) ranks 1st in the Polkadot ecosystem, proving the network’s strong ability to attract funds.

Fig4. Key Metrics of Top Parachains / Source: Subscan, DeFiLlama & CoinGecko

Note: Data as of Mar. 7th, 2023; TVL with native token staking included.

PART 4 - Key Visions & Innovations

Astar strives to create a smart contract environment that supports both WASM and EVM and become a central hub for multi-chain ecosystem dApp. To achieve this ambitious goal, Astar proposed to build a WASM smart contract ecosystem and developed cross-virtual machine technology (XVM), which can provide technical guarantee for developers to deploy WASM smart contracts. On this basis, the Build2Earn model motivates developers to settle into the Astar ecosystem by deploying contracts on Astar and getting rewards. This model of technical guarantees and incentive mechanism provides a competitive advantage for Astar to aggregate excellent projects in its ecosystem.

WASM: Faster Execution, More Flexible and Safer

WASM (WebAssembly) is a new type of smart contract that offers several advantages over traditional smart contracts written in languages such as Solidity. Compared to Solidity, WASM smart contracts offer:

1. Higher performance via faster execution speed;

2. Greater flexibility by supporting for multiple programming languages such as C, C++, and Rust;

3. Improved security because WASM code is compiled to machine code and is less prone to vulnerabilities;

4. And better error handling mechanisms.

Fig5. WASM Brings More Powerful and Compatible Features Against EVM / Source: Polkaverse

Astar aims to leverage the advantages of WASM to promote its application and create a more inclusive, scalable, and high-performing ecosystem. The Astar WASM technology stack already includes several developer tools such as Swanky Suite (an all-in-one WASM smart contract development tool) and Ink! Development, which can help developers to improve the efficiency of developing and deploying contracts and to remove obstacles to the adoption of WASM smart contracts.

The benefits of the WASM smart contract ecosystem Astar building go beyond these advantages. Since Astar supports both the EVM and WASM virtual machines, WASM smart contracts deployed on Astar can benefit from liquidity in the WASM ecosystem, as well as additional liquidity from the Substrate-pallet asset level and the EVM ecosystem, providing more choices and development space for applications deployed on Astar.

Astar places great importance on the development of the WASM smart contract ecosystem, with plans to invest heavily in WASM development in their 2023 strategic plan and working with partners such as Parity and other parallel chains to develop a financial proposal for WASM. Astar hopes to secure $5 million in funding to support the development of WASM smart contracts.

Fig6. Liquidity Aggregation from EVM Contracts and Pallet Assets to WASM / Source: Astar Medium

XVM: Enable Heterogeneous Multi-chain Interoperability

In January, Astar launched XVM on Shibuya, which is Astar’s public test network developed specifically for dApps. The development of XVM is the first step on Astar’s roadmap for 2023 and a key initiative for Astar to build a cross-chain interoperable ecosystem.

XVM, proposed by the Astar team, is essentially a custom pallet and a set of interfaces that allow a smart contract in one virtual machine to communicate with another as if they are in the same environment. In short, XVM will offer developers the freedom and flexibility to create without smart contracts limitation. For example, developers can already make bi-directional calls between EVM and WASM smart contracts on the XVM testnet.

In addition, Astar is developing version 3 of XVM, which is planned to include new features such as the ability to read smart contract storage values and improve error messages. In the future, XVM will also be integrated with XCMP and more virtual machines will be added to enable cross-virtual-machine calls to information in any ecosystem application, achieving true cross-chain and cross-virtual-machine interoperability.

Fig7. XVM Architecture / Source: Twitter @PolkadotInsider

dApp Staking: Sustainable and Effective Incentives for Developers

When developing and deploying smart contracts on other chains, it is often necessary to raise startup capital through funding programs, token issuance, and other means. Astar has pioneered the dApp Staking mechanism, also known as “Build2Earn”, which allows developers to earn rewards while building dApps, enabling them to focus primarily on technology and product development.

The mechanism of dApp Staking is similar to staking on validators, but in this new paradigm, dApp stakers (also known as nominators) can nominate their Astar/Shiden tokens on the dApps they wish to support. A portion of the token rewards in each block in the Astar/Shiden network will be allocated to dApp Staking, which will be further distributed between developers and stakers. In this way, the interests of token stakers, developers, and other stakeholders in the network are bound together, forming a pattern of a community of shared interests in the Astar ecosystem, promoting its sustainable development.

Currently, the TVL of dApp Staking in the Astar network is about $220 million, with 32 projects participating in dApp Staking, over 190,000 stakers, a staker APR of 10.9%, and developers receiving rewards of 287,711 ASTR per era (approximately 1 day).

Fig8. dApp Staking Data/ Source: Astar Website

The dApp Staking mechanism is constantly being improved, and the recently proposed dApp Staking v3 version separates the staking and nomination processes (which were combined in the V2 version), introduces a staking yield calculation mechanism based on dApp rank, and a tracking rewards mechanism, and introduces a voting period and construction & revenue earning period. These improvements and new staking mechanisms in dApp Staking v3 make staking reward distribution fairer and reasonable, and significantly increase the incentive efficiency for ecosystem developers.

PART 5 -Varied and Vibrant Ecosystem

Fig9. Mapping of Astar Ecosystem / Source: Astar website, DFG

Rapid Expansion

With the continuous improvement of Astar’s technology and the expansion of its cooperation with Japanese partners, Astar’s ecosystem is rapidly developing: The number of its ecosystem projects has grown from over 40 more than a year ago to nearly 200 at present, mainly including crypto projects and traditional projects.

Crypto projects cover most crypto market segments, such as DeFi, infrastructure, tools, NFT, cross-chain bridges, wallets, etc., including not only big projects in the Polkadot ecosystem, but also cross-ecology projects such as Ethereum and Cosmos;

Traditional projects include many large Japanese companies in traditional fields, including NTT Docomo, Microsoft, PWC, Mitsubishi, Hakuhodo, Amazon, SMBC Nikko (a well-known Japanese securities company) and other big global companies, not to mention Sony and Toyota. In the latest disclosed partnership with Sony on Feb 17th, Astar and Sony Network Communications launched a 3-month Web3 Incubation Program aimed at nurturing Web3 projects by leveraging the experience, technology and resources of both companies.

All these well-known enterprises are bound to drive the expansion of Astar’s ecosystem.

In addition, Astar’s investors include well-known institutions such as Binance, Polychain, Coinbase, and DFG.

Star Projects on Astar

The leading DeFi projects on Astar have performed well in terms of TVL numbers so far this year. Algem, currently ranked top 1 in terms of TVL, is a liquidity pledge project that has seen its TVL rise by over 80%. The project has also released the Algemantis Nautilus Pass NFT, which grants users the ability to grow their pledge rewards, cut part of their business fees and other entitlements, and Algem innovatively combines NFTs with staking business, forming a model where the two businesses promote each other.

ArthSwap, the largest DEX on Astar, also saw its TVL rise by nearly 50% so far this year, and ArthSwap has recently announced the use of Ink! and Swanky Suite for WASM DEX development on Astar. In addition, DeFi projects such as the stablecoin project AstridDAO, the income aggregator Avault and the lending project SiO2 Finance on the Astar ecosystem all have their own business innovations, with SiO2 Finance’s TVL up over 100% so far this year.

Fig10.TVL Changes of Leading DeFi Projects on Astar / Data Source: DeFiLlama

On the other hand, some innovative projects have emerged in the NFT ecosystem on Astar, such as the ASTAR DEGENS DAO community with thousands of members. The Astar Degens NFTs issued by the community have generated a trading volume of 10.41million $ASTR, with a current floor price of 1800 $ASTR. In addition, the NFT collection Candy Girl by the world-famous artist Yoshitaka Amano has 421 items on the secondary market, with a total transaction volume of 3.61 million $ASTR.

PART 6 - Ambitious Starmap for 2023

Astar seeks to achieve massive growth in 2023, thereby becoming recognized as the emerging Layer-1 blockchain of the entire blockchain ecosystem. This will be achieved by focusing on two areas: 1) the continued development of WebAssembly and 2) the mass adoption in Japan.

Astar has released a roadmap called “Starmap” based on its overall strategy for 2023, making 2023 as “The Year of Andromeda”, implying that Astar is eager to complete many significant objects in Starmap in 2023, just as the Andromeda containing many celestial objects of great size and significance. In addition, Starmap names the four quarters of 2023 after different “nebulae” (areas where stars are formed from floating stardust), each of which is a major glowing point, meaning that new products/features will be released in the new quarters. The specific plan is as follows:

Fig11. Astar 2023 Starmap / Source: Astar Website, DFG

Q1 — The Reborn Nebula: The task of this quarter is to upgrade the overall performance of Astar Network, including the introduction of cross-virtual machines (XVM) that enable bi-directional calls between EVM and WASM, the construction of a peer-to-peer RPC node network Mesh, and the implementation of dApp presentations, and upgrading dApp staking.

Q2 — The Growth Nebula: Continue to focus on development and innovation, with a focus on the Swanky Suite, an all-in-one tool for WASM developers.

Q3 — The Expansion Nebula: Improve the developer and user experience by creating high-quality projects and tools, including Astar SDK and developer tool improvements.

Q4 — The Shine Nebula: Achieve milestone results and look forward to 2024.

PART 7 - The Summary

Looking back the history, Astar has always maintained a fast-paced development and achieved impressive results in various aspects as one of the first batch of Polkadot live parachains. Astar was funded tens of millions of dollars by great institutions such as DFG, Coinbase, and Polychain early on. After accessing the Polkadot mainnet, its network adoption rate has always been at the forefront of the Polkadot ecosystem.

● Technical innovation: Astar proposed the innovative idea of building a WASM ecosystem and developing XVM and other technologies.

● Ecological development; Astar has already created a large ecological map, and its pioneering Building2Earn incentive mechanism has attracted many developers.

● Innovative Applications: Astar actively explores the application of its products in traditional fields, and has now cooperated with more than 90 traditional well-known enterprises. The various dApps on Astar will attract people’s attention to the Polkadot ecosystem and the entire blockchain industry.

Now, Astar ambitiously proposed a market growth strategy for 2023 with its amazing Starmap. As an early investor and long-term supporter of Astar, DFG fully agrees with this strategic thinking of combining WASM technology development/application and Japanese market development. Because of this internal and external combination, the jointly developed strategy is extremely smart:

● In terms of internal development, Astar can upgrade its technology such as WASM, XVM, and tools such as Swanky Suite to improve user and developer experience and achieve the goal of improving its own products;

● In terms of external expansion, Astar relies on its cooperation resources with well-known enterprises in Japan to promote products and accelerate the landing of Web3 applications.

DFG believes that under this systematic development strategy, 2023 will be a fruitful year for Astar, unleashing even greater development potential.

About DFG

DFG is a global investment firm with more than $1B in AUM focused on empowering blockchain and Web3 companies. DFG’s portfolio has included equity holdings in Circle, Coinlist, Amber Group, FV Bank, ChainSafe, and Bloq among others. In addition, DFG is an early investor in new and emerging protocols and projects, including Polkadot, Kusama, Avalanche, Solana, Near, and Shardeum, among others.

Recently, DFG has become a leading and active member of the Polkadot ecosystem, which includes partnerships with and investments in projects such as Astar, Acala Network, Moonbeam, Efinity, HydraDX, Interlay, Ternoa, Bit.Country and many more.

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