dApp Staking on Astar Network
dApp staking is Astar Networkβs native mechanism to incentivize developers to build out applications on the network. It effectively allows users to stake their ASTR tokens for their favourite dApps. These dApps, then, receive ASTR tokens as rewards, which further acts as the economic incentive for them to build dApps.
With Astar dApp staking v3, users follow a two-step process where they first lock their tokens, followed by staking them on the dApp. This process unites both stakers and dApp developers, allowing the former to take calculated bets on their favourite dApps and developers.
Both users and dApps receive rewards in the form of ASTR token, the supply of which is adjusted each cycle (i.e., each year). For dApps, this functions as an economic incentive to continue to build out applications on Astar Network.
And, on the other hand, for users it also functions as an incentive to keep supporting their favourite dApps. However, since participating in dApp staking requires users to lock their ASTR tokens, this introduces opportunity costs. For however long the ASTR tokens remain locked, the capital becomes effectively unusable, leaving users with limited opportunities to acquire yield.
Neemo Finance issues a liquid staked token (LST) for this locked and staked ASTR, known as nsASTR. This makes user-staked capital highly liquid and allows them to use it in DeFi.
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