Introducing #Build2Earn: What is dApp Staking and Why It Matters for Web3
dApp Staking & Web3
At Astar, we are on a mission to revolutionize the internet. We envision a future where the internet is truly decentralized, and not controlled by a handful of tech giants. We believe the internet should be free and owned by the people for the people. We believe that people should have ownership of their data and assets, and not be at the mercy of intermediaries. This is the essence of the Web3 vision and what drives Astar.
What does this have to do with dApp staking? Well, to put it simply, a lot.
DApp staking is one of the catalysts that will accelerate the Web3 vision from a pipe dream to reality. For the Web3 vision to come to fruition, three important things need to occur.
- Transaction costs (i.e. gas fees) need to drop dramatically
- Blockchains need to be interoperable, interconnected, and frictionless
- Great dApps need to be built for users
At Astar Network, we are tackling these three challenges head-on.
The third point, namely — the necessity for great dApps to be built — is the driving force behind #Build2Earn (our dApp staking initiative) and the focus of this article.
What is dApp Staking?
For great dApps to be built, developers need to build them. For developers to build great dApps, they need financial incentives.
That’s where dApp staking comes in.
On the Astar/Shiden Network, dApp staking is how developers who build dApps can get compensated. By having a basic income, developers can keep building and improving their dApps.
At its core, 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 dApps they want to support.
At every block, a portion of the rewards goes to dApp staking. This reward is then divided between operators (developers) and nominators. All in all, this creates a powerful incentive for developers to build dApps on Astar/Shiden.
When building on other blockchains, dApp developers need to apply for grant programs, issue tokens and fundraise to earn money. Not only that, they often need to pay steep gas fees.
On Astar, as long as a dApp has been nominated, developers can receive a basic income. As a dApp grows in popularity, more members of the community nominate the dApp, and this, in turn, enables the developers who built the dApp to receive a greater percentage of the block reward.
Why is dApp Staking Necessary?
For Web3 to flourish, there needs to be a symbiotic relationship between dApp stakers (i.e. nominators), dApp developers, and dApp users. On Astar/Shiden, dApp staking is the mechanism that enables this mutually beneficial relationship to occur.
dApp Stakers (Nominators): Increase in Token Value & High APRs
Astar/Shiden dApp stakers (i.e. nominators) want the value of their tokens to increase but for the value of their tokens to increase, the underlying value of the asset — the Astar/Shiden Network — needs to increase.
Another way for the value of tokens to increase is if the total circulation of tokens decreases. The more tokens are staked, the fewer tokens are in circulation, and the fewer tokens are in circulation, the higher the price.
This market dynamic enables dApp stakers to get more long-term value from their tokens while earning high APRs from staking their tokens to dApps.
dApp Users: Increase in dApp & Network Utility
For users, dApp staking enables the ecosystem to grow and improve in terms of its utility. This is because better dApps are built as a result of developers having a way to earn money while building them.
Having more (and better) dApps attracts and retains more users, creating a network effect, which helps to grow the ecosystem and increases the long-term intrinsic value of the network.
Developers, developers, developers: More Developers in the Ecosystem
Ultimately, the most precious human resource in the Web3 ecosystem is developers. Before dApp staking, there were little to no financial incentives for developers to make dApps or to build infrastructure in public blockchains.
With dApp staking, developers can earn a basic income while building dApps on Astar/Shiden. Having financial incentives entices more developers to build and improve their dApps. The more developers build on our ecosystem, the better off everyone is.
Our dApp staking initiative on Astar is foundational to our #Build2Earn program and is the natural continuation of our #Stake2Earn campaign. #Build2Earn is our financial incentive program whose aim is to provide a basic income to developers for building useful dApps on Astar/Shiden.
In the coming days, we will be announcing more details about important projects being built on Astar/Shiden Network. We will also be sharing step-by-step details on how to stake your Astar/Shiden tokens so that you too can partake in dApp staking, and help build the Web3 internet of tomorrow.