nASTR is a Liquid Staking Derivatives (LSD) token derived from Algem's Liquid dApp Staking mechanism. nASTR allows users to stay liquid with their ASTR tokens and earn additional rewards across Astar Network's Defi ecosystem.
nASTR tokens are a liquid representation of ASTR tokens and are guaranteed by a 1:1 ratio. Each time a user deposits or stakes ASTR via the liquid staking solution, the Algem protocol mints an equal amount of nASTR tokens.
These tokens represent the user's share and rights to claim the underlying tokens.
Users can use nASTR in Algem's Liquidity Hub on partner dApps (for staking, lending/borrowing, LP, etc.)
The ASTR:nASTR pair on DEX aims to stay equal, but the market may decide otherwise. However, to keep the ratio as close to 1:1 as possible, nASTR or ASTR holders can take advantage of arbitrage opportunities and earn more income while keeping the pair stable.
If the ASTR:nASTR ratio decreases from 1, traders can sell their nASTR tokens for ASTR tokens and stake them back on Algem. They will end up with more nASTR than before the action.
Suppose the ASTR:nASTR ratio increases from 1. Then, traders can buy nASTR tokens using ASTR tokens and unstake them on Algem using the regular unstaking or the immediate unstaking options. In that case, they will end up with more ASTR than before the action.
During our future iteration, we will concentrate on developing the infrastructure to use nASTR inside Algem. We call it the nASTR market with these use cases: Buy or sell nASTR; Use nASTR as a collateral. Users can take loans against their nASTR if they think they can use their credit money more efficiently than a loan percentage rate; Swap (our AMM).