The Aptos Foundation proposes a big change within the dynamics of the Aptos token and publicizes quite a few possible policy changes designed to stimulate greater APT deflation.
In an X post on Wednesday, the Aptos Foundation said it might recommend several governance proposals to support the ecosystem's transition away from its current subsidy-based emissions model towards a concentrate on “performance-driven mechanisms” and reducing APT supply.
“The Aptos Network is transitioning to performance-driven tokenomics that goals to align supply mechanisms with network usage,” the Aptos Foundation said, adding:
“This update replaces bootstrap-era subsidies with mechanisms tied to transaction activity, making a framework where burns can exceed emissions as high-throughput applications scale.” Source: Aptos
One of the muse's proposals is to set a tough cap of two.1 billion tokens, as APT currently doesn’t have a maximum for its total supply. The team said there are currently 1.196 billion APT in circulation.
Under the present issuance structure, latest tokens are continually minted to support the ecosystem by funding things like development, grants, and staking rewards.
Significant token unlocks are actually hanging over the ecosystem.
However, the Aptos Foundation said that this pressure has eased and can proceed to ease after the tip of the subsequent major four-year token unlock cycle in October, leading to a 60% decline in annual supply unlocks.
The team said APT tokenomics must develop into more sustainable because the ecosystem has matured to the purpose where major institutions like BlackRock, Franklin Templeton and Apollo are actually staking “a whole bunch of thousands and thousands on-chain.”
“Without reforms, emissions will persist indefinitely, with no hard cap, no performance requirements, and no connection between emissions and network activity,” the team said.
Major proposals and policy changes underway
In addition to the hard supply cap of two.1 billion, the proposed policy changes include a discount within the annual deployment compensation rate from 5.19% to 2.6% and a rise in rewards for “longer deployment commitments.”
The Aptos Foundation said this might reduce overall deployment emissions while rewarding long-term participants.
Elsewhere, the team is pushing for a tenfold increase in gas fees, arguing that this is feasible given how low-cost it’s to make use of the network. Since the gas fees paid in APT are burned, this might also help reduce emissions.
“Even with a 10x increase, stablecoin transfers would still be the bottom on the planet at around $0.00014, making it the perfect blockchain for stablecoins, payments and all other similar high-volume transactions,” the team said.
The Aptos Foundation also proposed permanently locking 210 million APT tokens to be used on the network. The team said that is “functionally akin to a token burn” and the rewards can be used to fund the muse’s operations.
The team also said it might change its grant policies and introduce stricter KPIs to make sure higher performance before token issuance. Finally, the muse can even explore a token buyback program or APT reserve to balance supply.
The Aptos Foundation will not be alone in searching for major shakeups in native token dynamics. In January, the Optimism governance community approved a proposal from its foundation to launch a buyback program using 50% of Superchain revenue.
Meanwhile, a big token burn was approved on decentralized exchange Uniswap in December, and the PancakeSwap community also approved a supply reduction proposal last month.
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