Aptos Foundation to Propose New Deflationary Tokenomics

The Aptos Foundation is proposing a significant shake-up to the dynamics of the Aptos token, announcing a range of potential policy changes designed to spur greater APT deflation.  

In an X post on Wednesday, the Aptos Foundation said it would submit several governance proposals to help transition the ecosystem away from its current subsidy-based emissions model toward a focus on “performance-driven mechanisms” and reducing APT supply. 

“The Aptos network is transitioning to performance-driven tokenomics designed to align supply mechanics with network utilization,” the Aptos Foundation said, adding:

“This update replaces bootstrap-era subsidy with mechanisms tied to transaction activity, establishing a framework where burns can exceed emissions as high-throughput applications scale.” 

One of the foundation’s proposals is to set a hard cap of 2.1 billion tokens, as APT currently has no maximum on its total supply. The team said there are currently 1.196 billion APT in circulation.

Under the current emission structure, new tokens are continuously minted to support the ecosystem by funding things like development, grants, and staking rewards. 

Meanwhile, significant token unlocks have been hanging over the ecosystem. 

However, the Aptos Foundation said this pressure has been easing and will continue to decline after the next major four-year token unlock cycle ends in October, resulting in a 60% reduction in annualized supply unlocks. 

The team said that as the ecosystem has matured to the point where big institutions such as BlackRock, Franklin Templeton, and Apollo are now deploying “hundreds of millions onchain,” APT tokenomics need to become more sustainable. 

“Without reform, emissions continue indefinitely with no hard ceiling, no performance requirements, and no connection between issuance and network activity,” the team said. 

Key proposals and policy changes afoot 

Alongside the hard 2.1 billion supply cap, the proposed policy changes include reducing the annual staking rewards rate from 5.19% to 2.6% and increasing rewards for “longer staking commitments.” 

The Aptos Foundation said this would reduce overall staking emissions while also rewarding long-term participants. 

Elsewhere, the team is pushing for a 10-fold increase in gas fees, arguing that there is room to do this given how cheap it is to use the network. As gas fees paid in APT are burned, this would also help reduce emissions. 

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“Even with a 10X increase, stablecoin transfers would still be the lowest in the world at around $0.00014, making it the ideal blockchain for stablecoins, payments, and any other similar high-volume transactions,” the team said.

The Aptos Foundation also proposed permanently locking 210 million APT tokens for staking on the network. The team said this would be “functionally equivalent to a token burn” and that the rewards would be used to fund foundation operations. 

The team also said it will change its grants policy and enact stricter KPIs to ensure greater performance before issuing tokens. Finally, the foundation will also explore a token buyback program or APT reserve to help balance supply.

The Aptos Foundation is not alone in seeking major shakeups to native token dynamics. In January, the Optimism governance community approved a proposal from its foundation to initiate a buyback program using 50% of Superchain revenue. 

Meanwhile, decentralized exchange Uniswap saw a significant token burn approved in December, and PancakeSwap’s community also approved a supply-reducing proposal last month.

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