APT issuance: is it a significant reduction in supply or an inevitable reform?

Aptos Foundation announced an ambitious plan to transform the tokenomics of its flagship asset. The issuance, which was previously based on unlimited new token releases, is now considered outdated by developers. The foundation has proposed a series of measures aimed at shifting from a subsidy-based model to mechanisms tied to actual network activity.

Why does issuance need to be transformed?

The current APT generation system has no strict cap — tokens are minted continuously to fund development, grant payments, and staking rewards. The result is clear: large unlocks of tokens constantly pressure the asset’s price. However, this is less a problem of the issuance itself and more a sign that the ecosystem has outgrown this model.

Aptos Foundation emphasized: when giants like BlackRock, Franklin Templeton, and Apollo enter the ecosystem, deploying hundreds of millions of dollars on-chain, issuance should no longer be a development mechanism but a tool for incentives. The ecosystem has matured for a more sustainable approach.

Specific steps: from supply limits to deflationary mechanisms

The main proposal is to introduce a hard cap of 2.1 billion APT. Currently, about 780 million coins are in circulation, providing room for expansion but offering a clear horizon for investors. As a result, the annual token issuance will decrease by 60% after the current four-year cycle ends.

Staking issuance will also change: the annual rate will drop from 5.19% to 2.6%. At first glance, this seems bad for holders, but Aptos Foundation proposed compensation — increased rewards for long-term token lockups. The strategy is clear: incentivize loyal participants and reduce issuance volume simultaneously.

Staking, fees, and locking: a full range of changes

The package includes a tenfold increase in transaction fees. At first glance, this may seem intimidating, but Aptos Foundation is confident that even after the increase, the cost remains competitive. An additional bonus is that all these fees are burned, creating extra deflationary pressure on the supply.

Developers also proposed permanently locking 210 million APT in staking, which is functionally equivalent to burning them. Rewards from this lockup will fund the foundation’s operations — so the system essentially self-sustains.

Grants will become more selective: strict KPIs for recipients mean assets are allocated only based on proven results. Finally, Aptos is exploring a buyback mechanism for APT to balance the market supply.

Market reaction: initial signs of volatility

Following the announcement, the token dropped 4.1%. A more serious issue is the monthly trend: over the past few weeks, the coin has lost about 46% of its value. At the time of writing, APT is trading around $0.96, showing volatility amid significant structural changes.

History reminds us that decentralized protocols often face criticism when attempting to reform their own economy. In late December, the Uniswap community approved the UNIfication initiative, redirecting part of the protocol’s trading fees — a measure that sparked similar discussions about fairness and long-term sustainability. Issuance is always a fragile balance between stimulating growth and protecting value for current holders.