Aptos Foundation Advocates for Token Supply Limit and Staking Incentive Adjustments

In a bid to encourage a deflationary token economy, the Aptos Foundation has introduced a proposal to amend its current tokenomics and governance. The foundation has put forward a recommendation to enforce a 2.1 billion APT token hard cap, alongside a reduction in staking rewards and an increase in network gas fees to diminish token emissions. Currently, 1.196 billion APT are in circulation, setting the stage for a potential 43% increase until the cap is reached. Touting the proposal as a move away from subsidy-based emissions, the Foundation aims to establish a performance-driven system emphasizing long-term staking commitments and increased transaction cost with a 10-fold gas fee hike. The raised fees, however, would still allow for competitively low stablecoin transfer costs on their network. Additionally, to bolster the economy, 210 million APT tokens may be permanently staked to support foundation operations through rewards, rather than selling treasury tokens. Aptos Foundation's proposal also explores the idea of a token buyback program or constituting an APT reserve funded by the foundation's resources. These measures are in line with similar economic restructuring efforts seen recently in the DeFi space, as protocols like Aave and Injective have sought to recalibrate their own token supply and staking dynamics, with Uniswap also participating in token burning activities to manage their UNI token's circulation.