What is the New Proposal on Aptos? Reduced Staking Yield Plans and Its Impact on APT

2025-04-21

The Aptos blockchain network has been making waves in the crypto community recently with a Aptos new proposal that could significantly shift the platform's economic dynamics.

The main question on everyone’s mind right now is what is the new proposal on Aptos, and how will it affect staking and the broader APT ecosystem?

Introduced under the title AIP-119, this new plan seeks to reduce staking yields drastically, a move that has sparked both excitement and concern among community members and investors alike.

Backed by Aptos contributor moon shiesty, this proposal is still under community review but could soon head to a mainnet governance vote. Its core idea is simple: reduce the APY on APT staking from around 7% to 3.79% over the course of three months.

But why make such a drastic change? Let’s break it down.

Aptos New Proposal: Reduced Staking Yield Plans

On Aptos new proposal, AIP-119 is about capital efficiency and sustainability. The Aptos team believes that high staking rewards may no longer be necessary and could even be counterproductive.

By lowering the incentives, the network hopes to:

1. Reduce token inflation

2. Reallocate capital towards DeFi protocols and real innovation

3. Encourage more active participation in the network instead of passive income strategies

This isn’t just a numbers game. It’s a long-term vision aiming to steer the Aptos ecosystem toward greater decentralization and technological growth.

The Numbers Behind the Aptos New Proposal

Key elements of the Aptos new proposal:

1. Staking reward cut: From ~7% to 3.79%

2. Timeline: Gradual reduction over the next three months

3. Purpose: Shift focus from passive staking to dynamic participation in ecosystem growth

This nearly 44% reduction is designed to slow down inflation and improve the network’s financial structure. But as with any change in crypto, the response has been mixed, especially from validators.

Community Reaction on Aptos New Proposal

The Aptos community is currently buzzing with debate over this proposed shift. While some developers are optimistic, others, especially smaller validators, are worried about their future.

Argument Supporting Aptos New Proposal:

1. Increased innovation: With less passive income from staking, capital may flow into DeFi apps and startup projects, sparking development.

2. Inflation control: Lower yields help curb token supply, which could stabilize or even increase APT’s value over time.

3. Better capital allocation: Instead of locking up funds for yield, users might invest in real use-cases and services.

Concerns and Drawbacks

1. Validator exit risk: Smaller validators, especially those holding less than 3 million APT, might find operations unprofitable, leading to network centralization.

2. Uncertain rewards: Reduced APY might make APT less attractive for new stakers, impacting token demand and network activity.

3. Market dominance: Bigger validators might consolidate power, reducing decentralization, a cornerstone of any blockchain’s ethos.

Yui, COO of an Aptos-centric gaming platform, voiced concerns that smaller validators might pull out, giving room for larger players to dominate. On the flip side, Kevin, a developer from BlockBooster, believes the proposal could trigger more useful products on Aptos.

Impact of Aptos New Proposal on APT Holders

So, how will Aptos new proposal affect the price and market dynamics of APT?

At the time of writing, APT is trading around $4.89, with a market cap of $3.02 billion. However, the token has faced pressure lately, recording a 23.66% decline over 60 days, and a 45.44% drop in the past 90 days.

Market analysts suggest that reduced staking rewards might push investors toward short-term exits, but could also strengthen the ecosystem long-term by improving tokenomics. As the network matures, fewer emissions and more utility-driven demand could stabilize APT’s valuation.

Mo Shaikh, CEO of Aptos Labs, made it clear that this isn’t just a technical change. It’s a strategic evolution to improve capital efficiency and encourage active innovation in the ecosystem.

Impact of Aptos New Proposal on Aptos Ecosystem

4 Ways the Aptos New Proposal Could Affect Aptos

1. Greater Capital Efficiency: By discouraging passive staking, Aptos hopes to reallocate funds to more productive sectors of the ecosystem.

2. Validator Centralization Risks: Without support mechanisms, small validators might drop off, creating a more centralized validator set.

3. Increased Activity in DeFi Protocols: With lower staking yields, investors may chase returns in Aptos-based DeFi projects, potentially increasing on-chain activity.

4. Reduced Inflation: Lower staking payouts mean fewer new APT tokens being minted, a move that could slow inflation and support long-term price appreciation.

Conclusion

The proposal to reduce staking yields on Aptos is undoubtedly a bold move, one that could redefine the network’s future.

While it may temporarily shake up validator economics and token incentives, the long-term goals are clear: boost real innovation, improve efficiency, and attract capital to meaningful initiatives.

If the Aptos community navigates this transition well, particularly by supporting smaller validators and encouraging DeFi growth, this proposal could mark a turning point. But only time, and a successful governance vote, will tell.

FAQ

What is the new staking yield under AIP-119?

AIP-119 proposes reducing staking yields from ~7% to 3.79%, gradually over three months.

Why is Aptos reducing its staking rewards?

The aim is to improve capital efficiency, reduce inflation, and shift focus toward innovation and DeFi development.

How will this affect validators?

Smaller validators could face economic pressure, which may lead to centralization unless mitigation strategies are implemented.

Could this move affect APT’s price?

Short-term volatility is possible, but the long-term goal is to make APT’s tokenomics healthier and more sustainable.

When will the governance vote happen?

The community and Aptos Foundation are reviewing the proposal. A mainnet governance vote is expected in the fifth week following this phase.

Aptos

Disclaimer: The content of this article does not constitute financial or investment advice.

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