The Aster team announced a new model for its tokens on June 17, essentially funneling 99% of the protocol’s daily fees into automatic ASTER token buybacks. The protocol also linked each purchase to a corresponding burn of reserves. Aster calls this a 198% buyback and burn rate, and the announcement sent the ASTER token up 17% in a matter of hours.
Since the TGE of the Aster Token, the team has conducted six buybacks, with over 266 million tokens worth approximately $187 million bought back.
The project powered by YZI Labs is finally moving from unpredictable buybacks to a continuous rules-based system. ASTER investors view this as a positive signal for the asset, causing a sudden spike in its price.
How does Aster plan to use 99% of its platform fees?
Under the new modelAster will use 99% of its platform fees to automatically buy back ASTER tokens through daily TWAP execution. The new model leaves no remaining discretionary reserves for the team to manage manually.
Under the new token economy, each ASTER token bought back will be distributed to veASTER holders as part of equity rewards. In addition, a base bonus of $300,000 is paid per period. At the same time, an equal amount of $ASTER from the protocol’s reserves is destroyed, with the team’s allocations burned first. The burn runs over the course of two weeks and is supposed to continue until the total supply drops to 3 billion tokens.
According to the plan, Aster will eventually burn approximately 5 billion tokens, given that the current total supply is approximately 7.82 billion out of a maximum of 8 billion. In this model, Aster is betting on its ability to attract higher trading volume on its DEX platform. The time it takes the platform to burn over 5 billion tokens depends largely on future DEX activity.
Aster has also made some adjustments to the Spot side to improve its tokens. The newly approved model now allows each non-permitted token listed on the Aster website to incur a fee of $50,000 which also flows back into buybacks. They are then collected weekly and converted into signing bonuses after about two weeks.
How ASTER token repurchases affect the buy side
Ironically, last October, Aster announced that it would burn half of its buyback tokens, and the price fell by 2.8%. A few weeks later, Cryptopolitan I mentioned Aster completed the Phase 3 program by destroying 77.86 million tokens worth approximately $80 million, sent to the underlying dead address, and the token still fell by 2.7% in the next 24 hours.
During the same period, Chainlink’s buyback program coincided with a 35% rally, a contradiction that undermines the idea that the price is burning alone.
By February, so was Aster’s CEO, Leonard to treat This frustration is straightforward, with X holders telling that emissions and buybacks were following the published roadmap even as price action was delayed, with plans to stop unlocking the token monthly confirmed once the staking process fully commences.
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