As you may have already seen, the Aster project made a loud announcement: they declared that they will burn 50% of all funds allocated for token buybacks (Buyback). The news already had an effect — the ASTER price jumped by 14%. But what’s really behind this move? Let’s analyze, not emotionally but based on documentation, whether this is a well-thought-out long-term strategy or just an attempt to stir up hype.
What is actually happening? Let’s refer to the sources.
According to official documentation, the buyback and burn mechanism is a cornerstone of ASTER’s economy. Here’s how it works:
1. Source of funds: 100% of trading fees on the exchange itself, as well as a portion of revenue from their NFT marketplace and Launchpad, are directed into the so-called “Treasury” (Treasury).
2. Buyback & Burn mechanism: These collected funds are regularly used to buy ASTER tokens from the open market. Before the recent announcement, all purchased tokens were irreversibly burned.
And now? The new “50/50” strategy.
The news states that the buyback is now split in half:
· 50% of the funds — go toward buying and burning tokens. This is a classic deflationary mechanism that reduces the (total supply).
· The other 50% — go toward buying and adding liquidity (LP) in pairs such as ASTER/USDT.
Is this good or bad? Here are my thoughts “for” and “against.”
FOR (Strengths):
1. Double impact on inflation: Burning directly makes the remaining tokens scarcer. The law of supply and demand still applies.
2. Strengthening stability: Buying liquidity is no less important, though less “sexy.” Deep liquidity makes trading less volatile, protects against large orders, and boosts institutional investor confidence. It’s a sign of a mature project that considers not only the price but also the health of its ecosystem.
3. Synergistic effect: Improved liquidity attracts more traders → higher trading volume → more fees in the Treasury → more funds for the next buyback and burn cycle. A virtuous circle is created.
AGAINST (Questions and Risks):
1. Short-term spike effect: The 14% increase might just be a reaction to the news. Without fundamental growth in the usage of (DEX, NFT, Launchpad) products, this effect could be temporary.
2. How much has already been burned? It’s important to look not at the announced percentages but at absolute figures. 50% of $10,000 versus 50% of $1,000,000 — that’s a huge difference. Transparency and regular reporting on operations are essential.
3. Dependence on volume: This system only works if trading volume remains high. If interest in the platform wanes, fee flow will dry up, and the mechanism may slow down or stop.
Conclusion: Hold or buy now?
Personally, I see this move not as desperation but as an evolution of tokenomics. Transitioning from a simple “buy and burn” to a more complex “burn and strengthen liquidity” strategy indicates that the team is thinking long-term.
· If you already hold #ASTER — this is an encouraging signal, confirming the team’s commitment to increasing the token’s value.
· If you’re considering buying — look beyond the +14% candle and focus on fundamental metrics: Is the TVL in their DEX growing? Is trading volume increasing? Are new projects launching on their Launchpad? If the ecosystem is alive and developing, this mechanism can become a powerful accelerator for it.
In the end, Aster isn’t just throwing logs into the fire but building a self-sustaining stove. But like any complex system, it requires constant “fueling” in the form of real user demand.
What do you think? Is this a genius move or am I missing something? Share your thoughts!
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