Aethir plans to begin burning ATH tokens every day from November 2026, using only fees paid by customers for compute capacity, under a redesign that ties token removals directly to activity on its decentralized cloud network. The company will also replace its fixed platform fee with a floating network fee determined by a public time-weighted average price, or TWAP, formula.
The model means the quantity of ATH removed from circulation would change with demand for Aethir’s computing services. More reservations for cloud compute would generate more network-fee revenue and, in turn, fund a larger daily burn. Aethir said the mechanism will apply from the first scheduled burn in November and continue daily thereafter.
Each burn will send ATH to Ethereum’s widely used irrecoverable address, 0x000000000000000000000000000000000000dEaD. Tokens transferred there cannot be accessed or reintroduced into the usable supply. Aethir said circulating-supply data on major token-tracking platforms is expected to reflect burns as they occur.
Daily burns will be funded by customer fees
Aethir’s proposal makes network fees the sole source of funding for the burn program. That design avoids drawing ATH for burns from a separately allocated treasury or setting a fixed token quantity that would be destroyed regardless of commercial activity.
The practical result is a variable burn rate. Compute reservations are the input: if customers reserve more GPU or other computing capacity through the network, fee collections rise and more ATH can be burned. Lower utilization would reduce the amount available for destruction.
Aethir said ATH’s contract supply remains capped at 42 billion tokens. The company described the daily program as a way to reduce net new supply pressure over time, while leaving the underlying token supply cap unchanged.
The distinction between total supply and circulating supply will be central to how the mechanism is assessed after launch. A burn does not alter the maximum quantity defined by the token contract, but it removes tokens from the tradable and usable pool once they reach the burn address.
Aethir plans to publish a dashboard alongside the first burn in November. The page is expected to display daily, monthly and cumulative burn figures, with transaction records available for public review. The tokenomics documentation will also be updated weekly with burn data, according to the company’s published timeline.
Aethir said CertiK audited the burn mechanism. Public on-chain burn transactions would provide an additional way for users to independently track transfers to the designated address.
Floating fee formula replaces a fixed platform charge
Alongside the burn program, Aethir will replace its existing fixed platform fee with a floating network fee governed by a TWAP-based formula. A TWAP calculates an asset’s average price over a defined period, reducing the influence of short-lived price swings compared with using a single market price.
Aethir said the formula will be public and will not allow manual adjustments. The fee rate and the portion directed toward burns are intended to respond automatically to market conditions under the parameters built into that formula.
Under the rules outlined by Aethir, weaker ATH market conditions would reduce the network fee rate while increasing the share of collected fees assigned to token burns. The fee has no minimum level and could fall to zero in extremely weak conditions.
That structure places a limit on the amount Aethir can extract from the economic activity supporting its hardware providers. As the fee falls, the network would collect less from customer transactions, though a greater proportion of whatever is collected could be allocated to burns.
Cloud Host rewards remain protected by a fee cap
The updated model includes a hard cap linked to Cloud Host rewards. Aethir said the network fee will never exceed the value of the Cloud Host reward, with the restriction embedded in the same public formula that calculates the floating fee.
Revenue above that cap would be allocated to the Host, according to Aethir. Cloud Hosts provide capacity to the network and receive ATH rewards under Aethir’s existing system.
The company said the ATH emission schedule for Cloud Hosts will not change. The new policy applies to the fee collected on top of those reward arrangements, with part of the collected amount routed to daily burns.
This safeguard addresses a basic tension in decentralized physical infrastructure networks: token-based mechanisms may seek to reduce circulating supply, while operators need predictable enough economics to keep supplying machines and capacity. By capping the fee at the value of Host rewards, Aethir is attempting to keep the burn framework from reducing the value assigned to infrastructure providers under the published rules.
The approach also means burn activity should not be interpreted as a standalone measure of network health. A larger burn would indicate more fee revenue, but the fee formula, ATH market price and allocation rules would all affect the final number of tokens destroyed on a given day.
New US and European capacity will use the same framework
Aethir said the fee-and-burn structure will extend to future capacity deployed through its ACCELERATE plan in the United States and Europe. Revenue produced by compute workloads at those sites will pass through the same network fee formula and burn allocation process.
That gives the mechanism a wider operational scope than Aethir’s current network activity alone. If new regional capacity attracts customers, its fee revenue would enter the daily burn calculation without requiring a separate tokenomics system for those deployments.
The November rollout will provide the first measurable test of the model. Daily on-chain burns, customer-reservation activity and the published fee formula should show whether the program produces a meaningful and sustained reduction in ATH circulating supply, or whether burn volumes remain modest during periods of lower compute demand.
Curious how tokenomics shape crypto markets? Explore what is tokenomics and why it matters for long-term projects like ATH.
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