NEAR Governance Approves Major Supply Cut – But Token Slides 7%
A major change in NEAR tokenomics could shrink projected supply by 4.36% over six years, while reducing staking returns.
ByChayanika Deka
A proposal to gradually lower NEAR Protocol’s maximum annual token issuance from 2.5% to 1.6% over 24 months has secured approval from the network’s House of Stake governance body.
The measure, outlined under HSP-029, aims to slow supply growth and limit long-term token dilution while preserving the existing reward structure. It retains the current allocation of newly issued tokens. 90% goes to staking participants, and the remaining 10% is directed to the protocol treasury.
Rather than introducing a new emissions framework or changing validator reward distribution, the measure focuses on adjusting a single protocol parameter.
HSP-029
The reduction will be introduced gradually across network epochs. The issuance ceiling will decline by approximately 3.75 basis points each month until it reaches the 1.6% target. According to estimates in the proposal, the revised schedule could prevent around 11.8 million NEAR from entering circulation over the first two years, with the cumulative reduction reaching 66.1 million over six years. This would leave the network’s supply approximately 4.36% lower than under the existing issuance model.
The change is also expected to affect staking returns. Based on the network’s September participation figures, gross staking yield is projected to fall from 5.268% to 3.372% once the new issuance rate is fully implemented.
The move comes amidst several discussions within the NEAR ecosystem about how to improve token economics without introducing discretionary funding mechanisms. Earlier proposals involving a treasury-backed fund raised concerns about placing validator support and capital allocation under human decision-making rather than predictable protocol rules. HSP-029 instead opts for a scheduled adjustment that requires no new administrator, price oracle, or spending program.
The change will not take effect immediately following the vote. It still requires a Security Council review, ratification, and a 90-day waiting period before validators adopt the necessary upgrade. Once implemented, the lower issuance rate will be introduced gradually over 24 months, while the existing token distribution remains unchanged.
