Key Highlights
- NEAR proposes cutting token issuance from 2.5% to 1.6% over 24 months.
- The lower issuance could prevent about 66 million NEAR from entering circulation over six years.
- NEAR is also exploring a future fixed supply, but that plan is not part of the current vote.
NEAR Protocol is considering a proposal to reduce the amount of new NEAR tokens entering circulation each year, with the rate set to fall from 2.5% to 1.6% over 24 months.
According to the October 1 announcement on X, the proposal was introduced by Sal Ternullo, CEO of SVRN, through the NEAR Governance Forum and is now open to validators, House of Stake delegates, and the wider NEAR community. The plan would lower issuance gradually after each epoch until it reaches the 1.6% target. The current 90/10 split between stakers and the treasury would remain unchanged.
If the proposal passes a House of Stake vote, validators would still need to adopt the change through the normal network upgrade process.
Why NEAR wants to cut issuance
Ternullo said NEAR has reached a point where it may not need to issue as many new tokens as it did during its earlier growth period. The proposal points to an oversubscribed validator set and revenue being generated by NEAR Intents, with some of that revenue used to buy NEAR on the open market.
At the current 2.5% rate, about 89,500 new NEAR tokens are added to the supply every day. Most of those tokens go to stakers, but the proposal notes that 58.7% of NEAR is not staked. Those holders do not receive staking rewards, meaning new issuance can increase the number of tokens in circulation without giving them additional income.
The proposed cut would also change how much stakers earn. According to the discussion, staking yield could fall from about 5.4% today to around 3.5% at the target rate. For a holder staking 1,000 NEAR, the proposal estimates about 21 fewer NEAR would be earned over two years compared with the current 2.5% issuance rate.
However, the proposal says the lower issuance would also mean less dilution for holders who do not stake.
Over six years, the planned reduction is expected to prevent about 66 million NEAR from being newly issued. Based on the price used in the proposal, that amount would be worth roughly $329 million.
What happened after the last cut
The proposal also looks back at NEAR’s previous issuance cut. When the network reduced issuance from 5% to 2.5% last year, it had 342 active validators. The validator count later rose to 382 within three months and eventually reached 439 in April. It currently stands at 413, according to the proposal.
Ternullo also presented a bigger idea for NEAR’s future, although it is not part of the current vote. He wants the network to eventually stop issuing new tokens and move toward a fixed total supply.
“A fixed supply means every NEAR held is a permanent share of the network,” Ternullo wrote. Under this model, the network would aim to pay for its needs from revenue instead of relying on continuous token issuance.
The proposal comes after the withdrawal of the Sovereign Fund proposal in August. Ternullo said the discussion around that plan raised concerns about who would decide where funds should go. SVRN instead wants to explore a system that does not depend on discretionary decisions about how capital is allocated.
What comes next for the proposal
SVRN would also be affected by the proposed cut. The company disclosed that it holds more than 55 million NEAR, most of it staked, and that the first part of the proposal could reduce its annual earnings by roughly 970,000 NEAR.
The longer-term fixed-supply idea still needs research, especially around how NEAR would maintain network security without ongoing issuance. Any future proposal would go through its own discussion and vote.
The tokenomics discussion comes on the same day NEAR Intents halted service after detecting irregular outflows from a BNB Smart Chain hot wallet. The project estimated the preliminary loss at about $3.8 million and said the issue involved a bug in its Omni deposit and withdrawal infrastructure. It also said affected users would be compensated in full.
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