NEAR Curbs Inflation: Community Approves 36% Reduction in Token Issuance

NEAR Protocol plans to significantly slow the rate at which new tokens enter circulation. In early November, the community approved a proposal that will reduce the maximum annual issuance rate from 2.5% to 1.6% over two years. While token holders who do not participate in staking will see their share of the total token supply diluted more slowly, node operators and stakers must prepare for a noticeable decline in rewards.

Gradual Reduction Rather Than an Immediate Shock

Proposal HSP-029 secured the support of 99.96% of the voting power that participated in the November 2, 2026 vote, representing approximately 3.29 million veNEAR tokens. However, the monetary policy change will not take effect overnight. The authors opted for a gradual model in which the annual issuance cap will decline from the current 2.5% over the next 24 months until it reaches the target rate of 1.6%.

This measure will not burn any existing assets; it will only slow the creation of new ones. According to the mathematical model published by the proposal’s authors, the change will result in 66.1 million fewer NEAR tokens being created over six years. The total supply should therefore be approximately 4.36% lower than under a scenario in which the network makes no adjustment.

Different Effects on Stakers and Passive Holders

The issuance rate adjustment will have different economic consequences for different groups of participants. Approximately 57% of the total NEAR supply was not being staked when the proposal was submitted. As a result of lower issuance, these passive holders will see slower dilution of their percentage share of the total token supply.

Conversely, participants who actively secure the network through staking must expect a gradual decline in yields. Projections in the proposal show that the modelled gross yield will fall from the current 5.268% to 3.372% after the two-year transition period. After accounting for standard 5% validator fees, the net yield could settle at approximately 3.2%.

Economic Pressure on Node Operators

Lowering inflation also logically reduces the budget available to finance blockchain security. Validators keep the network running and cover their operating costs primarily from rewards regularly paid to them by the protocol.

The model in the accompanying analysis of the proposal shows that, at a reference price of USD 4.30 per NEAR token, approximately 24 of the 170 currently profitable smaller validators would lose economic self-sufficiency once the new rate is fully implemented. The entire ecosystem therefore faces a clear trade-off between pursuing a more stable monetary policy and maintaining sufficiently broad decentralized infrastructure.

Long-Term Trend and Next Steps Before Implementation

This is not NEAR Protocol’s first reduction in issuance. In October 2025, the ecosystem had already successfully halved its then-5% issuance cap. If the current proposal is fully implemented, the network’s total inflation rate will be 68% lower than its level before 2025.

The path to actual deployment, however, requires further procedural steps.


The community vote is only the initial phase. The proposal is now being reviewed by the Security Council within a 14-day period, to be followed by an approximately 90-day preparation period. The issuance rate will begin to decline only after the necessary technical upgrades to the nodes themselves, likely pushing the start of the entire process into 2027.

Summary

The NEAR network is systematically shifting from a high-inflation model to slower growth in token supply, thereby limiting the dilution of existing holders’ share of the total token supply. However, approval of this restriction did not trigger an immediate price increase, confirming that the market views inflation policy as only one component of the overall valuation.


While a more stable supply creates more favourable economic conditions for the token, its long-term value will still have to depend primarily on real demand, the number of active users and the overall use of the technology.

Warning: The content of this article is intended solely for informational and analytical purposes and does not constitute investment advice, a financial recommendation or a proposal to buy or sell any digital assets or securities.