NEAR Protocol token holders have overwhelmingly voted to reduce the network’s maximum annual token issuance, a significant move aimed at curbing dilution and refining its long-term economic strategy. The on-chain governance body, the House of Stake, approved proposal HSP-029, which will trim the issuance ceiling from 2.5% to 1.6%.
This decision, announced on November 2, 2026, marks a pivotal moment for the blockchain, but the changes won’t be immediate. The phased reduction will take place over 24 months, following several crucial steps, including review by the Security Council, official ratification, a 90-day grace period, and a separate protocol upgrade adopted by network validators.
Historic vote for NEAR token issuance
The ballot, which opened on October 19, 2026, saw substantial participation from the NEAR community. An impressive 99.97% of participating veNEAR (vote-escrowed NEAR) favored the proposal, with approximately 62% of the total veNEAR voting power casting ballots. This robust turnout underlines a strong consensus among holders for a more constrained token supply.
Authored by Sal Ternullo, CEO of Nasdaq-listed SVRN, the proposal HSP-029 is not a final implementation on its own. It initiates a multi-stage process designed to ensure stability and widespread acceptance before the new issuance schedule takes effect. This measured approach reflects lessons learned from previous governance efforts within the NEAR ecosystem.
This isn’t the first time NEAR Protocol has adjusted its issuance cap. In October 2025, the network halved its maximum annual issuance from 5% to 2.5% through a similar validator upgrade path. These progressive reductions signal a clear strategic direction to mature the network’s economic model as its initial development phase concludes.
Unpacking the new issuance schedule
Once activated, the issuance cap will decrease gradually and systematically. The reduction will unfold over two years, linearly dropping by approximately 3.75 basis points each month. This recalculation will occur every epoch, rather than in fixed, abrupt steps, providing a smooth transition for the network.
Despite the overall reduction, the distribution model for newly issued tokens will remain unchanged. Staking participants will continue to receive 90% of the new tokens, while the remaining 10% will be allocated to the NEAR Protocol treasury. This structure aims to maintain incentives for network security through staking while supporting ecosystem development.
SVRN’s modeling projects significant long-term effects from this change. Over the next two years, roughly 11.8 million fewer NEAR tokens are expected to be issued than under the current trajectory. This figure grows substantially to 66.1 million fewer tokens over six years, representing a 4.36% reduction in total supply compared to the baseline path. Such changes can influence Bitcoin market trends and broader crypto sentiment.
To put this into daily perspective, the current 2.5% cap results in approximately 89,517 new NEAR tokens minted per day. Once the 1.6% target is fully reached, this daily issuance will fall to about 57,291 NEAR, meaning roughly 32,200 fewer new NEAR enter circulation each day. This substantial cut is designed to apply consistent deflationary pressure.
Economic implications for stakers and validators
The reduction in NEAR token issuance carries direct consequences for participants, particularly those involved in staking. Currently, the gross staking yield is estimated at about 5.27%. However, under the new 1.6% issuance rate, this yield is projected to decrease to approximately 3.37%. This shift will alter the economic calculus for many stakers.
For validators, who play a critical role in securing the network, the impact could be even more pronounced. Sal Ternullo’s analysis indicates that validator commission revenue could fall by roughly 36%.
His modeling further suggests that up to 24 out of the 405 existing validator pools might find it difficult to cover their operational costs from commission and owner-staking income at the new rate, assuming a NEAR price of $4.30 and specific monthly expenses.
This potential challenge for some validators highlights a key tension in tokenomics adjustments: balancing reduced dilution for holders with maintaining robust network security. It underscores the need for ongoing monitoring of validator health and sustainability as the new issuance schedule is implemented. Decisions like these can also impact the NEAR Protocol price outlook.
SVRN, a major stakeholder, explicitly disclosed its intentions and holdings during the proposal process. The firm holds approximately 55 million NEAR tokens, with over 90% of that staked, accounting for more than 8% of all staked NEAR.
Ternullo acknowledged that the issuance cut would also lower the yield on SVRN’s own substantial stake, indicating alignment with the broader community’s interest in long-term network health rather than short-term gains.
Governance evolution and future outlook
The successful passage of HSP-029 through the House of Stake demonstrates the increasing maturity of NEAR Protocol’s decentralized governance mechanisms. The House of Stake, launched on mainnet in October 2025, represents a “next-generation governance system” designed to be more transparent and scalable than its predecessor, the NEAR Digital Collective (NDC).
This particular proposal also arrives in the wake of previous discussions about NEAR’s long-term token supply. In August, NEAR co-founder Illia Polosukhin withdrew his “Sovereign Fund” proposal, which aimed to create a fund to hold NEAR tokens and generate yield. Polosukhin cited “risks the protocol should not internalize,” leading to alternatives like HSP-029 being considered.
The current implementation plan includes provisions for transparency and oversight. NEAR has committed to publishing quarterly reports that will compare the realized issuance figures against the new schedule. These reports will also track the health and stability of the validator set, providing crucial data points for ongoing adjustments and community feedback.
Looking ahead, the long-term vision articulated by Sal Ternullo includes potentially ending NEAR token issuance entirely, moving towards a fixed supply. This ambitious goal would further solidify NEAR Protocol’s position as a deflationary asset, enhancing its appeal to long-term holders. Such shifts are a core part of how developers access data and engage with blockchain ecosystems.
The protocol is increasingly positioning itself at the convergence of AI and blockchain, aiming to be a settlement layer for AI agents. Adjusting its tokenomics to reflect a more mature and sustainable economic model is crucial for attracting and retaining both users and developers in this evolving landscape.
This latest vote is a significant step in that strategic direction, reinforcing the community’s commitment to the network’s foundational principles.