NEAR Protocol Opens Vote to Cut Annual Token Issuance to 1.6% Over 24 Months
NEAR Protocol's House of Stake has opened voting on a proposal to reduce the blockchain's maximum annual token issuance from 2.5% to 1.6% over 24 months, a change designed to limit token dilution while lowering staking rewards and validator revenue.
The proposal, identified as HSP-029 and authored by Sal Ternullo of SVRN, would gradually reduce the issuance cap while maintaining the existing distribution of newly issued NEAR tokens: 90% to staking participants and 10% to the treasury. The ballot opened on October 19 and will remain active for 14 days, ending November 2.
NEAR Token Issuance Proposal Outlines Gradual Reduction
Under HSP-029, the maximum annual issuance rate would decline incrementally over 24 months, at a pace equivalent to approximately 3.75 basis points per month. The proposal estimates that gross annual staking yield would fall from about 5.27% to 3.37% if staking participation remained at the 42.71% recorded in a September 22 snapshot.
The projected yields are estimates rather than guaranteed returns. If the proportion of NEAR tokens committed to staking decreases, the staking allocation would be distributed among fewer staked tokens, potentially increasing the yield earned by participants who remain.
NEAR Protocol announced the vote, describing the proposed change as a plan to "cut issuance from 2.5% to 1.6% over 24 months."
Lower Issuance Could Reduce Validator Revenue
The proposed reduction would affect different groups of token holders in different ways. Holders who do not stake their NEAR tokens could benefit from slower dilution, while stakers would receive fewer newly issued tokens under the lower issuance schedule.
Validators could also see their commission revenue decline. HSP-029 estimates that operators without their own NEAR holdings could lose approximately 36% of commission revenue once the issuance rate reaches the proposed target. Actual earnings would also depend on delegated stake and fees.
The proposal recognizes that lower staking yields could discourage some participants from staking their tokens. However, any resulting change in staking participation could influence the yields received by those who continue to participate.
Validator Adoption Required After Community Vote
A successful vote would not automatically activate the new issuance schedule. Validators would need to adopt a separate protocol upgrade before the reduction could take effect. HSP-029 specifies a 90-day grace period after ratification before the lower issuance rate begins.
The grace period is intended to give wallets, exchanges, custodians and staking service providers time to update their systems and disclosures ahead of implementation.
The proposal also calls for quarterly reports comparing actual token issuance against the planned schedule and monitoring the health of the validator set.
SVRN Discloses NEAR Holdings and Voting Position
Ternullo's disclosure states that SVRN holds approximately 55 million NEAR tokens, with more than 90% of those holdings staked. The organization intends to vote in favor of HSP-029.
The proposal follows an earlier debate over NEAR's token issuance policy. The Defiant reported in October 2025 that NEAR's core team included a reduction in issuance from 5% to approximately 2.5% in a protocol upgrade despite an earlier community vote that failed. The move prompted objections concerning governance, while validator adoption remained a separate requirement.
HSP-029 retains the distinction between a community decision and the subsequent validator adoption process. Its implementation framework would also introduce quarterly monitoring to track whether issuance follows the planned reduction and whether the validator set remains healthy.
source: thedefiant
Writer: Ethan Collins
Crypto Journalist
Ethan Collins reports on developments across the cryptocurrency and blockchain sector. His work covers market movements, protocol updates, regulatory changes, and emerging trends in digital assets.
He focuses on presenting complex topics in a clear and accessible manner for a broad readership.
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