NEAR Protocol’s on-chain governance body, the House of Stake, has approved a proposal to reduce the network’s annual token issuance ceiling from 2.5% to 1.6% over the next 24 months. The decision, announced by NEAR on Nov. 2, is intended to slow the creation of new tokens and reduce the network’s long-term inflation rate.
The proposal, identified as HSP-029, outlines a gradual reduction rather than an immediate change to token issuance. However, the governance vote does not automatically activate the new schedule. Additional approval and implementation procedures must be completed before the revised limit becomes binding.
The proposed reduction would lower NEAR’s annual issuance ceiling to 1.6% over two years, potentially reducing the number of new tokens entering circulation and changing staking rewards across the network.
NEAR Governance Proposal Requires Further Approval
The House of Stake vote represents an important step in the network’s governance process, but several procedures remain before implementation.
According to NEAR, the House of Stake’s Security Council must review the voting outcome before formal ratification. A grace period of approximately 90 days will follow, allowing the network to prepare for the proposed adjustment.
The final change will require validators to adopt the revised issuance schedule through a protocol upgrade. Therefore, the governance approval alone is insufficient to activate the new monetary policy.
The announcement did not disclose the final voting count. The available proposal documentation also did not include a detailed tally.
HSP-029 was authored by Sal Ternullo, chief executive of Nasdaq-listed SVRN. The proposal recommends reducing the issuance ceiling by approximately 3.75 basis points each month. The adjustment would be recalculated every network epoch rather than implemented through predetermined fixed reductions.
Under the proposed schedule, the annual issuance limit would gradually decline until reaching 1.6% at the end of the 24-month period.
Lower Issuance Could Reduce NEAR Supply Growth
The proposal estimates that the revised monetary policy could significantly reduce the number of new NEAR tokens issued over time.
According to Ternullo’s projections, the network could issue approximately 11.8 million fewer NEAR tokens over two years and 66.1 million fewer over six years compared with the existing issuance trajectory. This would result in a token supply approximately 4.36% below the level projected under the current policy.
The proposal also provides estimates of the potential impact on staking returns. Assuming current staking participation remains unchanged, gross staking yield could decline from approximately 5.27% to 3.37% once the new issuance ceiling reaches its target.
The reduction could also create financial pressure for some network validators. The proposal estimates that 24 validator pools may no longer cover their operating costs under the lower issuance rate, using the token price recorded in September for its calculations.
Based on the total supply measured on Sept. 22, the existing 2.5% issuance ceiling corresponds to approximately 89,500 new NEAR tokens daily. Under the proposed 1.6% ceiling, daily issuance would decline to approximately 57,300 tokens.
This represents a potential reduction of around 32,200 newly issued NEAR tokens per day once the transition is complete.
Staking Rewards and Treasury Allocation Remain Unchanged
Despite the proposed reduction in overall issuance, the distribution structure for newly created tokens would remain the same.
Under the existing arrangement, 90% of newly issued NEAR tokens are allocated to stakers, while the remaining 10% goes to the NEAR treasury.
However, lower issuance would reduce the total number of tokens distributed to both groups. This could affect validator economics and the returns available to participants securing the network.
NEW PROPOSAL PASSED
House of Stake, NEAR’s decentralized onchain governance body, has voted to lower NEAR’s maximum annual issuance from 2.5% to 1.6%, phased in over 24 months.
This is how NEAR’s economics evolve transparently and programmatically: token holders put a core parameter to a public vote, and the new rate rolls out epoch by epoch on a published schedule.
For NEAR’s tokenomics, that means lower long-term issuance and a supply schedule anyone can verify.
What happens next:
✦ The House of Stake Security Council reviews the result before ratification
✦ A ~90-day grace period follows ratification
✦ Validators adopt the change through a protocol upgrade, which makes it binding
✦ Token issuance then steps down every epoch, reaching 1.6% at month 24
✦ Quarterly reports track realized issuance against the scheduleFull proposal: https://t.co/qRFaLqqx4x
— NEAR Protocol (@NEARProtocol) November 2, 2026
The proposal seeks to reduce long-term token inflation while retaining the existing 90% allocation to stakers and 10% allocation to the NEAR treasury.
SVRN Discloses Its NEAR Holdings
The proposal also includes disclosures concerning the financial interests of its author and associated company.
Ternullo disclosed that SVRN holds approximately 55 million NEAR, with more than 90% of those holdings staked. The company’s position represents over 8% of the network’s total staked NEAR.
SVRN also indicated its intention to support the proposal. Ternullo acknowledged that reducing issuance would lower the staking yield earned on the company’s own holdings.
NEAR previously reduced its annual issuance ceiling to 2.5% in 2025 through a similar validator-led protocol upgrade.
The latest proposal follows discussions about alternative monetary policies after NEAR co-founder Illia Polosukhin withdrew a Sovereign Fund proposal in August, citing concerns about risks the protocol should avoid assuming.
NEAR Plans Quarterly Issuance Reports
Following implementation, NEAR intends to publish quarterly reports comparing actual token issuance against the revised schedule.
These updates are expected to provide greater transparency into the network’s monetary policy and help participants monitor whether the reduction is progressing as planned.
The proposal’s eventual impact will depend on validator adoption, staking participation, and the financial sustainability of network operators under the lower issuance structure.
