NEAR Protocol Votes to Cut Token Issuance by 36%

NEAR Governance Backs Major Cut to Token Creation

NEAR ProtocolNEAR-2.38%'s governance body has voted to slow down its token creation machine. On November 2, 2026, members of the House of Stake backed a proposal to lower the blockchain's annual token issuance ceiling by 36%.

The approved initiative, known as HSP-029, passed with near-unanimous support. Over 99.96% of participating votes—representing 3.29 million ve NEAR in voting power—favored the policy shift.

This decision kicks off a two-year reduction plan. It aims to reduce token dilution for standard holders, though it also means smaller staking payouts for network validators.

Understanding the New Monetary Policy Schedule

Think of token issuance like central bank money printing. When a network creates fewer tokens each year, existing tokens experience less inflation.

Under HSP-029, NEAR's annual issuance ceiling drops from 2.5% down to 1.6%. However, the change will not happen overnight.

Instead, the protocol will scale down issuance gradually over 24 months. Each epoch will bring minor reductions averaging 0.0375 percentage points per month.

This step-by-step approach ensures node operators and investors are not caught off guard by sudden reward drops. This move follows a previous issuance halving executed by the Layer 1 network back in October 2025.

How the Distribution Formula Works

The proposal modifies only one specific parameter: the maximum issuance ceiling rate. The core distribution rule stays exactly the same.

• 90% of new tokens go directly to staking participants who secure the network.
• 10% of new tokens flow to the community treasury.

The measure does not grant any extra spending authority to the treasury or individual teams. It simply lowers the total supply of new NEAR entering circulation.

Who Proposed the Reduction?

The vote was proposed by Sal Ternullo, CEO of the Nasdaq-listed firm SVRN. His company has a major stake in the ecosystem.

SVRN disclosed that it holds roughly 55 million NEAR. Most of these tokens are staked, representing more than 8% of all staked NEAR across the network.

This proposal followed another recent governance update. NEAR co-founder Illia Polosukhin recently withdrew a separate proposal for a Sovereign Fund, citing potential operational risks to the core protocol.

Next Steps Before Implementation

Passing the vote is just the first step. The policy modification requires several approval and operational phases before taking effect on the main blockchain:

1. Security Council Ratification: The House of Stake Security Council must formally review and ratify the vote results.
2. 90-Day Preparation Period: Exchanges, custodians, wallet providers, and staking services get three months to adjust their infrastructure.
3. Validator Upgrade: Network node operators must upgrade their validator software to enact the new issuance math.

The network will also publish quarterly reports to track actual token issuance against the planned trajectory.

By the Numbers: Token Savings vs. Staking Yields

Economic models included in HSP-029 outline how fewer tokens will enter the market over the coming years.

The network avoids minting about 11.8 million NEAR during the first two years. Over six years, that total savings expands to approximately 66.1 million NEAR.

Once fully implemented, daily token minting will drop from roughly 89,500 NEAR to 57,300 NEAR.

Impact on Yields and Validators

Fewer minted tokens mean smaller rewards for network stakers. Yield projections depend heavily on overall network participation levels:

• Gross Staking Yield: Projected to decline from 5.268% to 3.372%, assuming total staked volume remains constant.
• Validator Commission Income: Projected to face an estimated 36% reduction under unchanged network conditions.

This pay cut could create pressure on smaller node operators who rely on block rewards to cover server and operating costs.

Balancing Network Security and Supply Growth

NEAR currently has a circulating supply of around 1.31 billion tokens. While the blockchain does not have a strict maximum supply cap, it burns a portion of transaction fees to offset emissions.

For regular token holders, slower issuance protects their tokens from supply dilution. However, lower staking yields could affect validator participation over time.

The core trade-off is clear: minting fewer tokens slows dilution for holders, but validators need enough economic incentive to keep securing the network.

Investors should keep in mind that crypto market conditions remain volatile. Staking yields are projections based on theoretical models and may shift based on user behavior and broader market dynamics. Past performance of digital assets is no guarantee of future results. Track real-time market metrics on Bitkub Market.