The NEAR Protocol community has approved a proposal to lower the token’s maximum annual issuance from 2.5% to 1.6%, marking a significant change to the network’s monetary policy. The measure, known as HSP-029, passed through the ecosystem’s House of Stake governance system on Nov. 2, 2026.

Support in the vote was nearly unanimous. According to the published result, 99.97% of participating veNEAR backed the proposal, with turnout at about 62%. In total, 32 participants voted in favor, representing roughly 3.29 million veNEAR.

How the reduction would work

The approved plan does not cut issuance in a single step. Instead, it sets out a 24-month phase-in that would gradually bring the annual cap down to 1.6%. The reduction would proceed at roughly 0.0375 percentage points per month, with adjustments applied each network epoch.

While the issuance rate would fall, the current split of newly issued tokens would stay in place. Under the proposal, 90% of issuance would continue going to staking participants and 10% would still be directed to the protocol treasury.

Projected effects on supply and yields

The proposal’s projections indicate that daily issuance would decline from about 89,517 NEAR to 57,291 NEAR once the target rate is fully reached. Over a two-year period, that would result in about 11.8 million fewer NEAR being issued than under the current model.

Over six years, the cumulative gap versus the baseline could reach 66.1 million NEAR, described in the proposal as about 4.36% of total supply. The document also estimates that gross staking yield could decrease from 5.27% to 3.37% if the share of locked tokens remains unchanged.

Validator economics were part of the debate

The impact on validators was one of the factors considered in the proposal. Based on its estimates, once the 1.6% target is in place, 24 out of 405 pools may no longer be able to cover operating costs using earned rewards alone.

That projection does not mean the change takes effect immediately, but it outlines one of the trade-offs tied to lower issuance. The proposal presents the reduction as a supply-side adjustment while acknowledging possible pressure on smaller or less efficient validators.

What happens before any change reaches the network

The governance vote by itself does not alter network parameters. Before the new issuance schedule can begin, the measure still needs review by the House of Stake Security Council, followed by a protocol upgrade and adoption by validators.

After those steps, a transition period of about 90 days is planned so wallets, exchanges, custodial providers, and staking platforms can prepare for the change. Only then would the phased reduction start. The initiative was authored by SVRN CEO Sal Ternullo, who had previously floated a more far-reaching idea of ending new NEAR issuance entirely in favor of a fixed-supply model, though that approach is not part of HSP-029.

Source: incrypted.com