The plan, known as HSP-029, would phase in the lower ceiling over 24 months rather than changing NEAR’s existing emissions structure immediately. NEAR’s governance proposal says the maximum rate would decline linearly each epoch, by roughly 3.75 basis points per month, until reaching the 1.6% target at the end of the rollout.
The proposal does not change the allocation of newly issued tokens. Staking participants would continue to receive 90% of emissions, while 10% would go to the protocol treasury. The change is instead focused on the total amount entering circulation, reducing the supply growth available to both groups.
The vote has already succeeded, with 99.96% support recorded on the official NEAR House of Stake governance page. It is not, however, the final implementation step. The Security Council must review and ratify the outcome, after which a 90-day grace period will begin. Validators will then need to adopt a protocol upgrade before the revised issuance parameter becomes binding.
Less dilution, lower staking income
The economic trade-off is direct. According to the proposal’s calculations, daily issuance would eventually fall from about 89,500 NEAR to approximately 57,300 NEAR. The reduction is intended to limit the flow of newly created tokens into the market, potentially easing long-term sell pressure from participants who receive emissions and later convert them into other assets or fiat currency.
The plan is expected to prevent the issuance of roughly 11.8 million NEAR during the first two years. Over six years, the estimated reduction rises to 66.1 million NEAR. On the proposal’s assumptions, total supply would be about 4.36% lower than it would have been under the existing 2.5% ceiling.
That reduction comes at the expense of staking returns. If the proportion of NEAR committed to staking remains unchanged, projected gross staking yield would decline from 5.268% to 3.372%. The lower reward rate could alter how token holders allocate capital between staking and other uses, particularly for participants whose decisions are driven primarily by nominal yield.
The proposal frames the shift as appropriate for a network that has moved beyond its initial bootstrapping phase. Early-stage networks often use higher emissions to attract validators, encourage token holders to lock assets and fund ecosystem development. As participation and infrastructure mature, those same emissions can become a persistent transfer of value from holders who do not stake to those who do.
NEAR’s governance materials argue that about 57% of the token supply is not staked. Under the previous ceiling, that portion of the supply was exposed to ongoing dilution as newly issued tokens were distributed largely to staking participants and the treasury. Cutting the ceiling is therefore presented as a way to rebalance the network’s monetary policy around a larger and more diverse holder base.
A test of validator incentives
The central question is whether a lower issuance rate can reduce dilution without weakening network security. Staking rewards compensate validators and delegators for committing capital and supporting consensus. If those returns fall too sharply, some participants could decide that staking no longer offers enough compensation for the associated opportunity cost.
The proposal’s gradual structure is designed to make that adjustment more manageable. Rather than removing a large portion of emissions at once, the 24-month ramp gives validators, delegators and treasury planners time to respond. It also allows the network to observe whether participation changes as the reward rate moves toward the lower target.
For token holders, the reform changes the balance between immediate income and long-term supply growth. Stakers would receive less newly issued NEAR, but all holders could benefit from a lower rate of dilution if the reduction supports a more disciplined supply profile. The outcome depends partly on how staking participation evolves. A decline in the staked share could offset some of the intended effect by concentrating rewards among fewer participants.
The treasury would also receive fewer tokens because its 10% share is tied to total issuance. That creates a funding constraint for governance and ecosystem programs, although it may also encourage more selective capital allocation. The decision therefore reaches beyond validator economics and into how the protocol funds development once expansion is no longer the overriding priority.
The move follows an earlier monetary policy adjustment. The Block reported that NEAR reduced its maximum issuance rate from 5% to 2.5% in October 2025. HSP-029 continues that process, using on-chain governance to reduce the flow of new tokens as the network reassesses how much incentive is required to secure and grow the protocol.
The result will offer a measurable test of mature proof-of-stake economics. NEAR is attempting to preserve network participation while redirecting policy toward lower dilution, reduced potential sell pressure and a smaller long-term supply footprint. Approval by the House of Stake is a significant step, but the final impact will depend on Security Council ratification, validator adoption and the willingness of capital to remain staked after rewards fall.
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Read and checked by admin on 11/3/2026
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