NEAR Protocol Vote Seeks a Lower Issuance Cap
NEAR Protocol announced a vote on an issuance proposal that would “cut issuance from 2.5% to 1.6% over 24 months.” Under the schedule, the cap would decline with each epoch at a pace equivalent to roughly 3.75 basis points per month. A grace period is intended to give wallets, exchanges, custodians, and staking providers time to update their disclosures.
The proposal, identified as HSP-029, would change the distribution of newly issued $NEAR among token holders, staking providers, and validators. For holders who do not stake, the change means slower dilution without a reduction in the staking income they currently receive. Stakers would earn fewer new tokens, while validators would collect less commission revenue.
Lower Issuance Changes Validator and Staking Economics
HSP-029 estimates that validator operators without their own $NEAR holdings would lose roughly 36% of their commission revenue at the target issuance rate. Their actual income would also depend on delegated stake and fees. The proposal acknowledges that lower yields could discourage participation in staking, creating a potential concern for the availability of stake and the future validator set.
The projected staking yield is not guaranteed to fall at the same rate as issuance. If fewer $NEAR tokens are staked, the staking allocation would be divided among fewer tokens, raising the yield for those that remain. The proposal therefore balances a reduction in new-token distribution against the possibility that lower staking participation could concentrate rewards among a smaller group.
SVRN Backs the Proposal
Ternullo’s disclosure says SVRN holds approximately 55 million $NEAR, with more than 90% of those tokens staked, and intends to vote in favor of HSP-029. The disclosed position gives SVRN a direct interest in the proposal’s effects on staking rewards, validator commission revenue, and the pace at which new $NEAR enters circulation.
Governance Plan Builds on an Earlier Issuance Overhaul
The vote extends an earlier overhaul of $NEAR’s issuance model. As The Defiant reported in October 2025, $NEAR’s core team placed a reduction from 5% to roughly 2.5% into an upgrade despite an unsuccessful earlier community vote, prompting objections over governance. Validator adoption remained a separate requirement at that stage.
HSP-029 explicitly retains that separate validator-adoption step. Its implementation plan also calls for quarterly reports comparing actual issuance with the proposed schedule and tracking the health of the validator set. Those reporting requirements would provide periodic checks on whether implementation is following the planned reduction and whether validator participation remains sufficient.
Why This Matters
HSP-029 shifts the economic balance among non-staking $NEAR holders, stakers, and validators. Slower issuance would benefit holders who currently receive staking income without staking by reducing dilution, but the same change would lower new-token rewards for stakers and commission income for validators. The proposal’s own estimates also show that the impact would vary according to delegated stake, fees, and how many validators remain active.
The broader context is the governance debate that followed the earlier move to reduce issuance before a community vote succeeded. By retaining a separate validator-adoption requirement and adding quarterly implementation reports, HSP-029 addresses more than the numerical cap. The announced vote is the next decision point, while implementation would still depend on validator adoption and ongoing monitoring of issuance and network participation.
Frequently Asked Questions
What does the NEAR Protocol’s HSP-029 proposal change?
HSP-029 would reduce the $NEAR issuance rate from 2.5% to 1.6% over 24 months. The cap would decline each epoch at a pace equivalent to roughly 3.75 basis points per month, with a grace period for wallets, exchanges, custodians, and staking providers to update disclosures.
How would the proposal affect $NEAR holders, stakers, and validators?
Non-staking holders would experience slower dilution without losing staking income they currently receive. Stakers would receive fewer new tokens, and validators would earn less commission revenue. The proposal estimates a roughly 36% commission loss for operators without their own $NEAR holdings at the target rate, although delegated stake and fees would influence actual income.
Why might staking yields remain stable or rise despite lower issuance?
Lower issuance could reduce staking participation, but fewer staked tokens would mean that the staking allocation is divided among a smaller number of tokens. That dynamic could raise the yield for remaining stakers. The proposal presents its yield projection as conditional rather than guaranteed.
