NEAR Protocol’s House of Stake decentralized community group has voted in favor of a measure to reduce the blockchain’s peak yearly token creation rate from 2.5% down to 1.6% across a span of 24 months.
HSP-029, which secured strong backing during Monday’s vote, preserves the current 90/10 allocation of newly minted coins between validators staking assets and the ecosystem treasury, modifying only that specific protocol variable. The actual distribution mechanism itself remains unchanged.
Following deployment, the issuance limit decreases linearly each epoch by approximately 3.75 basis points every month, achieving the 1.6% objective by month 24. The main purpose is to curb dilution and minimize prolonged selling pressure on the NEAR asset NEAR Protocol (NEAR), as the network explained that its early initialization phase is largely complete.
The documentation pointed out that the active validator group is currently overcapacity, and maintaining issuance at previous levels shifts economic value from the roughly 57% of circulating supply that remains unstaked toward those participating in staking, while simultaneously increasing market selling pressure.
“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,” NEAR stated via an X post. “For NEAR’s tokenomics, that means lower long-term issuance and a supply schedule anyone can verify.”
The initiative estimates this transition will prevent approximately 11.8 million NEAR from being minted during the initial two years and 66.1 million over a six-year horizon, resulting in a total circulating supply that is roughly 4.36% lower compared to the prior 2.5% cap. Daily creation volume will drop from near 89,500 NEAR down to 57,300 NEAR once fully realized, whereas gross staking yield is anticipated to drop from 5.268% to 3.372% throughout the timeframe, provided the staking participation percentage observed in September stays constant.
For the measure to become completely active, the House of Stake Security Council must first evaluate the outcome prior to formal endorsement. A 90-day transition period comes next, after which validator operators are required to implement a software update for the alteration to take legal effect on-chain. Previously, NEAR lowered its ceiling from 5% to 2.5% back in October 2025.
Originally published at https://www.theblock.co/news/defi/2026-11-03-near-governance-approves-proposal-to-cut-token-issuance-432378.
