NEAR proposal slashes yield by 36%, dividing network validators

The NEAR blockchain’s total supply increased by approximately 2.69 million tokens between Sept. 22 and Oct. 22, a rise of 0.20614%.

To address this growth, a governance proposal, HSP-029, seeks to cut the maximum annual issuance rate from 2.5% to 1.6%.

The reduction represents a 36% decrease from the current cap, which is still in effect on version 86 of the protocol.

Validators would need to adopt a protocol upgrade to activate the new cap, which would be adjusted each epoch.

Implementation timeline

If ratified, the proposal would trigger a 90-day grace period before the 24-month ramp-down begins.

Under this schedule, the new 1.6% cap would be reached roughly 27 months after ratification.

The change would maintain the existing allocation of 90% of issuance to staking participants and 10% to the treasury.

The proposal’s authors note that while slower dilution is intended, the effect on price depends on market demand and valuation.

Impact on staking rewards

As of Oct. 22, about 45.27% of the total NEAR supply was staked, with 395 active validators.

Using a fixed participation rate of 45.27%, the simple annual reward rate for stakers would drop from approximately 4.97% at the current cap to 3.18% at the new target.

This reduction in rewards comes as the network continues to be inflationary in terms of total supply.

The proposal follows a previous issuance debate in June 2025, which sought to reduce the cap from 5% to 2.5%.