TLDR:
- NEAR Protocol proposes reducing maximum annual token issuance from 2.5% to 1.6% over 24 months, limiting future supply growth.
- The schedule could prevent approximately 66 million new NEAR tokens over six years, worth $329 million at September 30 prices.
- Projected staking yields could decline from about 5.4% to 3.5%, while stakers and the treasury retain their existing 90/10 allocation.
- A proposed 90-day grace period would precede reductions, with a House of Stake vote and validator upgrades required for implementation.
NEAR Protocol is considering a governance plan to lower maximum annual token issuance from 2.5% to 1.6%. The reduction would unfold over 24 months, easing dilution while cutting staking rewards for participants securing the network.
SVRN chief executive Sal Ternullo opened community discussions on September 30, with a formal proposal expected next week. He estimates the schedule would prevent around 66 million new tokens over six years, compared with current policy.
The proposal would preserve existing reward allocations and include a transition period before reductions begin. Approval would require a House of Stake vote followed by adoption through validator upgrades.
NEAR Protocol Proposes Gradual Cuts to Annual Issuance
At the current ceiling, the network creates roughly 89,500 NEAR daily, according to Ternullo. Lowering the cap by 0.9 percentage points represents a 36% reduction in the maximum annual rate.
The NEAR Protocol proposal would implement smaller reductions during each epoch, spreading the adjustment across two years. A proposed 90-day grace period would precede the first cut, allowing wallets, exchanges, and staking providers to prepare.
The existing distribution would remain intact, with 90% supporting staking rewards and 10% flowing into the protocol treasury. Preserving that ratio means both groups would receive fewer tokens as total token issuance declines.
Governance could pause the schedule under the proposed safeguards but could not increase issuance by reversing completed reductions. That rule would give operators an interruption mechanism while keeping reductions already implemented in place.
NEAR Protocol previously halved its issuance ceiling from 5% to 2.5% in October 2025. Ternullo presents the new target as a further step toward tighter long-term supply controls.
The estimated 66 million tokens represent new issuance avoided against the current schedule across the six-year projection. Ternullo valued that projected difference at approximately $329 million using prices when he published the discussion.
Ternullo said on September 30, 2026, he intended to seek a vote the following week. He did not announce a confirmed date in that post.
Staking Rewards Face Reduction as Validators Review Costs
The NEAR Protocol discussion projects annual staking yields falling from roughly 5.4% to 3.5% at the final rate. That implies a yield decline of around 35%, raising cost questions for validators and staking providers.
For someone staking 1,000 NEAR, Ternullo estimates about 21 fewer tokens earned over two years against the existing schedule. Lower staking rewards could affect validator income, particularly where operating costs already consume a large share of revenue.
The NEAR Protocol treasury would also collect less token issuance, potentially changing the resources available for ecosystem spending. That allocation implies its annual share would fall from 0.25% to 0.16% of supply.
Ternullo argues that holders who do not stake would experience less dilution once reductions begin. He says network activity and revenue could eventually support a broader move toward a fixed total supply.
That ambition remains separate from the issuance proposal, with no fixed supply mechanism submitted for approval in this phase. Any later design would need its own community discussion and governance vote.
Community responses have raised concerns about smaller validators and how security would be funded if issuance eventually ends. Ternullo said a fixed supply design would need to address security, decentralization, and ecosystem funding before formal consideration.
NEAR Protocol validators would still need to adopt an approved change through the network upgrade process. A governance vote alone would therefore leave a further implementation requirement before the schedule could begin.
Ternullo disclosed that SVRN holds more than 55 million NEAR, with most of those tokens staked. The company also runs validator infrastructure through partners and operates an MPC node within the ecosystem.