NEAR Protocol's House of Stake approved HSP-029 on November 2, clearing the way for a gradual reduction in the network's maximum annual NEAR issuance from 2.5% to 1.6%. The cut will be phased in over 24 months rather than taking effect immediately.

Support reached 99.97% of participating veNEAR, the vote-escrowed token used in House of Stake governance. About 62% of eligible voting power took part in the vote, and 32 accounts backed the measure. veNEAR, acquired by locking NEAR, ties voting weight to tokens committed for governance.

Gradual Schedule for Lower Issuance

Under the approved plan, the annual issuance ceiling will fall by roughly 0.0375 percentage points each month, with smaller adjustments applied at each network epoch until the rate reaches 1.6%. Once fully phased in, the ceiling will equal roughly 64% of today's maximum, capping how quickly new supply enters circulation.

The proposal leaves token distribution unchanged: stakers will continue to receive 90% of newly issued tokens, while the protocol treasury receives the remaining 10%. Sal Ternullo, chief executive of SVRN, submitted the proposal.

Projected Supply and Staking Effects

The proposal estimates that NEAR will issue 11.8 million fewer tokens over two years than under the existing ceiling. Over six years, it projects 66.1 million fewer tokens, representing 4.36% less supply than the baseline.

At the final rate, modeled daily issuance falls from about 89,517 tokens to 57,291. Gross staking yields could decline from 5.27% to 3.37%, assuming the share of staked NEAR remains unchanged. As a gross figure, the yield counts staking rewards before costs such as validator commissions are deducted.

Staking rewards are already linked to other activity on the network. NEAR AI already uses staking rewards to pay for computing, and in October, more than one million NEAR were staked for AI services.

Validator Income and Prior Cuts

The proposal notes that 24 of 405 validator pools might struggle to cover running costs from staking rewards alone. The estimates are based on network data collected in September 2026. Because 90% of newly issued tokens flow to stakers, a lower issuance ceiling leaves a smaller reward pool from which validator running costs are covered.

Validator rewards have also drawn attention on other networks, though for different reasons. In October, Ethereum developers patched software risks affecting validator rewards; those fixes addressed security problems rather than token issuance.

HSP-029 would extend a supply adjustment made a year earlier. NEAR Protocol lowered maximum issuance from 5% to 2.5% in October 2025, and the new proposal continues that reduction without setting a fixed token supply.

Security Review and Rollout Steps

The approved vote still requires review by the House of Stake Security Council. Once ratified, a transition period of roughly 90 days will give exchanges, wallets, custodians, and staking services time to prepare. Validators must then adopt the protocol upgrade before the new issuance schedule can begin. Until ratification and validator adoption are complete, the existing 2.5% ceiling remains in effect.

The proposal also calls for quarterly reports comparing actual issuance with the planned rate and monitoring validator participation.

Supply management practices differ across the industry. In October, BNB Chain completed another quarterly token burn, permanently removing tokens from circulation rather than reducing the rate of new issuance.