NEAR Protocol is weighing a governance proposal to cut its maximum annual token issuance from 2.5% to 1.6%, with the reduction phased in over 24 months. The change would slow dilution for token holders while lowering staking rewards for the participants who secure the network. Issuance is a foundational lever in proof-of-stake design: newly minted tokens supply the rewards that draw the stake securing the network, while every point of emissions also dilutes holders who do not stake.

Sal Ternullo, chief executive of SVRN, opened community discussion of the plan on September 30, with a formal proposal expected the following week. He estimates the schedule would prevent roughly 66 million new NEAR tokens from being issued over six years compared with current policy — a difference he valued at approximately $329 million using September 30 prices.

Under the proposal, existing reward allocations would be preserved, and a transition period would precede the first reductions. Approval would require a vote through the House of Stake, NEAR's delegate-based governance body, followed by adoption via validator upgrades across the network.

Gradual Cuts to Annual Issuance

At the current ceiling, the network creates roughly 89,500 NEAR per day, according to Ternullo. Lowering the cap by 0.9 percentage points amounts to a 36% reduction in the maximum annual issuance rate.

New proposal on the NEAR Governance Forum from @sal_ternullo CEO at @svrn_ai on cutting issuance from 2.5% to 1.6% over 24 months, plus a longer-term direction toward a fixed total supply. The floor is open to validators, House of Stake delegates, and the whole NEAR community.…

— NEAR Protocol (@NEARProtocol) October 1, 2026

The proposal would implement the lower cap through smaller reductions in each epoch, spreading the adjustment across two years. A 90-day grace period would precede the first cut, giving wallets, exchanges, and staking providers time to prepare.

The existing distribution of newly issued tokens would remain intact, with 90% supporting staking rewards and 10% flowing to the protocol treasury. Maintaining that ratio means both groups would receive fewer tokens as total issuance declines.

Under the proposed safeguards, governance could pause the schedule but could not raise issuance again by reversing reductions already completed. That design would give operators an interruption mechanism while keeping implemented cuts locked 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 control. The estimated 66 million tokens represent issuance avoided against the current schedule across the six-year projection.

Writing on September 30, 2026, Ternullo said he intended to seek a vote the following week. He did not announce a confirmed date in that post.

Staking Rewards Projected to Fall as Validators Weigh Costs

The discussion projects annual staking yields falling from roughly 5.4% to 3.5% at the final rate. That implies a yield decline of about 35%, raising cost questions for validators and staking providers.

For a participant staking 1,000 NEAR, Ternullo estimates about 21 fewer tokens earned over two years relative to the existing schedule. Lower rewards could affect validator income, particularly where operating costs already consume a large share of revenue.

The protocol treasury would also collect less token issuance, potentially changing the resources available for ecosystem spending. Under the preserved allocation, its annual share of supply would fall from 0.25% to 0.16%.

Ternullo argues that holders who do not stake would face less dilution once the reductions begin He also says network activity and revenue could eventually support a broader move toward a fixed total supply.

That ambition remains separate from the current issuance proposal. No fixed-supply mechanism has been submitted for approval at this stage, and any future design would require its own community discussion and governance vote.

Community responses have raised concerns about smaller validators and how network security would be funded if issuance were eventually eliminated. Ternullo said a fixed-supply design would need to address security, decentralization, and ecosystem funding before formal consideration.

Even if the proposal clears governance, NEAR validators would still need to adopt the change through the network upgrade process. A governance vote alone would therefore leave one further implementation requirement before the new schedule could begin. For observers, the near-term markers are the publication of the formal proposal text, the timing of any House of Stake vote, and — if it passes — the start of the 90-day grace period before the first reduction takes effect.

Ternullo disclosed that SVRN holds more than 55 million NEAR, with most of those tokens staked. The company also operates validator infrastructure through partners and runs an MPC node within the ecosystem.

Source: Blockonomi