NEAR Protocol's on-chain governance body, the House of Stake, has approved a proposal to reduce the network's annual token issuance ceiling from 2.5% to 1.6% over the next 24 months. The decision, announced by NEAR on Nov. 2, is intended to slow the creation of new tokens and lower the network's long-term inflation rate.

The proposal, identified as HSP-029 and published on the House of Stake governance site, outlines a gradual reduction rather than an immediate change to token issuance. The governance vote does not automatically activate the new schedule, however. Additional approval and implementation procedures must be completed before the revised limit becomes binding.

Under the proposal, the annual issuance ceiling would decline to 1.6% over two years, potentially reducing the number of new tokens entering circulation and changing staking rewards across the network. The arrangement gives NEAR token holders a direct vote on core monetary parameters, with any change rolling out on a published schedule. Because most newly issued tokens are directed to stakers, the ceiling effectively caps the pool of issuance-funded staking rewards the network distributes each year.

Governance Approval Is Only the First Step

The House of Stake vote represents an important step in the network's governance process, but several procedures remain before implementation. According to NEAR, the House of Stake's Security Council must review the voting outcome before formal ratification. A grace period of approximately 90 days will then follow, allowing the network to prepare for the proposed adjustment.

The final change will require validators to adopt the revised issuance schedule through a protocol upgrade. Governance approval alone is therefore insufficient to activate the new monetary policy.

Neither the announcement nor the available proposal documentation disclosed a final voting count or a detailed tally.

HSP-029 was authored by Sal Ternullo, chief executive of Nasdaq-listed SVRN. The proposal recommends reducing the issuance ceiling by approximately 3.75 basis points each month, a pace that accounts for the full 0.9 percentage point step-down across the 24-month window, with the adjustment recalculated every network epoch rather than implemented through predetermined fixed reductions. Under the proposed schedule, the annual issuance limit would gradually decline until reaching 1.6% at the end of the 24-month period.

NEAR confirmed the outcome in a post on X:

NEW PROPOSAL PASSED

House of Stake, NEAR's decentralized onchain governance body, has voted to lower NEAR's maximum annual issuance from 2.5% to 1.6%, phased in over 24 months.

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.

For NEAR's tokenomics, that means lower long-term issuance and a supply schedule anyone can verify.

What happens next:

✦ The House of Stake Security Council reviews the result before ratification
✦ A ~90-day grace period follows ratification
✦ Validators adopt the change through a protocol upgrade, which makes it binding
✦ Token issuance then steps down every epoch, reaching 1.6% at month 24
✦ Quarterly reports track realized issuance against the schedule

Full proposal:

— NEAR Protocol (@NEARProtocol) November 2, 2026

The original post is available on X: https://x.com/NEARProtocol/status/2117338455189385533?ref_src=twsrc%5Etfw

Lower Issuance Would Slow Supply Growth

The proposal estimates that the revised monetary policy could significantly reduce the number of new NEAR tokens issued over time. According to Ternullo's projections, the network could issue approximately 11.8 million fewer NEAR tokens over two years and 66.1 million fewer over six years compared with the existing issuance trajectory. That would leave the token supply approximately 4.36% below the level projected under the current policy.

The proposal also provides estimates of the potential impact on staking returns. Assuming current staking participation remains unchanged, gross staking yield could decline from approximately 5.27% to 3.37% once the new issuance ceiling reaches its target.

The reduction could also create financial pressure for some network operators. The proposal estimates that 24 validator pools may no longer cover their operating costs under the lower issuance rate, using the token price recorded in September for its calculations.

Based on the total supply measured on Sept. 22, the existing 2.5% issuance ceiling corresponds to approximately 89,500 new NEAR tokens per day. Under the proposed 1.6% ceiling, daily issuance would decline to approximately 57,300 tokens. That represents a potential reduction of around 32,200 newly issued NEAR tokens per day once the transition is complete, a decline of roughly 36% in daily issuance.

Staking and Treasury Allocation Split Stays the Same

Despite the proposed reduction in overall issuance, the distribution structure for newly created tokens would remain unchanged. Under the existing arrangement, 90% of newly issued NEAR tokens are allocated to stakers, while the remaining 10% goes to the NEAR treasury.

Lower issuance would still reduce the total number of tokens distributed to both groups, which could affect validator economics and the returns available to participants securing the network.

SVRN Discloses Its NEAR Holdings

The proposal also includes disclosures concerning the financial interests of its author and his associated company. Ternullo disclosed that SVRN holds approximately 55 million NEAR, with more than 90% of those holdings staked. The company's position represents over 8% of the network's total staked NEAR, and SVRN indicated its intention to support the proposal.

Ternullo acknowledged that reducing issuance would lower the staking yield earned on the company's own holdings.

If fully implemented, HSP-029 would mark the network's second issuance-ceiling cut in as many years. NEAR previously reduced its annual issuance ceiling to 2.5% in 2025 through a similar validator-led protocol upgrade. The latest proposal follows discussions about alternative monetary policies after NEAR co-founder Illia Polosukhin withdrew a Sovereign Fund proposal in August, citing concerns about risks the protocol should avoid assuming.

Quarterly Issuance Reports Planned

Following implementation, NEAR intends to publish quarterly reports comparing actual token issuance against the revised schedule. These updates are expected to provide greater transparency into the network's monetary policy and help participants monitor whether the reduction is progressing as planned.

The proposal's eventual impact will depend on validator adoption, staking participation, and the financial sustainability of network operators under the lower issuance structure.

Source: CoinTrust