The governance body of NEAR Protocol proposed to reduce the annual token issuance cap by 36%

The NEAR Protocol governance body House of Stake passed the HSP-029 proposal with approximately 99.96% support, with a voting power of 3.29 million veNEAR. The proposal aims to gradually reduce the annual token issuance cap from 2.5% to 1.6% over 24 months, with an average monthly decrease of 0.0375 percentage points. The proposal was initiated by Sal Ternullo, CEO of the Nasdaq-listed company SVRN, and only adjusts one protocol parameter, while the existing distribution ratio remains unchanged: 90% of newly issued tokens are allocated to staking participants, and 10% go to the treasury.

The proposal also requires approval from the House of Stake Security Committee and will be implemented after a preparation period of about 90 days and once validators complete the protocol upgrade. The model estimates that, based on the original issuance cap, approximately 11.8 million NEAR could be issued less in the first two years after implementation, and about 66.1 million less over six years. After full implementation, the daily issuance is expected to decrease from about 89,500 to 57,300; under the assumption of similar staking participation rates, the gross staking yield is expected to drop from 5.268% to 3.372%, and validator commission income is expected to decrease by 36%.