NEAR Protocol’s decentralized governance body, the House of Stake, approved proposal HSP-029 on November 2, 2026, with overwhelming support exceeding 99.96 percent of participating voting power. The measure lowers the network’s maximum annual token issuance rate from 2.5 percent to 1.6 percent through a gradual 24-month ramp. This marks the second major reduction in NEAR’s issuance ceiling in roughly a year, following the earlier move from 5 percent to 2.5 percent, which took effect in late October 2025. The change aims to slow long-term dilution and reduce sell pressure as the network’s early bootstrapping phase is considered largely complete. The proposal, authored by Sal Ternullo, CEO of Nasdaq-listed SVRN, preserves the existing 90/10 distribution of newly issued tokens, 90 percent to staking participants and 10 percent to the protocol treasury, while altering only the single maximum issuance parameter. Implementation requires Security Council review and ratification, followed by an approximate 90-day grace period and a separate validator-adopted protocol upgrade before the linear reduction begins.
Once active, the ceiling declines by roughly 3.75 basis points per month, applied each epoch, until it reaches the 1.6 percent target at month 24. Modeling based on a September 22, 2026, mainnet snapshot projects approximately 11.8 million fewer NEAR issued over the first two years and 66.1 million fewer over six years, leaving circulating supply about 4.36 percent smaller than under the prior 2.5 percent path. Daily issuance is expected to fall from roughly 89,500 NEAR to about 57,300 NEAR at full implementation, with gross staking yields projected to decline from 5.268 percent to 3.372 percent if the measured 42.71 percent staking participation rate holds. HSP-029 represents a deliberate maturation of NEAR’s monetary policy, prioritizing reduced long-term supply growth and lower dilution—fueling active debate across crypto hot topics regarding whether a 36% issuance cut will accelerate Layer-1 value accrual.
Key Takeaways
- House of Stake approved HSP-029 with over 99.96% support to cut max issuance from 2.5% to 1.6%.
- Reduction phases linearly over 24 months at roughly 3.75 basis points per month after the grace period.
- The existing 90/10 split between stakers and treasury remains unchanged.
- Modeling projects 11.8 million fewer NEAR issued in two years and 66.1 million over six years.
- Gross staking yield is expected to fall from about 5.27% to 3.37% at the target rate.
- Full effect still requires Security Council review, a 90-day grace period, and a validator protocol upgrade.
House of Stake Vote Delivers Near-Unanimous Backing for HSP-029
The House of Stake vote on HSP-029 closed on November 2, 2026, with approximately 99.96 to 99.97 percent of participating veNEAR supporting the proposal. Roughly 62 percent of eligible voting power participated, with about 3.29 million veNEAR cast in favor, minimal abstentions around 1,071, and virtually zero opposition. The proposal page marked the measure as succeeded shortly after the ballot concluded. This level of consensus reflects broad alignment among token holders that the network has moved beyond its initial growth phase and can sustain security with a lower issuance ceiling.
The vote itself does not alter protocol parameters. NEAR’s official communication emphasized that the House of Stake result initiates a multi-step process rather than immediate activation. Security Council review must precede formal ratification, after which a roughly 90-day grace period begins. Only after validators adopt the corresponding protocol upgrade does the new issuance schedule become binding and begin its gradual decline. This sequenced approach gives wallets, exchanges, custodians, and staking providers time to update disclosures and systems. The transparent, on-chain nature of the vote and the published ramp schedule allow any observer to verify both the decision and the future supply path.
Gradual 24-Month Linear Ramp Replaces Abrupt Parameter Change
HSP-029 implements the reduction through a smooth, per-epoch adjustment rather than a single step-down. Once the upgrade activates following the grace period, the maximum annual issuance rate declines linearly by approximately 3.75 basis points each month until it reaches exactly 1.6 percent at the end of month 24. The rate is recalculated every epoch, ensuring continuous rather than discrete changes. This design avoids sudden shifts in daily issuance or staking rewards that could disrupt validator economics or market expectations. The proposal explicitly retains the measured 90/10 allocation of new tokens.
Realized issuance has historically run slightly below the formal 2.5 percent ceiling because of transaction-fee burns, and the same dynamic is expected to continue under the lower target. The ramp provides a predictable path that market participants, infrastructure providers, and long-term holders can model with high precision. Quarterly reports are planned to track actual issuance against the published schedule, adding further accountability. By spreading the adjustment across two years, the network reduces the risk of abrupt changes in validator revenue or staking participation while still achieving a meaningful long-term supply reduction.
Projected Supply Impact: 11.8 Million Fewer Tokens in Two Years
Modeling contained in HSP-029, based on a September 22, 2026, mainnet snapshot at block 216,701,043, estimates that the ramp will avoid roughly 11.8 million NEAR of issuance during the first two years compared with a constant 2.5 percent ceiling. Over a six-year horizon, the avoided issuance rises to approximately 66.1 million NEAR, equivalent to a supply about 4.36 percent smaller than the prior path. At the time of the snapshot, total supply stood near 1.307 billion NEAR, with 42.71 percent staked. These figures are projections that assume the measured staking ratio and do not incorporate variable fee burns or future changes in network activity.
Realized outcomes will therefore depend on actual transaction volume and any subsequent governance adjustments. The reduction in new supply is intended primarily to limit long-term dilution and associated sell pressure, particularly from participants who must liquidate rewards to cover operational costs or tax obligations. Holders who do not stake experience the full benefit of slower supply growth without receiving the corresponding rewards. The proposal treats the change as a pure monetary adjustment rather than a spending or subsidy program.
Daily Issuance and Staking Yield Adjustments Under the New Ceiling
Under the current 2.5 percent maximum, daily issuance has averaged approximately 89,500 NEAR. At the 1.6 percent target, the corresponding figure falls to roughly 57,300 NEAR. Gross staking yield, calculated at the September 2026 participation rate of 42.71 percent, is projected to decline from 5.268 percent to 3.372 percent once the ramp completes. Net yields after typical validator commissions would be modestly lower still. The proposal notes that the active validator set is already oversubscribed, with hundreds of candidates waiting for seats, suggesting that security can be maintained at the reduced reward level.
Operator economics will tighten, particularly for smaller pools that rely more heavily on commission revenue. Aggregate modeling indicates that many self-capitalized pools remain viable, though the distribution of outcomes across the set will vary. The gradual nature of the ramp gives operators time to adjust cost structures, commission rates, or capital allocation. Stakers face a trade-off: lower nominal rewards offset by reduced dilution of their existing holdings and potentially firmer long-term token value.
90/10 Split Remains Intact as Core Distribution Rule
HSP-029 deliberately leaves the allocation of newly issued tokens unchanged. Ninety percent continues to flow to staking participants, validators, and delegators, while the protocol treasury receives the remaining 10 percent. On-chain measurements around the time of the proposal showed the treasury share slightly above 10 percent in some periods, but the formal rule stays at the established 90/10 ratio. This continuity preserves the existing incentive structure for securing the network while simply shrinking the absolute volume of tokens distributed under that structure.
The treasury allocation supports protocol development and operations without introducing new spending commitments tied to the issuance cut. By isolating the change to a single parameter, the proposal minimizes complexity and potential unintended interactions with other economic mechanisms such as fee burns or future revenue-sharing designs. Holders and operators can therefore focus analysis on the rate change itself rather than a broader redesign of reward flows. The decision reflects confidence that the current distribution formula remains appropriate even at the lower absolute issuance level.
Remaining Steps Before the Issuance Ramp Begins
Approval by the House of Stake is only the first gate. The Security Council must review the result and complete ratification. A grace period of approximately 90 days follows, intended to give infrastructure providers time to update systems and public disclosures. Only after validators adopt the required protocol upgrade does the new maximum rate become binding and the linear decline commence. Several large operators have already signaled willingness to support the upgrade, but the process remains voluntary until sufficient stake weight adopts it.
Until these steps conclude, the existing 2.5 percent ceiling continues to govern issuance. The multi-stage pathway reduces the risk of technical disruption and ensures market participants receive clear advance notice. Quarterly reporting after activation will allow the community to monitor realized issuance against the published schedule and assess whether further adjustments become necessary. This deliberate sequencing underscores that governance decisions on core parameters still require technical consensus among the validating set.
Second Issuance Reduction Marks Shift From Bootstrapping Phase
The move from 2.5 percent to 1.6 percent follows the earlier reduction from 5 percent to 2.5 percent that validators approved and implemented in late October 2025. Together, the two cuts represent a cumulative 68 percent reduction in the maximum annual issuance rate from the original post-launch level. The author of HSP-029 argued that the network’s early development and growth phase has largely concluded, allowing a lower inflation rate to support long-term security without excessive dilution.
The proposal frames the change as a maturation of monetary policy rather than a reaction to short-term market conditions. By establishing a transparent, multi-year ramp, NEAR creates a verifiable supply schedule that any participant can model independently. The successive reductions also signal that further adjustments remain possible through the same governance process if network conditions or security requirements evolve. This iterative approach contrasts with fixed-supply designs and keeps the issuance parameter under continuous community oversight.
How NEAR’s New Issuance Policy Affects Staking Rewards and Token Holders
Non-staking holders derive significant advantages from HSP-029, primarily through the slower rate of dilution of their relative ownership stakes in the network. Detailed modeling indicates that a non-staker’s proportion of the total supply diminishes at a more gradual pace under the newly proposed 1.6 percent issuance path compared to the previous 2.5 percent ceiling that was in place. While stakers may receive lower absolute rewards in terms of token returns, they still stand to benefit from the overall reduction in supply growth, which can positively impact the value of their holdings over time. According to the proposal’s own calculations, a staker would need to see a modest price appreciation, estimated to be around 1.8 percent over two years under specific assumptions, in order to maintain their economic position relative to the higher-issuance baseline that existed before.
Part of this necessary appreciation could be offset by the smaller supply that results from the new issuance policy itself, which is designed to create a more sustainable economic environment. The overall net effect of these changes will ultimately depend on various factors, including future price performance of the tokens, the impact of fee burns, and the actual levels of staking participation within the network. Given that the changes are being implemented gradually, both non-stakers and stakers will have ample time to reassess their strategies and make informed decisions moving forward. The design of this proposal intentionally avoids the creation of new subsidies or spending programs that could counterbalance the lower issuance rate, ensuring that the adjustment remains purely monetary in nature and focused on long-term stability.
Validator Economics and Oversubscribed Seat Dynamics
At the September 2026 snapshot, the network had 406 active validators and 459 candidates waiting for seats, with a minimum stake requirement around 9,400 NEAR. The proposal argues that this oversubscription demonstrates sufficient economic security even at the lower reward rate. Aggregate operator commissions are projected to cover hardware costs at the reduced yield for many pools, though individual outcomes vary with commission rates and stake size. Self-capitalized pools that treat rewards as return on capital rather than pure operator income face a different calculation.
The gradual ramp allows operators to adjust fee structures, consolidate, or optimize infrastructure costs before the full reduction takes effect. Monitoring of the self-sufficient validator count is expected to provide an ongoing health indicator for the set. The change does not alter the underlying consensus or seat-allocation mechanisms, only the volume of rewards flowing through them.
Transparent On-Chain Governance and Verifiable Supply Path
NEAR’s House of Stake process is designed to place essential economic parameters under a public, on-chain voting mechanism. The HSP-029 ballot, which includes the proposal text, the detailed vote tally, and the subsequent ramp schedule, is made available for independent verification by any interested party. Once the protocol upgrade is activated, the issuance of tokens will decline gradually, epoch by epoch, according to a published formula that is predetermined, rather than relying on discretionary decisions made by individuals. Additionally, quarterly reports will be generated to compare the realized issuance with the target path, thereby creating an ongoing mechanism for accountability.
This level of transparency significantly reduces information asymmetry that often exists between large holders, operators, and smaller participants in the ecosystem. The approach also allows market pricing to effectively incorporate the known future supply trajectory well in advance of each incremental reduction in issuance. By clearly separating the governance vote from the technical steps required for activation, the network is able to maintain both democratic legitimacy and operational caution, ensuring that all stakeholders can participate in a fair and informed manner.
Market and Liquidity Considerations During the Transition
The extended multi-month grace period, followed by a carefully structured 24-month ramp, provides ample time for exchanges, custodians, and liquidity providers to thoroughly update their systems and refine their risk models. This gradual decline in daily issuance is designed to occur steadily over time, rather than in a single, abrupt step, which effectively limits the potential for sudden and disruptive changes in the dynamics of circulating supply. Importantly, since the 90/10 split remains constant throughout this process, the overall composition of new tokens entering the market will not change; rather, it is only the volume of these tokens that will be affected.
Fee burns will continue to offset a portion of gross issuance, prompting long-term allocators to manage positioning directly across the NEAR/USDT spot market as daily sell pressure permanently declines. The strategic combination of lower long-term issuance and a verifiable issuance schedule is anticipated to significantly reduce one of the persistent sources of sell pressure in the market. However, it is essential to note that actual price outcomes will still depend on a variety of broader factors, including overall demand, usage patterns, and macroeconomic conditions. Infrastructure providers will be able to model this path with a high degree of confidence, allowing them to make informed adjustments to their inventory or product parameters as necessary.
Conclusion: Tokenomics Direction After Full Implementation
Once the 1.6 percent target is reached, NEAR will operate under a materially lower maximum inflation rate than at any prior stage of its history. The cumulative effect of the two successive cuts is expected to produce a supply trajectory several percentage points below the path that would have prevailed under the original 5 percent ceiling. The protocol retains the ability to adjust the parameter again through the same House of Stake process if security requirements, staking participation, or network economics shift.
The emphasis on a transparent, programmatically enforced schedule aims to make long-term supply dynamics more predictable for builders, investors, and operators. Whether the lower rate proves sufficient to maintain robust security and participation will be observable through staking ratios, validator counts, and realized issuance data over the coming years.
FAQs
What exactly does HSP-029 change in NEAR’s tokenomics?
HSP-029 lowers only the maximum annual issuance rate from 2.5 percent to 1.6 percent. It leaves the 90/10 split of new tokens between stakers and the treasury, the emissions mechanism, and all other protocol parameters unchanged. The reduction occurs gradually over 24 months after the required technical steps are completed.
When will the lower issuance rate actually begin?
The House of Stake vote is complete, but the change is not yet binding. Security Council review and ratification must occur first, followed by an approximate 90-day grace period and a validator-adopted protocol upgrade. Only after the upgrade activates does the linear ramp start.
How much less NEAR will be issued under the new schedule?
Modeling projects roughly 11.8 million fewer NEAR issued over the first two years and 66.1 million fewer over six years compared with a constant 2.5 percent ceiling. These figures are estimates based on a September 2026 snapshot and will vary with actual network conditions and fee burns.
Will staking yields drop immediately?
No. Yields decline only as the issuance ceiling itself declines during the 24-month ramp. At the final 1.6 percent rate, gross yields are projected at approximately 3.37 percent if staking participation remains near the measured 42.71 percent level.
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