NEAR Protocol Governance Discussion: Reducing Issuance to 1.6% and the Path to a Fixed Supply
A major governance proposal has been introduced on the NEAR Governance Forum by Sal Ternullo, CEO of SVRN AI. The proposal outlines a two-phase plan to overhaul NEAR’s tokenomics, starting with a gradual reduction in token issuance from 2.5% to 1.6% over a 24-month period, while opening research toward a permanent fixed supply cap.
The proposal is now open for public feedback across the NEAR community, validators, and the House of Stake delegates prior to an upcoming vote.
Part 1: Reducing Annual Issuance from 2.5% to 1.6%
The primary proposal introduces a single-parameter adjustment designed to curtail daily token inflation while preserving core staking incentives.
Key Details of the Reduction:
- 24-Month Epoch Ramp: Maximum annual issuance will decrease incrementally each epoch over two years, transitioning the target rate from 2.5% down to 1.6%.
- Treasury and Staker Split: The existing 90/10 distribution ratio between stakers and the protocol treasury remains unchanged.
- Supply Impact: Over six years, the gradual issuance decrease avoids roughly 66 million NEAR in new emissions—equivalent to approximately $329 million in supply at present valuations.
- Impact on Staking Yield: Staking yields are projected to shift from ~5.4% today to ~3.5% at the 1.6% target rate. Non-staking holders benefit immediately from reduced daily dilution.
Precedent and Execution Roadmap
The proposal highlights NEAR’s October 2025 halving (from 5% to 2.5%), during which active validator counts remained stable and eventually expanded from 342 to over 400. Following an anticipated House of Stake vote, validators will independently adopt the change via standard node software upgrades, accompanied by a proposed 90-day grace period for exchanges and staking providers to adjust terms.
Part 2: Long-Term Vision for a Fixed Total Supply
Beyond the immediate issuance reduction, SVRN AI outlined a research initiative aimed at establishing a fixed total supply limit for NEAR, ending annual monetary policy adjustments entirely.
Core Strategic Rationale:
- Permanent Network Ownership: A hard cap ensures every NEAR token represents an un-dilutable, permanent share of the underlying network.
- Self-Sustaining Economic Model: As protocol revenue from Chain Signatures, Intents, confidential compute, and TEE infrastructure grows, network security would transition toward fee-funded models rather than continuous issuance.
- Store-of-Value Architecture: The long-term direction aims to position NEAR as a permissionless, capture-resistant store of value.
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The formal Phase 1 proposal is scheduled for an official governance vote next week, with community discussions ongoing on the NEAR Governance Forum.
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