NEAR's House of Stake has approved a proposal to reduce the token's maximum annual issuance rate from 2.5% to 1.6%, according to Cointelegraph's November 3 update. The official governance forum lists HSP-029 as succeeded.
Validators must independently adopt the protocol upgrade before the change becomes binding.
A Slower Production Schedule, With Adoption Still Ahead
HSP-029 sets out a 24-month reduction applied each epoch, following a grace period of one full quarter after ratification. The proposal retains the allocation of issuance between staking participants and the treasury, at 90% and 10%, respectively.
The endpoint is 0.9 percentage points below the current maximum. Measured against the starting rate, that is a 36% cut. This reduction affects new issuance, not existing NEAR balances. At 1.6%, issuance would continue adding tokens to the supply at a slower rate.
The full difference between the two annual rates arrives at the endpoint. During the first year, the reduction would still be underway, so calculating cumulative issuance savings requires accounting for the path between those rates. Multiplying the final reduction by two years would overstate the savings during the transition.
The proposal assigns quarterly transparency reporting to track actual issuance against the schedule and assess validator-set health.
Lower Dilution Comes With Fewer Reward Tokens
Because the proposal preserves the allocation of issuance, staking participants would receive the same share of a smaller pool of newly created tokens.
For a holder who does not stake, slower issuance means their unchanged balance loses ownership share more slowly. For a staker, the comparison includes both reduced dilution and fewer reward tokens. A lower quoted staking yield can accompany a lower dilution rate; the reward percentage alone cannot describe the change in a holder's economic position.
Reducing issuance can also compress validator operators' reward-funded income, leaving them with fewer tokens to cover operating costs. The phased approach gives participants time to adjust to that pressure.
Lower issuance changes the supply path, but it cannot establish a price target or determine whether demand will rise enough to offset fewer staking rewards.
Overview
NEAR governance has approved a 24-month reduction in maximum annual issuance from 2.5% to 1.6%, retaining the 90% allocation to staking participants and 10% to the treasury. Implementation requires validator adoption, with the reduction scheduled to begin after a full-quarter grace period following ratification.
