NEAR's House of Stake governance body passed proposal HSP-029, reducing the maximum annual token issuance rate from 2.5 percent to 1.6 percent—a 36 percent cut to the prior ceiling.
The reduction takes effect over a 24-month implementation window, compressing the network's annual supply growth from 2.5 percentage points to 1.6 percentage points. This 0.9 percentage point contraction creates measurable deflationary headwind if demand remains flat or grows.
The change reflects a core tradeoff in protocol design: lower issuance tightens token scarcity but reduces validator rewards. Validators currently earn newly minted NEAR as compensation for securing the network. A 36 percent cut to the issuance ceiling compresses that incentive pool, requiring the governance body to weigh security costs against long-term holder value.
HSP-029 directly modifies a foundational economic parameter of the NEAR protocol. Implementation through 2028 will establish the baseline supply trajectory for the next two years, with structural effects extending beyond the phase-in period.
