Mentioned in This Article
1. NEAR issuance cut: what the House of Stake decided
NEAR Protocol's onchain governance body, the House of Stake, has voted to lower the network's annual issuance ceiling from 2.5% to 1.6%, with the reduction phased in over 24 months. NEAR announced the outcome on X on November 2, 2026. The vote does not change anything on its own, because several further steps must be completed before the schedule can start.
The measure, labeled HSP-029, is a governance proposal about how many new NEAR tokens the network may create each year. Issuance is the process by which a proof-of-stake blockchain mints fresh tokens and distributes them, mainly as rewards to the participants who secure the network. A lower ceiling means fewer new tokens enter circulation over time.
The announcement from NEAR did not include a vote count, and the copy of the proposal page that was reviewed for this report also listed no tally. That leaves open how wide the margin was, a detail that observers of governance votes usually look at to judge how settled a decision is.
For readers new to the topic, the decision belongs to the broader field of token economics, often shortened to tokenomics. Every proof-of-stake network must decide how quickly to expand its supply, because the rate shapes both the incentives for securing the chain and the long-term value held by existing token owners. Setting a ceiling, rather than a fixed rate, lets the network adjust within a defined limit while still giving participants a predictable upper bound.
2. What still has to happen before the change takes effect
The proposal states plainly that it cannot take effect on a House of Stake vote alone. The Security Council must first review the result, and ratification follows. After that, a grace period of roughly 90 days applies, giving participants time to prepare for the new schedule.
The final hurdle is technical. Validators, the operators who run the nodes that produce and confirm blocks, must adopt the change through a protocol upgrade. Only after that upgrade is in place would the 24-month ramp begin. In practice this means the first reduction in the ceiling is still some months away, and the full 1.6% level would be reached only about two years after the ramp starts.
This layered approval structure is a common feature of networks that separate token-holder governance from the software that actually runs the chain. Holders can express a preference, but validators decide whether to run code that implements it. Validators therefore have the final say, which is why the headline result is best read as a mandate rather than a completed change.
The sequence also explains why the announcement carried the qualifier that the result is pending validator adoption. A vote by holders signals intent, the Security Council review and ratification add an institutional check, the grace period gives operators notice, and the protocol upgrade makes the rule real. Each stage is a point at which the plan could be delayed or changed, so the timetable for the first actual reduction remains uncertain.
3. How does the new issuance schedule work?
Once active, the issuance cap would fall by about 3.75 basis points per month. The figure is recalculated every epoch, a fixed period of network time, rather than in occasional fixed steps, so the decline would be gradual and continuous. By month 24 the ceiling would reach 1.6%.
The way new tokens are divided would stay the same. Under the proposal, newly issued NEAR would still be split 90% to stakers and 10% to the NEAR treasury. The change therefore affects the size of the pool being shared, not the proportions in which it is shared.
To put the ceiling in daily terms, a calculation based on the total supply measured on September 22 shows that a 2.5% annual cap equals about 89,500 new NEAR per day. The 1.6% target works out to about 57,300 per day. Once the ramp is complete, that is roughly 32,200 fewer new tokens each day than under the current ceiling. These daily numbers are derived estimates rather than figures stated in the proposal.
Because the reduction is spread across 24 months rather than applied at once, the network avoids an abrupt change in rewards. Operators and delegators can watch the effective rate decline month by month and adjust their costs, delegation choices or staking positions accordingly. A gradual slope is generally easier for a validator set to absorb than a single step down, which may improve the odds that the upgrade is adopted.
4. Projected effects on supply and staking yield
The proposal's author, Sal Ternullo, supplied modeling of the consequences. He is the chief executive of SVRN, a Nasdaq-listed company. His projections show 11.8 million fewer NEAR issued over two years and 66.1 million fewer over six years. By the end of that longer horizon, total supply would sit 4.36% below the level implied by the current path.
The same modeling points to a trade-off for those who stake. At the present level of staking participation, gross staking yield would be about 3.37% at the target issuance rate, compared with roughly 5.27% today. Staking yield is the return a token holder earns for locking tokens to help secure the network, and it is largely funded by new issuance.
Lower issuance reduces dilution, meaning existing holders see their share of the total supply shrink more slowly. The cost is that validators and delegators earn less in token terms. Whether the lower supply growth offsets the lower rewards depends on demand for the token, which no governance vote can determine.
It is worth separating two ideas that are easy to merge. Lower issuance reduces the rate at which new supply is created, which is a statement about the token's inflation. It does not by itself raise the price or guarantee any particular market outcome. The modeling in the proposal describes supply and yield, and those are the quantities the figures above measure.
5. Which validators could be squeezed
The proposal itself acknowledges that the lower rewards would not be painless for every operator. It estimates that 24 validator pools would no longer cover their costs at the new rate, using the September token price as the reference point. Running a validator involves fixed expenses such as servers, monitoring and staff, so a drop in rewards can push smaller or less efficient operators below break-even.
That estimate matters because validators are the group that must approve the change through the protocol upgrade. Operators who stand to lose money have a direct reason to hesitate, while larger operators with lower costs may be better placed to accept the new schedule. The outcome of the adoption stage will therefore reveal how the validator community weighs network-wide supply discipline against its own margins.
The sensitivity of the calculation to the token price is also worth noting. The estimate of 24 affected pools relies on the September price. A higher NEAR price would raise the dollar value of each reward and ease the pressure, while a lower price would intensify it.
6. Disclosures and background on the proposal
The proposal contains a conflict-of-interest disclosure. SVRN holds about 55 million NEAR, of which more than 90% is staked, representing more than 8% of all staked NEAR. SVRN intended to vote in favor of the measure. Ternullo wrote that the reduction also lowers the yield on SVRN's own stake, so the company would bear part of the cost of the change it supported.
The document also places the vote in a longer history. It says NEAR already halved issuance to 2.5% in 2025, using the same validator upgrade path that the new proposal would rely on. The current vote is therefore a second reduction through an established route and not a first attempt at an unfamiliar mechanism.
Ternullo presented HSP-029 as one of the alternatives that emerged after NEAR co-founder Illia Polosukhin withdrew a Sovereign Fund proposal in August. Polosukhin cited risks that the protocol should not internalize when he pulled that plan. The issuance cut can be read as part of the community's continued search for a way to address supply questions after that withdrawal.
Disclosures of this kind are a routine safeguard in onchain governance, where large holders can influence outcomes directly. By stating its holdings, its staking share and its voting intention in the proposal text, the author allowed other voters to weigh the argument knowing who stood to be affected. The disclosure also notes that the proposal cuts into the author's own returns, which is relevant context for how the measure should be read.
7. What comes next for NEAR's issuance schedule
The next milestone is the Security Council's review, followed by ratification and the grace period of about 90 days. No dates for those steps were given in the announcement. After the grace period, validators will have to adopt the protocol upgrade before the 24-month ramp can begin.
NEAR also said it would publish quarterly reports once the ramp is live. These reports are intended to compare realized issuance with the published schedule, giving holders a way to check that the network is following the path that was approved. For a change that unfolds over two years, regular reporting of that kind provides a running test of whether the plan is being carried out as voted.
For token holders, the practical questions are how many validators adopt the upgrade, how quickly they do so, and how staking participation responds to a lower yield. If participation falls as returns shrink, the yield figures from the modeling could differ from the outcome. Until the upgrade is adopted, the existing 2.5% ceiling remains the rule.
Readers following the story should watch for three developments: the publication of a vote tally, an announced date for the Security Council review, and any statement from validator operators about whether they plan to adopt the upgrade. Each would clarify how firmly the community stands behind the 1.6% target and how soon the new schedule could begin.