NEAR Proposes 36% Token Issuance Cut Amid Lower Demand

NEAR Protocol is considering a proposal to reduce the amount of new NEAR tokens entering circulation each year. The current rate is 2.5%, and the proposal would lower it to 1.6% over 24 months. This change could prevent about 66 million NEAR from entering circulation over six years, which would be worth roughly $329 million based on the price used in the proposal.

The proposal was introduced by Sal Ternullo, CEO of SVRN, through the NEAR Governance Forum. Ternullo said that NEAR has reached a point where it may not need to issue as many new tokens as it did during its earlier growth period. The current 2.5% rate adds about 89,500 new NEAR tokens to the supply every day, with most of those tokens going to stakers.

However, the proposal notes that 58.7% of NEAR is not staked. Those holders do not receive staking rewards, meaning new issuance can increase the number of tokens in circulation without giving them additional income. The proposed cut would also change how much stakers earn, with staking yield potentially falling from about 5.4% today to around 3.5% at the target rate.