The $NEAR Protocol’s governance body, House of Stake, has taken a major step to adjust the network’s token economy. A proposal to reduce the maximum annual production rate of $NEAR tokens from 2.5% to 1.6% over 24 months has been approved. The change, if implemented, will gradually decrease the production rate by about 3.75 basis points each month, reaching the new target by the end of the second year.
The current distribution model, which allocates 90% of newly produced tokens to staking participants and 10% to the protocol treasury, will remain unchanged. The primary goal is to reduce the dilution of the $NEAR supply and the selling pressure from newly produced tokens. The protocol argues that the need for incentives during the network’s initial phase has largely ended and that validator capacity now exceeds demand.
Calculations suggest that the change could prevent the production of approximately 11.8 million $NEAR in the first two years. Over six years, this amount is expected to reach 66.1 million $NEAR, with the total supply remaining about 4.36% lower than current plans. Following full implementation, daily production is estimated to fall from approximately 89,500 $NEAR to 57,300 $NEAR.
Lower production will also affect staking rewards. If the participation rate remains unchanged, the gross staking yield could decrease from 5.268% to 3.372%. The decision is not yet binding. It requires review by the House of Stake Security Council, followed by a 90-day waiting period. The final stage will involve validators approving the protocol update.