NEAR Protocol Considers Token Emission Reduction to 1.6% Over Two Years
The NEAR protocol community is discussing a new tokenomics strategy that proposes significant changes to the current emission rate. The plan, proposed by SVRN CEO Salom Ternullo, suggests reducing the annual NEAR emission from 2.5% to 1.6% over two years and eventually abandoning new emissions in favor of a fixed number of tokens.
The maximum annual NEAR emission will be gradually reduced each epoch over 24 months. The current distribution between stakers and the treasury, at a ratio of 90/10, remains unchanged. Ternullo emphasizes that the network no longer requires high emissions for its operation.
Implementing this proposal would prevent the issuance of about 66 million NEAR over six years, equivalent to over $329 million at current market prices. However, reducing emissions will impact staking profits: a decrease in annual yield from 5.4% to 3.5% is anticipated, resulting in approximately 21 fewer rewards for a holder of 1,000 NEAR over two years.
Ternullo believes that the emission of NEAR should ultimately cease and the total supply become fixed. The second part of the initiative, complete cessation of emissions, is currently only at the discussion stage. Ternullo emphasizes the need for further research to determine mechanisms for funding security, decentralization, and ecosystem development without new emissions.