NEAR Protocol Seeks to Slash Token Inflation with 1.6% Issuance Target

NEAR Protocol is proposing a reduction in its annual token issuance from 2.5% to 1.6% over the next 24 months. This move aims to lower the number of new NEAR tokens entering circulation, while keeping the existing 90/10 split between stakers and the treasury unchanged.

The proposal also explores the possibility of moving towards a fixed total supply in the long term. However, this goal is not part of the current proposal and will be subject to further research and future governance decisions.

The current 2.5% issuance rate results in approximately 89,500 new NEAR tokens being created each day. The proposed reduction would avoid around 66 million new NEAR tokens from being issued over six years.

The network's growing revenue from NEAR Intents, which has processed over $30 billion in cumulative volume across 35 chains, is a key factor in the proposal. The revenue is used to buy back NEAR on the open market, reducing the need for newly created tokens to compensate the network's security providers.

The proposal suggests a 90-day grace period before the first reduction, giving wallets, exchanges, and staking providers time to update their systems and adjust to the new issuance schedule.