NEAR Sovereign Fund Proposes Token Supply Cap

NEAR Protocol co-founder Illia Polosukhin has proposed a governance mechanism to create a 'Sovereign Fund' that would consolidate the protocol's treasury, generate yield, and potentially cap token supply. The fund would be seeded with approximately 30 million NEAR tokens as its initial capital infusion.

The proposal aims to address concerns about transparency in the current treasury management system by the NEAR Foundation. Polosukhin frames this proposal as a 'conversation starter' rather than a fait accompli, and includes a two-week comment period before any binding decisions get made.

The fund would generate yield to cover security costs, validator support program payments, and public goods expenses. The long-term vision is to transition NEAR to a fixed token supply, as perpetual inflation is not necessary if the Sovereign Fund's yield can fully cover security expenses.