NEAR's House of Stake has approved HSP-029, a governance proposal designed to reduce the network's maximum annual token issuance from 2.5% to 1.6%. The proposal page now marks the measure as succeeded after voting concluded on November 2. If implemented, the cap would decline gradually over 24 months rather than falling in a single step. The decision is material for validators, delegators and holders because it would slow dilution while also reducing the stream of newly issued tokens used for staking rewards. Approval is not the same as activation: the current protocol setting remains in place until the required technical and validator steps are completed.

A gradual change to one protocol parameter

HSP-029 changes the issuance cap but keeps the current distribution formula. Ninety percent of new issuance would continue to go to staking participants and 10% to the protocol treasury. After a one-quarter grace period following ratification, the maximum rate would decline by roughly 0.0375 percentage point per month, applied smoothly each epoch, until reaching 1.6% at month 24. The proposal says no new fund, spending program, oracle or administrator would be created. It also leaves token buybacks and other protocol-revenue policies outside the scope of the change.

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Lower dilution comes with lower staking income

The proposal models 11.8 million fewer NEAR issued over two years and 66.1 million fewer over six years than under a constant 2.5% cap. Those are projections, not guaranteed supply outcomes, because realized issuance also depends on transaction-fee burns and network conditions. For holders who do not stake, slower issuance would reduce dilution without removing a reward stream. Stakers and validators face the opposite side of the trade-off. At the proposal's September 22 snapshot, gross staking yield was modeled to fall from 5.268% to 3.372% if participation stayed unchanged. Actual yields can differ as the amount staked, validator performance and fee conditions change.

Validator economics remain the central uncertainty

Independent analysis by CryptoSlate before the vote reached the same broad conclusion: a 36% cut in the issuance cap would reduce prospective staking income, while its effect on token value cannot be assumed. The proposal itself estimates that 24 of 405 measured validator pools could lose economic self-sufficiency at the target rate under its spot-price assumptions. It argues that delegation, rather than issuance against operator-owned stake, already supports much of the validator set. That case may persuade voters, but it does not eliminate operating-cost or concentration risks if some validators leave.

What has to happen next

House of Stake cannot bind network validators on its own. The proposal calls for technical specifications, implementation and testing by protocol contributors, followed by independent adoption of the upgrade through NEAR's standard validator process. A full-quarter grace period is intended to give exchanges, wallets, custodians and staking providers time to update disclosures before the ramp begins. Quarterly reports would compare realized issuance with the schedule and track validator-set health. That sequence gives operators a separate consent point and creates time to monitor whether lower rewards alter participation before the target rate is reached. Until ratification and validator adoption are complete, the 1.6% figure should be understood as an approved governance target, not an enacted network parameter.

Sources

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