NEAR will issue fewer tokens—but why might stakers not all be happy?
Your tokens may still be staked, but your rewards could gradually shrink. The same $NEAR issuance-reduction proposal may feel very different to people who hold tokens without staking them and those who rely on staking rewards.
HSP-029, which is currently up for a vote, aims to lower NEAR’s maximum annual issuance rate from 2.5% to 1.6%, phasing in the change over 24 months. This is a direction worth supporting: holders who don’t stake will face less dilution, and the pressure from new supply can ease gradually. Compared with promising another round of ecosystem investment, directly changing the issuance rules has a clearer impact on holders.
But a drop from 2.5% to 1.6% means a 36% reduction in the annual issuance rate—it does not mean that circulating supply will be 36% lower in two years. Tokens will still be issued; they’ll just be issued more slowly. The proposal also includes a one-quarter buffer period after it passes, followed by the two-year adjustment period. Voting today won’t immediately remove a batch of tokens from the market tomorrow.
The main cost falls on stakers. With the same participation rate, fewer newly issued tokens will be distributed to them, so rewards will naturally decline. Some may unstake as a result, while others may accept lower rewards in exchange for less dilution of their holdings. Which side prevails will determine whether the change can retain holders while also keeping the network’s validators engaged.
So what matters more to me is whether these rules can be implemented consistently. Any support for the token price comes from slower future supply growth; it won’t conjure up extra buying demand. And if staking participation falls significantly, newly unlocked tokens could offset some of the benefits. There isn’t enough basis to translate lower long-term issuance directly into short-term price gains.
The vote isn’t the final step, either: validators will still need to adopt the protocol upgrade. Supporting reduced dilution also means accepting that validator income will change. The real question NEAR needs to answer this time is whether, after issuing fewer tokens, it can still persuade enough people to maintain the network.
#NEAR #NEAROpensVoteToCutAnnualIssuanceTo1.6% #Tokenomics
Your tokens may still be staked, but your rewards could gradually shrink. The same $NEAR issuance-reduction proposal may feel very different to people who hold tokens without staking them and those who rely on staking rewards.
HSP-029, which is currently up for a vote, aims to lower NEAR’s maximum annual issuance rate from 2.5% to 1.6%, phasing in the change over 24 months. This is a direction worth supporting: holders who don’t stake will face less dilution, and the pressure from new supply can ease gradually. Compared with promising another round of ecosystem investment, directly changing the issuance rules has a clearer impact on holders.
But a drop from 2.5% to 1.6% means a 36% reduction in the annual issuance rate—it does not mean that circulating supply will be 36% lower in two years. Tokens will still be issued; they’ll just be issued more slowly. The proposal also includes a one-quarter buffer period after it passes, followed by the two-year adjustment period. Voting today won’t immediately remove a batch of tokens from the market tomorrow.
The main cost falls on stakers. With the same participation rate, fewer newly issued tokens will be distributed to them, so rewards will naturally decline. Some may unstake as a result, while others may accept lower rewards in exchange for less dilution of their holdings. Which side prevails will determine whether the change can retain holders while also keeping the network’s validators engaged.
So what matters more to me is whether these rules can be implemented consistently. Any support for the token price comes from slower future supply growth; it won’t conjure up extra buying demand. And if staking participation falls significantly, newly unlocked tokens could offset some of the benefits. There isn’t enough basis to translate lower long-term issuance directly into short-term price gains.
The vote isn’t the final step, either: validators will still need to adopt the protocol upgrade. Supporting reduced dilution also means accepting that validator income will change. The real question NEAR needs to answer this time is whether, after issuing fewer tokens, it can still persuade enough people to maintain the network.
#NEAR #NEAROpensVoteToCutAnnualIssuanceTo1.6% #Tokenomics