Last October, NEAR cut its annual issuance rate from 5% to 2.5%. The way it was carried out was interesting: the community vote failed to reach the 66.67% threshold, but the core team pushed the code into an upgrade package anyway, leaving validators 30 days to decide whether to accept it.
It passed in the end. But validators including Chorus One publicly criticized the move: If the vote didn’t pass, what do you call it when you push it through anyway? Governance?
This history matters because the same scenario is now unfolding for a second time.
On September 30, Sal Ternullo, CEO of NEAR treasury company SVRN, proposed a new plan on the governance forum: cut the maximum annual issuance rate from 2.5% to 1.6%, phased in over 24 months, while lowering the annualized staking rate from about 5.4% to 3.5%.
The reasoning behind the numbers: NEAR issues about $140 million worth of new tokens each year, while its TVL is only about $157 million and annual transaction fees are under $3.2 million. Put simply, the network is using high inflation to subsidize security costs, even though there isn’t enough usage to justify those costs. Halving issuance would mean issuing about 970,000 fewer NEAR each year.
But this proposal signals something more far-reaching: SVRN also mentioned the idea of a “fixed supply” on the forum. It’s not part of this vote, but co-founder Illia Polosukhin has already publicly endorsed similar ideas. If NEAR really moves toward a fixed supply, that would mean a completely different valuation model.
The vote is still underway. Clearing the 66.67% threshold is the first hurdle; if it passes, validators will still need to go through another round of the upgrade process.
History tells us that even if the vote fails, the core team might still push it through—but that would provoke a backlash over governance.
The outcome of this contest is worth watching more closely than the “inflation cut” itself.
If you hold NEAR, what impact do you think this vote will have on the price?
$NEAR
#near投票拟将年增发率降至1.6%
It passed in the end. But validators including Chorus One publicly criticized the move: If the vote didn’t pass, what do you call it when you push it through anyway? Governance?
This history matters because the same scenario is now unfolding for a second time.
On September 30, Sal Ternullo, CEO of NEAR treasury company SVRN, proposed a new plan on the governance forum: cut the maximum annual issuance rate from 2.5% to 1.6%, phased in over 24 months, while lowering the annualized staking rate from about 5.4% to 3.5%.
The reasoning behind the numbers: NEAR issues about $140 million worth of new tokens each year, while its TVL is only about $157 million and annual transaction fees are under $3.2 million. Put simply, the network is using high inflation to subsidize security costs, even though there isn’t enough usage to justify those costs. Halving issuance would mean issuing about 970,000 fewer NEAR each year.
But this proposal signals something more far-reaching: SVRN also mentioned the idea of a “fixed supply” on the forum. It’s not part of this vote, but co-founder Illia Polosukhin has already publicly endorsed similar ideas. If NEAR really moves toward a fixed supply, that would mean a completely different valuation model.
The vote is still underway. Clearing the 66.67% threshold is the first hurdle; if it passes, validators will still need to go through another round of the upgrade process.
History tells us that even if the vote fails, the core team might still push it through—but that would provoke a backlash over governance.
The outcome of this contest is worth watching more closely than the “inflation cut” itself.
If you hold NEAR, what impact do you think this vote will have on the price?
$NEAR
#near投票拟将年增发率降至1.6%