NEAR proposal would cut issuance cap 36% over two years

NEAR’s House of Stake is voting on a proposal to cut the network’s maximum annual token issuance from 2.5% to 1.6% over 24 months, reducing new staking rewards as well as dilution for holders. The proposal, HSP-029 on the NEAR Forum, was posted on Oct. 7 by Sal Ternullo of SVRN.

The cut would happen in small steps each epoch, after a 90-day grace period following ratification. The proposal keeps the current 90% allocation of issuance to staking participants and 10% to the treasury. CryptoSlate reported that validators would also need to adopt a protocol upgrade before the ramp could take effect.

How much would staking yields fall?

HSP-029 estimates gross staking yield would decline from 5.268% at the current cap to 3.372% at the 1.6% target, assuming the staking ratio stays at 42.71%. That is a 36% reduction in the issuance cap, not a guaranteed 36% fall in every staker’s realized return: participation, fees and reward performance can change the outcome.

The proposal says the ramp would avoid 11.8 million NEAR in issuance over two years. Its estimates are based on a Sept. 22 mainnet measurement and a NEAR price of $4.30; they are projections, not a vote outcome or a forecast of token price.

What does the proposal mean for validators?

HSP-029’s model estimates that 24 of 405 pools would lose economic self-sufficiency at the target rate, using measured operator income and specified monthly machine-cost benchmarks. The proposal says the effect varies with each pool’s stake and operator holdings; its authors argue that issuance was not sustaining the long tail of small validators.

The proposal remains subject to a House of Stake vote. If ratified, the 90-day grace period would begin, followed by the two-year ramp; validator adoption of the protocol upgrade is also required.

Source material

• HSP-029 on the NEAR Forum — gov.near.org
• CryptoSlate reported — cryptoslate.com