NEAR Protocol proposes to reduce token inflation to 2,5% per year

• NEAR Protocol Votes on Proposal to Cut Token Inflation
• NEAR staking could drop from 9% to 4,5% per year
• NEAR Community Supports Inflationary Adjustment for Sustainability

The NEAR Protocol may undergo a major change in its economic policy, with a proposal from the community suggesting reducing the annual inflation of tokens from 5% to 2,5%. The proposal was presented by HOT Protocol, a decentralized collective that operates in the NEAR ecosystem, with the aim of making the supply of tokens more sustainable and attractive to investors and developers.

According to the paper, the current inflation rate has created a supply surplus, outpacing the real growth in network usage. “High inflation causes unnecessary growth and dilution in token supply,” the group said. While the original design assumed that burning transaction fees would offset this expansion, only 0,1% of the supply was burned last year, leaving the annual issuance at over 60 million NEAR.

HOT Protocol also proposes reducing the staking yield from 9% to 4,5%, which could position NEAR-based DeFi products more competitively against other platforms. The change, while likely to alienate some validators, could pave the way for new revenue generation models based on transaction fees.

“Reducing NEAR inflation is an urgent priority,” the group said, warning that continuing with the current policy puts unnecessary pressure on circulating supply, negatively impacting the asset’s value proposition.

The proposal has found strong support from the community. Illia Polosukhin, co-founder of NEAR Protocol, stated that the move reinforces NEAR’s position as a potential store of value, especially in the context of AI applications. He also stressed that reducing reliance on staking is essential to freeing up space for DeFi innovation.

Proposal is up by HOT following a lot of community discussion for reducing NEAR inflation down to 2.5%

I support this proposal.

Lower inflation allows to better position NEAR as store of value for AI

To add a few more reasons:
– NEAR continues to innovate keeping tx prices… https://t.co/hQldCcN00v

— Illia (root.near) (🇺🇦, ⋈) (@ilblackdragon) June 24, 2025

Electric Capital’s Avichal Garg also spoke in favor: “I’m a big fan of this for the NEAR ecosystem. The future of crypto is lower issuance, fee changes to generate revenue for token holders.”

Big fan of this for the NEAR ecosystem

The future of crypto:
– lower emissions
– turn on fee switches to drive revenue to tokenholders
– reward long-term holders via more revenue https://t.co/nkokPkyyBi

— Avichal – Electric ϟ Capital (@avichal) June 24, 2025

Voting on the proposal is currently underway and requires support from two-thirds of validators to pass. So far, 13,36% of the required quorum has been reached. Implementation is scheduled for Q2025 XNUMX, subject to technical validation and final community consensus.