A proposal to reduce the issuance of new tokens in the NEAR Protocol has passed a vote by token holders. Following the vote, which concluded today, proposal HSP-029 has entered the stage where the Security Council can consider a veto.
The official governance page shows approximately 3.29 million votes in favor (VEYN), with no votes against. The veto period is expected to end on November 16th.
The proposal aims to reduce the maximum annual new token production rate from 2.5% to 1.6%. This change represents a 36% reduction in the production rate. However, the transition will not be done all at once; a phased schedule spread over 24 months will be implemented.
According to the proposed model, continuing with the current system would result in approximately 11.8 million fewer NEARs produced in two years and 66.1 million fewer in six years.
Lower production will also affect staking rewards. In the model prepared with the assumption of constant staking participation, the gross annual return decreases from 5.27% to approximately 3.37%.
In addition to completing the veto process for the implementation, validators also need to adopt the protocol update. The proposal envisages a 90-day preparation period before the first download after final approval.
*This is not investment advice.
