HSP-029 proposes a gradual, 24-month reduction in NEAR’s annual token issuance. Token-denominated staking income could also fall, putting the ability of smaller validators to remain in operation alongside dilution at the centre of the debate.
The NEAR community is voting on HSP-029, a proposal to lower the cap on annual new token issuance from 2.5% to 1.6%. Voting on House of Stake opened on October 19 at 16:48 UTC and closes at the same time on November 2. The plan, authored by SVRN CEO Sal Ternullo, would reduce the maximum rate by 0.9 percentage points, or 36%. The current annual cap remains 2.5%.
Ternullo argues that high issuance, originally used to encourage participation in the network’s early years, now dilutes existing holders more than necessary. NEAR’s February 24, 2026 tokenomics update reported that an earlier upgrade had already halved the maximum annual rate and that House of Stake governance was operational. HSP-029 seeks to change the issuance cap alone, without establishing a new buyback programme.
NEAR House of Stake’s official October 20 announcement publicises the open vote and the proposed issuance schedule:
A 90-day preparation period before a 24-month reduction
If ratified, the proposal allows one full quarter, described as 90 days, before the first reduction. Wallets, exchanges, custodians and staking providers would have time to update their disclosures. The cap would then decline in small increments each epoch over 24 months. An epoch is a network validation period. The total monthly reduction would be roughly 3.75 basis points, or 0.0375 percentage points.
| Stage | Maximum annual new token issuance |
|---|---|
| Start | 2.500% |
| Month 6 | 2.275% |
| Month 12 | 2.050% |
| Month 18 | 1.825% |
| Month 24 | 1.600% |
The 90/10 split of newly issued tokens between staking participants and the treasury would remain intact. No additional treasury spending authority, subsidy programme or separate administrator is proposed. Issuance would continue after the target is reached, with an annual cap of 1.6%. No fixed limit on NEAR’s total supply is proposed.
Implementation depends on protocol developers preparing an upgrade after the House of Stake decision and validators independently adopting the software through the standard upgrade process. NEAR One is assigned to coordinate readiness and publish the confirmed schedule. A calendar date for the first reduction has not been announced. The monitoring plan calls for quarterly reports covering actual issuance, validator-set health and cumulative issuance avoided.
The 00:24–00:40 section of NEAR Protocol’s October 21, 2025 voting tutorial explains how to view votes for, against or abstaining on a proposal. The recording uses an old test proposal; it does not show the outcome of HSP-029 or the current protocol upgrade.
Slower supply growth could also reduce staking income
The proposal’s model projects roughly 11.8 million fewer NEAR issued over two years and 66.1 million over six years compared with keeping the annual cap at 2.5% indefinitely. The calculation compares future issuance. No deduction from existing balances or token burning is proposed. The six-year calculation includes keeping the 1.6% cap after the 24-month transition. The estimates belong to the proposal’s author and do not predict a particular increase in the token price.
The staking calculation uses a September 22 measurement in which 42.71% of total supply was staked. Holding participation constant and applying the 90% reward share, annual gross staking yield falls from 5.268% to 3.372%. The rates are calculated before validator commission; the net amount a participant receives depends on the chosen service’s commission. If less NEAR is staked, the reward pool would be divided across a smaller amount, potentially raising the rate for remaining participants. The proposal acknowledges that the eventual participation rate at a 1.6% issuance cap is uncertain.
A holder who does not stake could benefit from slower dilution of their share of total supply. A holder who stakes could also earn fewer new tokens. For operators, commission rates, delegated stake, their own stake and infrastructure costs determine the impact. In the proposal’s calculation for an operator with no NEAR of its own that relies entirely on commission from delegated assets, commission revenue falls by roughly 36% at the target rate if other conditions remain unchanged.
The author’s cost calculation combines commission on delegated assets with rewards on the operator’s own stake. With NEAR priced at $4.30 and monthly machine costs set at $500 for block producers and $200 for other nodes, the number of validators covering those costs falls from 170 to 146. Whether 24 operators would actually close depends on prices, delegation and their real expenses. The capital measurement only includes balances in owner accounts; assets held elsewhere are excluded.
Validator support and questions about smaller operators
Validator Polkachu said in an October 9 forum response that it supported the gradual reduction and would adopt the corresponding protocol upgrade:
“We will support by adopting the corresponding protocol upgrade as a validator.”
Polkachu, October 9, 2026
Axia, which disclosed operating a node through Meta Pool’s Node Studio programme, asked for a separate assessment of smaller validators’ reliance on delegation from support programmes. While recognising the case for less dilution, Axia said the risk of reduced delegation concentrating the network among fewer operators had not been fully addressed.
In his conflict-of-interest disclosure, Ternullo said SVRN held approximately 55 million NEAR, with more than 90% staked, and operated validator infrastructure through third parties. The company also runs an MPC node paid under the separate HSP-007 programme. HSP-029 does not amend HSP-007 or create a new programme from which SVRN could receive an allocation. SVRN also said it intended to vote in favour.
Could issuance rise again? HSP-029 contains no mechanism that automatically raises issuance if network conditions deteriorate. The author says a future finding that the target rate is too low would require a separate governance proposal and an open decision process.
