---
title: "NEAR Protocol Community Approves Proposal to Cut Token Issuance to 1.6%"
description: "The governance measure passed with 99.9% approval to reduce annual emissions over 24 months, despite a 7% token drop."
url: https://basisdesk.news/news/near-protocol-community-votes-cut-token-issuance
published: 2026-11-03T12:41:19.484Z
modified: 2026-11-03T12:41:19.484Z
section: Altcoins
author: Basis Desk Newsroom (AI-generated, source-verified)
sentiment: bearish
tickers: [NEAR, BTC]
tags: [NEAR, Near Protocol, Tokenomics, Governance, Staking]
license: Quote with attribution to Basis Desk (basisdesk.news). Not financial advice.
---

# NEAR Protocol Community Approves Proposal to Cut Token Issuance to 1.6%

The governance measure passed with 99.9% approval to reduce annual emissions over 24 months, despite a 7% token drop.

## At a glance

- **What happened:** Near Protocol's community approved proposal HSP-029 to reduce annual token issuance from 2.5% to 1.6% over 24 months with 99.9% support.
- **Why it matters:** The change will reduce token dilution by 11.8 million NEAR over two years but cuts projected staker yields from 5.2% to 3.3%.
- **Who is affected:** NEAR holders, network validators, and stakers.
- **What's next:** A 14-day Security Council veto window, followed by a 90-day grace period and technical upgrade adoption by validators.
- **Status:** announced
- **Primary source:** [NEAR token sinks 7% as proposal to cut annual token issuance passes](https://cointelegraph.com/markets/near-sinks-7-proposal-cut-annual-token-issuance-passes?utm_source=rss_feed&utm_medium=rss&utm_campaign=rss_partner_inbound) — cointelegraph.com

## Key points

- Near Protocol approved proposal HSP-029 to reduce annual token issuance from 2.5% to 1.6% over 24 months.
- The measure lowers projected gross staking yields from 5.2% to 3.3% and eliminates 11.8 million NEAR in new emissions over two years.
- The implementation faces a 14-day Security Council veto window followed by a 90-day grace period and a validator client upgrade.

## Editorial remark

- **Context:** Layer-1 protocols frequently seek to adjust emission rates to reduce circulating supply inflation, balancing long-term token value against staker incentives.
- **Impact:** NEAR stakers will see gross staking yields drop from 5.2% to 3.3%, while network token dilution slows by 11.8 million NEAR over two years.
- **Watch:** The conclusion of the Security Council's 14-day veto window, followed by the 90-day grace period and subsequent validator software deployment.

The Near Protocol community voted on Monday to approve governance proposal HSP-029, a measure intended to lower the network's maximum annual token issuance rate from 2.5% to 1.6% across a 24-month horizon [1]. The vote passed with 99.9% backing, representing roughly 3.28 million vote-escrowed NEAR tokens cast in favor on the NEAR House of Stake governance platform [1].

Despite the successful governance decision, the $NEAR token dropped roughly 7% on Tuesday, falling to $3.82 as of 11:06 am UTC and bringing its seven-day decline to approximately 13%, according to data cited by CoinMarketCap [1]. At the time of writing, $NEAR changed hands at $3.90, down 4.9% over the past 24 hours amid broader market caution, with Bitcoin ($BTC) trading down 0.5% at $77,360.

## Dilution Targets and Validator Yield Impact

The initiative aims to curb ongoing token dilution by preventing an estimated 11.8 million NEAR from circulating over the initial two years, which translates to roughly $45 million in suppressed issuance based on current pricing [1]. Across a six-year horizon, the policy models an aggregate issuance drop of 66.1 million NEAR [1].

However, the planned reductions will simultaneously decrease gross staking rewards for network participants [1]. Projected gross staking yields are scheduled to contract from 5.2% to 3.3% once the full 24-month adjustment cycle concludes [1]. 

The governance outcome is not immediately active [1]. The measure is subject to a 14-day veto window administered by the protocol's Security Council [1]. Barring an intervention, a 90-day grace period will commence before issuance rates taper, alongside the deployment of a mandatory technical upgrade across active validators [1].

## FAQ

**How will proposal HSP-029 affect NEAR stakers?**

Projected gross staking yields are scheduled to fall from 5.2% to 3.3% by the end of the 24-month issuance reduction period.

**What is required before the issuance cut takes effect?**

The proposal must pass a 14-day Security Council veto window without intervention, complete a 90-day grace period, and see validators implement a technical upgrade.

## Sources

1. [NEAR token sinks 7% as proposal to cut annual token issuance passes](https://cointelegraph.com/markets/near-sinks-7-proposal-cut-annual-token-issuance-passes?utm_source=rss_feed&utm_medium=rss&utm_campaign=rss_partner_inbound) — cointelegraph.com, 2026-11-03

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Basis Desk Newsroom · AI-generated, source-verified · https://basisdesk.news/about/how-we-use-ai