Key takeaways
- NEAR governance approves 36% reduction in annual issuance
- Token price falls nearly 9% despite supply reform
- Lower inflation could reduce staking rewards and dilution
NEAR Protocol's governance community has approved a proposal to reduce annual token issuance by 36%, potentially removing millions of tokens from future supply growth, even as NEAR fell nearly 9% amid broader cryptocurrency selling.
The token traded around $3.75 on November 3, down approximately 8.75% over 24 hours and more than 14% over the previous week. The decline extended a NEAR price correction that followed October's rally toward $6.
According to the official HSP-029 proposal, the House of Stake approved lowering maximum annual issuance from 2.5% to 1.6% over 24 months, with approximately 99.9% support from participating voting power.
NEAR Supply Could Shrink by 66 Million Tokens
The proposal would gradually reduce annual issuance by approximately 0.0375 percentage points each month, rather than implementing an immediate reduction.
Its authors estimate that the change could prevent 11.8 million NEAR from entering circulation over two years and 66.1 million over six years, compared with maintaining the existing issuance ceiling.
Daily issuance would eventually decline from approximately 89,517 tokens to 57,291, while the existing distribution structure remains unchanged.
Under that arrangement, 90% of newly issued NEAR goes to staking participants and 10% to the protocol treasury.
The proposal also introduces a trade-off for validators.
Projected gross staking yields could decline from approximately 5.27% to 3.37%, assuming staking participation remains unchanged.
Its authors estimate that 24 of 405 validator pools could lose economic self-sufficiency under the lower issuance model.
The change resembles earlier Solana inflation reforms, reflecting growing interest in reducing token dilution while preserving blockchain security.
Why Is NEAR Falling Despite Lower Inflation?
NEAR's decline highlights the difference between improving token economics and generating immediate investor demand.
The cryptocurrency had already experienced significant selling pressure, with futures liquidations accelerating as leveraged traders reduced exposure.
On November 2, reported open interest stood near $856 million across seven major exchanges, following a 6.5% daily decline.
The issuance reform also has not taken effect.
Following the successful governance vote, the proposal must pass Security Council review, a 90-day preparation period and technical adoption by validators.
Meanwhile, NEAR's broader ecosystem has continued expanding.
Its cross-chain infrastructure now supports Bitcoin, XRP and Dogecoin transactions through applications such as Infinex.
Institutional interest has also increased, with Bitwise advancing its NEAR ETF registration in September.
However, neither greater network activity nor reduced issuance guarantees rising prices.
What Happens Next for NEAR Price?
NEAR's immediate challenge is recovering the $4 psychological threshold after losing the previous $4.30 support area.
The $3.50–$3.70 region is emerging as a potential downside support zone, while a recovery above $4 could improve near-term sentiment.
Longer term, the issuance reduction may become more significant as NEAR's institutional adoption and cross-chain activity evolve.
