TL;DR
- NEAR price drops approximately 7% on November 3, trading near $3.82 despite approval of a proposal to reduce annual token issuance.
- The planned changes could prevent 11.8 million NEAR tokens from entering circulation over two years.
- The proposal still requires further governance steps and a technical upgrade before implementation.
NEAR Token Falls as Market Pressure Persists
NEAR Protocol’s native cryptocurrency – NEAR price declined on Tuesday, even after the network’s community approved a proposal designed to reduce long-term token dilution.
NEAR traded at approximately $3.82, down around 7% on the day, while its weekly losses reached roughly 13%, according to CoinMarketCap data. The decline suggests that the tokenomics announcement has not yet translated into an immediate improvement in market sentiment.
The proposal, known as HSP-029, received overwhelming support from participating voters on Monday. According to the NEAR House of Stake, approximately 99.9% of the voting power supported the measure, with around 3.28 million vote-escrowed NEAR (veNEAR) tokens cast in favor.
NEAR Governance Targets Lower Annual Token Issuance
The proposal would gradually reduce NEAR’s maximum annual token issuance rate from 2.5% to 1.6% over two years. Rather than introducing an immediate supply reduction, the change would lower the rate at which new tokens enter circulation.
According to the proposal’s estimates, the adjustment could prevent approximately 11.8 million NEAR tokens from being issued over the first 24 months. Over six years, the avoided issuance could reach 66.1 million tokens.
The change is intended to limit dilution for existing holders as the network moves beyond its earlier growth and bootstrapping phase.
However, lower issuance would also affect staking rewards. Projected gross staking yields are expected to decline from approximately 5.2% to 3.3% by the end of the implementation period, assuming other relevant conditions remain unchanged.
When Will the NEAR Supply Changes Take Effect?
The proposal has not yet become fully binding. It remains subject to a 14-day Security Council veto window. If it clears that stage, ratification and a subsequent 90-day grace period must follow before the issuance reduction begins.
Validators will also need to adopt the required protocol upgrade to implement the changes.
For NEAR holders, the proposal represents a significant adjustment to the network’s monetary policy. Whether it supports a sustained NEAR price recovery will depend on broader market conditions, investor demand, and how participants respond to the revised balance between token issuance and staking rewards.
For now, NEAR’s price decline shows that an improvement in tokenomics does not necessarily lead to an immediate bullish reaction in the market.
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