NEAR’s token inflation hits new low as AI demand grows

The approval did not arrive out of nowhere; it followed a formal governance sequence inside NEAR’s House of Stake. CryptoNews.net first framed that process on October 21 with the headline, “NEAR’s House of Stake Opens Vote to Slash Annual Issuance to 1.6% Amid $3 B Staked,” establishing that the governance body had officially opened voting on a plan to lower the network’s maximum annual token issuance and setting up the decision that would be finalized in early November.

That decision was confirmed on November 3, when CryptoNews.net reported, “NEAR’s House of Stake (99.96% support) backs Sal Ternullo’s proposal to slash issuance 36% to 1.6%.” In governance terms, that result amounted to approval of proposal HSP-029, explicitly tying the House of Stake vote to a reduction in the maximum annual issuance rate from the prior 2.5% to 1.6% and marking the start of the proposal’s phased 24-month ramp-down.

HSP-029 is built to attack inflation at the source: it “changes one protocol parameter: the maximum annual issuance rate,” setting a “gradual, per-epoch decline” in maximum annual issuance over 24 months after a 90-day grace period, according to The Cryptonomist. That matters because lower issuance directly slows supply growth and dilution, and the proposal quantifies the effect as 11.8 million NEAR in avoided issuance over two years and 66.1 million over six years, equivalent to supply reductions of about 0.86% and 4.36% versus keeping the prior cap in place.

The economic logic is to better match token creation with usage generated by staking and AI services: at a September 22, 2026 snapshot, 42.71% of supply was staked, and gross staking yield was modeled to fall from 5.268% to 3.372% at that participation rate, while “the effect inference capacity… instead of paying $200 or $20 a month… you have the asset and you're getting inference,” as Milk Road described it. The Cryptonomist notes the 57.3% of supply that is unstaked gets “an immediate benefit from reduced dilution,” even as validator economics tighten, with 24 of 405 pools projected to lose self-sufficiency and machine-cost coverage falling from 170 to 146.

NEAR’s latest issuance cut is best understood not as a sudden pivot but as the next leg of a longer inflation downshift that has been unfolding in stages. In the October 2026 analysis, the speaker said, “October 28th last year, we halved emissions on the network from 5% inflation to 2.5% inflation,” explicitly anchoring the current move to an earlier reset rather than a standalone event and showing that the network had already broken from its original launch-era issuance framework before the newest proposal emerged. As he put it elsewhere, “That’s what went from 5 to 2.5 kind of over a year ago.”

That continuity is made even clearer in the later description of the follow-on proposal, which was framed as another step along the same path rather than a new doctrine. As Milk Road recounted, “when we launched NEAR, we launched it with a 5% inflation um like 5% issuance… last year… a vote to reduce that to half that immediately. That's what went from 5 to 2.5… [and] the proposal effectively… was like, hey, look, let's let's reduce over next two years uh kind of from 2.5 to 1.6 percent,” matching the earlier line that “Just last week we published an inflation reduction proposal in the Governance forum to take the inflation rate from 2.5% to 1.6% over a two year curve.”