NEAR Protocol has pushed through a significant network upgrade that cuts its annual token inflation rate from 5% to roughly 2.4%, despite an earlier governance vote failing to reach the required approval threshold. The change, finalized on October 30, reduces the rate of new NEAR token issuance by nearly 60 million per year — a move aimed at curbing dilution, rebalancing staking incentives, and lowering yields from around 9% to 4.5%, assuming roughly half the supply remains staked.
The update was implemented through NEAR’s standard upgrade mechanism, which activates only once validators controlling at least 80% of staked tokens adopt the new version. Validators now have 30 days to signal their participation in the updated protocol.
Governance Dispute Emerges
The decision has sparked a debate across the NEAR community, as the same proposal was previously rejected in a governance vote. The August 1 on-chain poll saw 89 validators — representing 45.06% of total votes — support the inflation cut, falling short of the two-thirds majority needed for formal approval. Despite that outcome, NEAR’s core developers proceeded to include the change in the latest protocol upgrade.
Responding to the backlash, NEAR Protocol Chief Technology Officer Bowen Wang told The Defiant that the implementation still hinges on validator consensus at the protocol level.
“The upgrade requires a supermajority of 80% of the stake of block-producing validators to adopt it and will not be implemented unless that threshold is reached,” Wang explained, adding that this mechanism has been consistent for all major updates since NEAR’s mainnet launch.
