NEAR Protocol halves inflation rate despite failing approval threshold
NEAR Protocol has implemented a network upgrade that halves its annual token inflation rate from 5% to roughly 2.4%, sparking debate over governance as the earlier community vote on the change failed to reach the required approval threshold.
- The upgrade reduces annual NEAR token issuance by nearly 60 million, lowers staking yields from ~9% to 4.5%, and aims to limit token dilution.
- The change requires validators controlling 80% of staked tokens to adopt the new protocol within 30 days for activation.
- NEAR CTO Bowen Wang emphasized that the earlier community vote was a signal, while validator approval at the consensus layer remains the binding governance mechanism.
NEAR Protocol ( NEAR ) has rolled out a major network upgrade that reduces its annual token inflation rate from around 5% to approximately 2.4%. The update, completed on October 30, is designed to slow the rate of new NEAR token issuance, cutting the annual minting by nearly 60 million tokens. The change aims to lessen token dilution, realign staking incentives, and lower staking yields from about 9% to 4.5%, assuming that roughly half of the circulating supply remains staked.
The upgrade took effect through NEAR’s standard protocol update mechanism, which requires validators controlling 80% of staked tokens to adopt the new version for it to be activated. Validators now have 30 days to opt in to the revised protocol.
NEAR Protocol inflation cut sparks debate over governance
The inflation reduction decision has stirred controversy because an earlier community vote on the same proposal failed to pass. The August 1 on-chain poll saw 89 validators —representing 45.06% of total votes—supporting the inflation reduction, falling short of the two-thirds majority required for formal approval. Nevertheless, the NEAR core development team proceeded to include the change in the network upgrade.
Responding to concerns, NEAR Protocol Chief Technology Officer Bowen Wang told The Defiant that the adjustment still depends on validator approval at the consensus layer.
“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 stated. He added this process has governed all major network upgrades since NEAR’s mainnet launch .
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
The AI boom may follow the path of the 19th-century railway bubble, and builders may not be the ultimate winners
Goldman Sachs analyst Bobby Molavi compared the current situation to the 19th-century British railway mania: 500 companies spent more than the nation's annual income building 8,000 miles of railway, with most early investors losing out, while the real beneficiaries were the later "passengers." He pointed out that the current AI craze is driven by both debt and momentum, and that the S&P 500’s forward P/E ratio of 18x is only "a bit cheaper." Whether the builders can retain value is uncertain, and history does not offer an optimistic answer.
If Anthropic's IPO goes smoothly and the stock price rises next week, then everything remains the same for AI. Otherwise, some companies will go bankrupt.
The shrinking valuations of two major giants have triggered a chain reaction—investors are adopting more conservative revenue multiples for AI startups and are directly halting high-valuation financing for companies with zero revenue. Multiple venture capital firms have advised their portfolio companies to lower valuation expectations and to quickly build up cash reserves. Market participants warn that the outcome of Anthropic’s IPO will be a barometer for the industry: if successful, the boom will continue; if it fails, some companies may face elimination.
After the Brazilian election, political discount deepens; Morgan Stanley remains bullish on Petrobras (PBR.US), focusing on fuel pricing and dividends
Morgan Stanley still maintains its most optimistic "Overweight" rating, but has lowered its year-end 2027 target price from $31 to $25.
Corning (GLW.US) receives initial "Buy" rating from Jefferies! AI factories driving a fiber optic rush, with a potential global supply gap of up to 30%
For Corning, the recent profit growth mainly comes from the expansion of AI clusters. As the number of optical links crossing cabinets and campuses increases, customers need to deploy more optical fibers within limited conduit and cabinet space, thus driving demand for high-density optical cables and connection systems.
Crypto prices
More
