House of Stake, NEAR Protocol‘s community governance body, passed HSP-029 on November 2, 2026, proposing to reduce the annual NEAR issuance cap from 2.5% to 1.6% over 24 months. Under the proposal, this change will slow supply dilution, as the network is past the stage of needing high issuance to expand the validator set and support security.

HSP-029 received approximately 99.96% of participating voting power in support, equivalent to nearly 3.29 million veNEAR. There were 1,071 veNEAR abstaining, and no votes against were recorded. However, the new issuance cap is not yet effective. This proposal still needs to complete review rounds, be deployed through a validator-adopted protocol upgrade, and undergo a 90-day grace period before the first reduction.

What HSP-029 Changes 

According to HSP-029, the issuance cap decreases each epoch at a rate equivalent to about 3.75 basis points per month. This level is projected to be 2.275% after six months, 2.05% after 12 months, and 1.825% after 18 months, before reaching 1.6% at the end of the 24-month roadmap.

On the network snapshot on September 22, realized gross issuance was recorded at 2.45%, lower than the 2.5% cap because a portion of transaction fees was burned. Of the newly issued tokens, 90% continue to be allocated to staking participants and 10% go to the protocol treasury. HSP-029 does not establish additional funds, spending programs, or new issuance mechanisms.

The proposal’s model estimates the daily new NEAR generated drops from about 89,517 to 57,291 when the 1.6% cap is fully implemented. Compared to the scenario of maintaining 2.5%, this roadmap helps avoid issuing 11.8 million NEAR in the first two years and 66.1 million NEAR after six years. Total supply after six years is projected to be about 4.36% lower.

Lower Dilution Comes With Lower Staking Returns 

About 57.3% of NEAR’s total supply was not participating in staking in the proposal’s snapshot. This group of holders does not receive issuance tokens meant for stakers, but will experience lower dilution as issuance drops.

With the staking ratio remaining at 42.71%, gross staking yield is projected to decrease from 5.268% to 3.372% when the issuance cap hits 1.6%. A holder staking 1,000 NEAR will receive about 20 fewer NEAR after two years compared to the scenario of maintaining 2.5%. Actual yield also depends on the amount of NEAR that continues to be staked and the commission rate of each validator.

According to the proposal’s model and cost assumptions, 24 out of 405 validator pools may lose the ability to break even on costs at the target issuance rate. The proposer argues that the existing validator set has more applicants than active slots and no longer needs high issuance to maintain operations. Some opposing views on the governance forum warn that lower rewards could put additional pressure on smaller validators and make stake more concentrated.

The Vote Does Not Make the Cut Effective Yet 

After the Decision Vote, HSP-029 moves to the Security Council review according to House of Stake governance procedures. This phase lasts up to 14 days. The proposal then needs to pass the Foundation Directors review, which has no fixed timeline.

The new parameters must be included in a protocol upgrade after review rounds are completed. Validator operators will independently decide whether to run the new software version. The change only becomes a network rule when the upgrade is adopted by validators.

HSP-029 proposes a 90-day grace period after ratification for exchanges, wallets, custodians, and staking providers to update terms and yield projections. The 24-month issuance reduction roadmap begins after this phase. NEAR has not announced an official activation date.

NEAR Revisits Issuance After Its 2025 Halving 

HSP-029 comes about one year after NEAR’s last major issuance adjustment. A protocol upgrade in late October 2025 reduced the maximum annual issuance from 5% to 2.5%, bringing staking rewards down from the 8%-9% range to about 4%-5%.

According to HSP-029’s governance discussion, NEAR had 342 active validators at the time the previous cut was implemented. This number increased to 382 after three months and peaked at 439 in April 2026. This period also coincided with House of Stake’s HSP-002 program for small validators. If implemented, HSP-029 will be the second time NEAR lowers its issuance cap in less than two years.

What Comes Next 

House of Stake has not announced the completion dates for the review rounds, the protocol upgrade version, or the activation date. NEAR One and protocol developers will confirm the deployment schedule after the proposal is ratified, while validator operators decide whether to adopt the new software version. The first issuance reduction takes place after the 90-day grace period.

According to HSP-029, House of Stake will publish quarterly transparency reports after the roadmap starts. The reports are expected to track realized issuance per epoch, the number of active operators, the proposal queue, the staking ratio, and the amount of NEAR avoided from being issued compared to the 2.5% rate. The issuance cap reaches the target rate of 1.6% 24 months after the roadmap is activated.