NEAR cuts max inflation to 2.5%, adds validator support
NEAR Foundation announced on October 21, 2025, that it backs a protocol upgrade to cut the network's maximum annual token inflation from 5% to 2.5%. The change requires 80% of staked, block-producing validators to run the new binary before taking effect.
The Foundation presented the inflation cut alongside two governance proposals. HSP-002 would provide quarterly support of 150 NEAR tokens to each of the 100 smallest validators by stake who maintain at least 97% uptime during Q4 2025. HSP-003 would allocate 280,682 NEAR over three months to reward veNEAR holders who participate in House of Stake governance.
The inflation reduction would bring staking rewards to roughly 4.75% if half of NEAR's total supply remains staked. The Foundation said an earlier cross-ecosystem vote showed strong support for lowering issuance. Because the upgrade requires validator supermajority adoption, no chain fork will occur.
HSP-002 carries an illustrative annual budget of 100,000 NEAR if extended beyond the initial quarter. The proposal targets validators who might otherwise consolidate as overall rewards decline with lower inflation.
HSP-003 aims to lock 60 million NEAR in veNEAR by the end of its three-month pilot. The program offers a fixed 7.5% APY on the first 10 million NEAR in month one, then switches to a dynamic formula for months two and three.
NEAR's original tokenomics set 5% annual issuance with fee burns offsetting new supply. The Foundation said protocol improvements such as stateless validation and reduced gas and storage costs lowered the expected burn rate and changed validator incentives, prompting the reassessment of issuance.
The House of Stake governance platform launched on mainnet and now handles discussion and voting on the two companion proposals. The Foundation emphasized that the upgrade depends on validator adoption rather than a unilateral deployment. Both HSP-002 and HSP-003 remain subject to House of Stake governance approval.
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