A new proposal from HOT Protocol, a decentralized group building on the NEAR Protocol, aims to significantly reduce the blockchain’s annual token inflation rate from 5% to 2.5%.
The plan, submitted on June 24, is intended to strengthen NEAR’s long-term sustainability and realign token incentives across the network.
According to the proposal, NEAR’s current 5% inflation rate is out of sync with the network’s actual growth and user activity. HOT Protocol argues that the originally designed inflation model relied heavily on fee burns from high transaction volumes to offset new supply. However, in practice, only 0.1% of NEAR’s total supply was burned over the past year.
This has led to over 60 million NEAR tokens entering circulation annually—growth that HOT Protocol describes as dilutive and harmful to NEAR’s competitiveness, particularly in a market where efficient capital usage is increasingly important.
To address this imbalance, the proposal also recommends lowering the staking yield from 9% to 4.5%, aiming to better align with current network activity and make NEAR-based DeFi offerings more competitive compared to other ecosystems.
HOT Protocol sees the reduced inflation as a strategic move to position NEAR more effectively within the broader crypto landscape, emphasizing sustainability over excessive token issuance. The proposal is now open for community discussion and governance consideration.
Kosta Gushterov
Reporter at Coindoo
Kosta has been a part of the team since 2021 and has solidified his position with a thirst for knowledge, incredible dedication to his work and a “detective-like” mindset. He not only covers a wide range of trending topics, he also creates reviews, PR articles and educational content. His work has also been referenced by other news outlets.
Source: https://coindoo.com/proposal-aims-to-reduce-near-inflation-boost-sustainability/