Reduce Inflation for NEAR Protocol

House of Stake Governance
24

:kitchen_knife: EOS Emissions Cut

In February 2020, EOS block producers voted to reduce inflation from 5% to 1%, effectively rerouting the 4% savings-rate emissions to burn/incineration

:chart_decreasing: Price Before & After

From CoinLore historical data:

  • Average price in 2019: approximately $4.02 (with highs near $8.60)
  • End of 2023: EOS hovered around $0.84, with a range of ~$0.53–$1.33
  • Mid‑2025: EOS trades at approximately $0.51, having declined from around $0.64 a year earlier (~12% down YoY)

Summary: Despite slashing inflation by 80% in early 2020, EOS collapsed from $4+ to ~$0.5 over the subsequent years—an 87% decline.

History may not repeat, but it rhymes, why copy what empirically didn’t work at all for Cosmos and EOS?

3 Likes
25

Hey @NEAR_MAXi, reducing inflation alone couldn’t save EOS. Their price drop comes from a range of issues:

  • Failure to deliver: EOS raised over $4B in its 2017–2018 ICO, creating huge expectations, but dApp and developer traction fell way behind Ethereum and newer chains like Solana, NEAR, and Avalanche. Many promises went unfulfilled.
  • Leadership and governance issues: The core team became passive post-launch, frustrating the community. Also, look into the lawsuit!
  • Competition: EOS lost its early lead to faster, more developer-friendly L1s. DeFi and NFTs mostly skipped EOS in favor of Ethereum and EVM chains.
  • Technical and usability barriers: Wallet creation is a pain. Most dApps left due to low usage and lack of support.
  • Crypto cycles: EOS got hit hard in the 2022–2023 bear market. Unlike others, it failed to bounce back due to weak narrative and vision.

That’s why EOS is fading.

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I couldn’t help but notice that, unfortunately, we can say the same thing about NEAR.

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There seems to be a consensus that reducing emissions is good for the economic model while a lot of objections are linked to the fact that the change is abrupt.

I believe that we can get the best result if we were to propose halving of emissions gradually over the period time - e.g. to move from 5% to 2.5% annualised over the period of 18 months (illustrative) reducing the emissions either epoch-by-epoch or block-by-block.

This will remove a significant trigger forcing stalkers and validators to make a decision in a short period of time while achieving the overall objective.

6 Likes
28

changing emissions is a bandaid to much larger problems. the core issue stems from payrolled and lined pockets pushing agendas because they were asked to. these are the same individuals that have done little to grow the ecosystem or brand recognition yet have a check cut month after month a sad state indeed with no light at the end of the tunnel.

a masquerade to cover the real issues of no mass adoption and no real traction. orchestrated by the same team of individuals with tech prowess and zero community or ecosystem skills, some are excluded from this statement yet are part of the group.

the individuals pushing this will most likely hedge the puts and takes to only enrich themselves further while pushing the price lower.

I will vote NO for this proposal in favor of a multi-fold strategy that brings radical change to those that have perpetrated the ecosystem in favor of their tech focused ventures with little adoption. on one hand you stick your neck out and go against the hand that feeds you and on the other the hand that feeds should not exist, which shows the systemic failure in crystal clear view.

The house of stake will do little to solve this dilemma as the very same perpetrators control the stake. near has become a haunt of insiders. the tech is solid, but until these individuals are held to account, the command and control stranglehold removed and the foundation spun down. no real change will occur only a shuffle of cards.

I love near. been here since day 0, have done some really big things. tried hard to breakdown the insiders. still building. still believing. validators vote no. this will be your last stand. your one and only vote.

ok. this is sentiment analysis with suppositions and predicates that the price might improve. who actually cares which stakeholders? there is no confidence with in near. we are the ai chain, but we lower emissions because ai can not build an economy. laughable. increase the emissions to that point.

the net net: near does not have web3 market traction. to many chains. no real narrative. more expensive then web2. no one cares what’s under the hood. you want number go up. on board killer teams to build killer apps and ship day and night. most L1’s and L2s dry up in next three years. this moment is not about emissions. its about survival.

change my mind. …

6 Likes
29

I agree with this statement regarding the Community:

  • The community is almost dead (Shitzu, Black Dragon, are still alive).
  • The ecosystem is dead.
  • Money is handed out to projects with zero reporting, and these same people get chosen as delegates for the House of Stake. I even started a blog because, as usual, NF filters the news — splitting it into what they can share (“good progress”) and what must be hidden — centralizing everything.
  • Newcomers to NF, like @lane, quickly figure out how it works here: instead of doing real work, they write praise posts about how they touched an NF *“co-founders backpacks”, create endless roadmaps, throw parties in Cannes, and hire people for absurd salaries with no accountability — just to spend more time traveling and writing questionable articles.
  • Lane, who spent years working closely with Buterin, comes into our ecosystem and is now trying to bring back centralization inside the Community. This is genuinely insane — it’s a rollback to web0. Try telling anyone about it — they won’t believe you. This attitude only happens when you genuinely hate the ecosystem and couldn’t care less about web3 values.

Re: Governance

@gauntlet, which still hasn’t managed to launch governance properly for over a year, together with the NF — which has never been known for speed, unlike the community (it’s hard to even guess how much money has already been wasted on this) — brought in delegates from the Arbitrum blockchain, instantly creating countless conflicts of interest, especially considering that Arbitrum is also working on AI. One of the delegates even called this a ‘crazy experiment’ — which is probably the most accurate word for it.

Still, there are talented people in NF who keep supporting the community despite all this mess.

*By ‘touching co-founders backpack’ I mean posts on any topic, full of flattery and zero criticism or real thoughts of their own by “Yes Man” people. That’s basically the formula for long-term survival inside the NF.

3 Likes
30

The idea of centrally planned scarcity, enforced from the top down, reflects a kind of command economy logic that decentralized systems were meant to leave behind.

Instead of letting market dynamics signal what capital should earn, we’re discussing quotas, ceilings, and managed perception. A 5% inflation rate — if it incentivizes real usage, security, and ecosystem growth — is not a problem.

But to arbitrarily decree 2.5% emissions as the correct number, regardless of adoption curve or network needs, is to substitute ideology for flexibility.

When token supply is governed by narrative rather than demand, we begin to resemble systems that prized control over coordination, and scarcity theater over actual economic signal.

Crypto wasn’t built to be curated.
It was built to be free.

2 Likes
31

We (LunaNova) understand the concerns about reducing inflation and that this action alone won’t solve all the issues. However, there is a strong case that the current level of issuance is simply unsustainable and taking action now is the right thing to do. Consequently we will be voting yes on this proposal, as we believe it is in the best long-term interests of the protocol and its stakeholders.

1 Like
32

It’s great to see a proactive approach to ensuring validators and delegators are supported through this transition. Creating incentives for both sides, especially community validators is essential for keeping NEAR decentralized, secure, and accessible. Looking forward to seeing this evolve with input from across the ecosystem.

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A vote in favor.

I will vote yes and advocate that we consider introducing the reduction gradually. I believe this a step towards adapting to the realities of lessons learned since the mainnet launch. Ideally we will continue to conduct research and have debates on changes to protocol economics and other incentive mechanisms that would improve our positioning in the short and longer term.

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Hey everyone,

First, we want to say we really appreciate all the hard work that’s going into making NEAR stronger and more sustainable.

The intention behind this change is clear and understandable—aligning tokenomics with broader goals like increasing NEAR’s attractiveness and ensuring long-term value creation.

However, as an active validator, we would like to raise a few important points and questions for consideration:

What if things don’t go as planned?
Is there a backup plan in case this move doesn’t lead to the expected increase in token price or demand? We’d feel more confident if there was some kind of fallback strategy in place.

Support for validators
We’re aware of the Meta Pool support program and think it’s a great initiative. But honestly, it might not be enough on its own. Are there any other ideas being explored to help validators stay afloat?

Why not reduce gradually?
A phased reduction might ease the transition and give the network time to adapt. Was a gradual approach considered?

Minimum validator fee?
With lower rewards, there’s a risk that the stake will concentrate even more. Would it make sense to introduce a minimum validator fee to help encourage more even stake distribution and support decentralization?

Can we see the modelling?
It was mentioned that some modelling and calculations were done around this proposal. @Bowen If possible, we would like to take a look at those—they could help everyone better understand the thinking behind the numbers.

We support NEAR’s vision and want to contribute to the network’s robust and decentralized future. I’m looking forward to hearing what the team and community think.

Cheers,
The Everstake Team

7 Likes
35

The push to reduce emissions again ignores the core issue: fiduciary duty. Validators have a duty to their delegators — not to the Foundation, not to optics, and certainly not to token burn ideologues.

We’ve seen how this ends. Cosmos, EOS, Polygon — all pushed aggressive emission cuts or similar changes with the hope of “price appreciation” and “long-term sustainability.” What they got instead was capital flight, collapsing staking participation, and no meaningful improvement in price action.

Reducing staking APY in a weak DeFi ecosystem (like NEAR’s) removes the last major incentive to hold and stake. It’s not deflationary, it’s demand-destructive.

Unless there’s a clear yield alternative that matches or exceeds staking, this proposal gives whales a binary choice:
Accept half the yield, or sell.
And we all know what some will do - enough for this to backfire disastrously.

If NF wants to improve token economics, focus on creating demand sinks. Grow real usage. Stop patching the price chart with amateur monetary policy experiments. You can’t “cut your way to growth.”

Until then, it’s irresponsible to pretend this is anything but a reputational risk and an economic drag on long term multi year stakers, who count on the APY to cushion the horrible price action since 2021.

3 Likes
36

If the goal is to craft a proposal that can pass the fiduciary duty test for professional validators, it likely needs to include:

1. Risk modelling and contingency planning.
Show what happens in multiple market conditions (bull, crab, bear). What if price doesn’t move or even drops? What’s Plan B?

2. Clear, measurable upside.
Back it with data: why would this increase price or demand? How would that benefit all stakeholders, not just a narrative?

3. Mitigation of capital flight.
Recognize that tens or hundreds of millions of NEAR currently staked may not move into DeFi. Show where that capital would go. De-risk the “either accept half APY or sell” dilemma.

4. Gradual rollout.
A phased reduction allows the network to adapt. Abrupt changes raise red flags for fiduciaries managing client capital.

5. Broad stakeholder alignment.
Have buy-in not just from core contributors but from DeFi builders, large validators, and ecosystem dApps. Anything that looks Foundation-driven alone won’t be trusted.

If a future proposal included these, it would be easier for fiduciary-bound validators to vote “yes” in good conscience.

1 Like
37

Thanks for sharing. In response to each of your points:

  1. I agree that proposals should be objective and weigh both pros and cons. It seems that the replies are surfacing some of the possible cons, but if there are more, it would be great to understand them.

  2. I’m not sure it’s possible to time the release of a proposal (and subsequent implementation period) in coordination with market dynamics. One of the replies to your post suggests NF is trying to push this through now before HOS is set up, ie so NF has more influence in the decision. If that’s the case, I am personally ok with it (sometimes decentralized ecosystems just need a strong centralized actor to make tough decisions), but would understand how it might appear as overly centralized.

  3. I personally believe we are at a critical inflection point in mainstream adoption, market cycle, and it’s the time to do whatever we can to be a first mover. Said another way, with institutions coming on board to invest in $near, it’s important they see strong price action. And I think the next 6-12 months are critical.

  4. There’s no guarantee defi will increase on near if the proposal passes, but it’s plausible. Historically, Near has not done well with defi but Rhea and Intents currently have really good momentum. So it’s important to acknowledge that, despite the momentum being recent.

  5. This is probably the most valid comment I’ve heard here and I haven’t heard it expressed before. We definitely need as many validators as possible and I am in support of NF, Metapool or whoever to do whatever is needed to help smaller validators transition during the inflation reduction transition. I think you should push harder to help others understand the issue and maybe the community can find a way to support during the transition.

  6. I think everyone agrees that the proposal is necessary but not sufficient for long term token success, which will ultimately depend on more projects, more users, more transactions, and more token use. That will develop over time.

2 Likes
38

Some validators may want to pause and reflect on how proposals like this align with their fiduciary responsibilities.

If you represent external delegators, LPs, or institutional clients, voting to halve staking rewards without clear modeling of long-term tokenholder benefit may not hold up to scrutiny. Fiduciary duty isn’t based on vibes.

Gauntlet’s Economic Security Ratio (ESR) modeling is narrowly focused on security—not on economic value accrual to tokenholders. It is silent on whether this proposal improves NEAR’s adoption, price performance, or protocol revenue. If Gauntlet has performed any further modeling that quantifies these broader impacts, it should be shared with the community as soon as possible.

Abstaining is a responsible choice when outcomes are unclear. Some validators have rightly taken that path. Others may wish to review whether their internal decision-making process meets the standard expected when fiduciary duties are in play.

5 Likes
39

Makes sense to cut inflation. 5% is too high with such low fee burns. 2.5% is more sustainable and keeps staking yields decent. NEAR needs to stay competitive.

1 Like
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Most of opinions for reducing inflation rate are non scientific. I’ve published a scientific paper that finds only moderate correlation between tokens inflation rate and price action. Correlation is only 0.43. I can share the research is requested, I can’t post links here.

Also I’m strongly against current discrimination of pools that have voted ‘Nay’. Near Social Zavodli widget shows Nay votes as Not Voted and make a call to unstake from such validators. This is discrimination based on opinions. How can this be happening in 2025.

3 Likes
41

:fire: First of all, we want to thank the NEAR community for the incredible level of engagement over the past weeks. It’s been inspiring to see how deeply so many of you care about the long-term health of the ecosystem. The thoughtful feedback, open debates, and alternative suggestions have all shown how alive and resilient our community really is.

There’s one thing we all seem to agree on:

:white_check_mark: NEAR needs lower inflation.

But opinions differ on how exactly that should be implemented.

We’re all here because we want NEAR to succeed — and this proposal aims to reflect the feedback while keeping the process simple, fair, and executable.

:white_check_mark: Updated Proposal

We now propose a gradual, linear reduction of inflation to 2.5% over the next 12 months .

  • The reduction will occur epoch by epoch, ensuring a smooth transition for validators and delegators.
  • This gives the network time to adapt without disruption, while still achieving the goal of reduced inflation and healthier tokenomics.

:ballot_box_with_ballot: Governance Voting Threshold Update

In parallel, we propose improving the governance process to make it both more decentralized and effective:

  • A proposal will pass if:
    • At least 34% of total staked NEAR participates in the vote
    • Of those, 67% must vote YES for the proposal to be accepted
    • Voting period 21 days

We believe this strikes a good balance between ensuring wide participation and avoiding governance paralysis.

Let us know your thoughts — and thank you again for helping shape NEAR’s future.

Together, we build.

1 Like
42

Mr. Noname, maybe it’s time for some honesty.

For the past four years, you’ve been profiting from validators and endless grant money poured into your loss-making projects like Hot and other not-profitable scammy ventures.

Your Near Prime takes 100% of the fees — from funds given to you by NF. Now you’re using this new platform Kalux to offload tokens to community that you, Ilya, and NF originally invested in.

And suddenly, you’re proposing to change quorum rules — just when it suits you?

Where were you before? Why do people like you only show up with “solutions” once you’ve made your money and walked away with the upside?

1 Like
43

Appreciate the engagement and the tone here, but I want to respectfully push back on a few key points:

“Everyone agrees NEAR needs lower inflation”

That’s simply not true outside the echo chamber of a few voices. Many validators, community members, and builders have raised concerns — not about resisting change, but about the lack of evidence supporting this specific type of change. Saying there’s consensus when there isn’t only undermines trust.

Still no empirical foundation

Even with the proposed gradual reduction, there is still no modeling, no simulations, no economic analysis shared publicly beyond the narrow scope of the ESR analysis, that demonstrates this will positively impact token price, usage, or validator sustainability. It’s another iteration of:

“Let’s try this — maybe it’ll work.”
That might be acceptable in the experimental early days of a project. But when billions in assets are at stake, it’s simply not enough.

Quorum change is dangerous

Changing the governance threshold to 34%+ participation with 67% YES is risky without safeguards. It creates a “wear them down” dynamic, where controversial proposals can be repeatedly pushed until people stop voting NO out of fatigue. That’s not effective governance — it’s attrition warfare. And it favors centralized coordination over true decentralization.

Still missing: holistic diligence

No serious public discussion yet on:
• Historical learnings from Cosmos, EOS, or Polygon emissions cuts
• Impact on validator economics or network decentralization
• Risks of concentrating stake further as margins shrink

With the caliber of minds at NEAR and Gauntlet, the community expects more than broad brush intuition and narrative. We owe it to everyone to only back policy changes that have rigor, transparency, and economic evidence behind them.

Until that happens, this remains a high-stakes YOLO dressed up as a refinement.