Near Protocol's NEAR token fell by roughly 7% on Tuesday, even as the community approved a proposal to gradually reduce the maximum annual issuance rate from 2.5% to 1.6% over 24 months.
NEAR traded at $3.82 as of 11:06 am UTC, extending its weekly decline to roughly 13%, according to CoinMarketCap.
Governance vote
The drop followed Monday's approval of HSP-029, which received support from 99.9% of participating voting power. About 3.28 million vote-escrowed NEAR (veNEAR) tokens were cast in favor, according to the NEAR House of Stake governance platform.
What the proposal would change
According to the proposal, the change is intended to reduce long-term token dilution while lowering projected gross staking yields from 5.2% to 3.3% by the end of the 24-month period.
- Estimated issuance reduction of 11.8 million NEAR over two years.
- Estimated issuance reduction of 66.1 million NEAR over six years.
- The two-year reduction would be worth about $45 million at the current price, based on the proposal's figures.
Next steps
The proposal remains subject to the Security Council's 14-day veto window. If it is not vetoed, it will be ratified, followed by a 90-day grace period before the issuance reduction begins.
Implementation also requires validators to adopt the necessary technical upgrade.
