The NEAR token experienced a roughly 7% decline on Tuesday, trading at $3.82 as of 11:06 am UTC, despite the community's approval of a measure designed to reduce long-term inflation. This drop extended the asset's weekly losses to approximately 13%, according to data from CoinMarketCap.
The price movement followed the Monday approval of proposal HSP-029 on the NEAR House of Stake governance platform. The initiative secured support from 99.9% of participating voting power, with approximately 3.28 million vote-escrowed NEAR (veNEAR) tokens cast in favor. The approved plan aims to gradually lower the maximum annual issuance rate from 2.5% to 1.6% over a 24-month period.
Proponents of the measure estimate that the reduction will prevent 11.8 million NEAR tokens from entering circulation over the next two years, representing a value of about $45 million at current prices. Over a six-year horizon, the proposal projects a total issuance reduction of 66.1 million tokens. While this move is intended to curb token dilution, it is also expected to lower projected gross staking yields from 5.2% to 3.3% by the end of the implementation period.
The proposal is not yet final and remains subject to a 14-day veto window held by the Security Council. If no veto is issued, the measure will be ratified and followed by a 90-day grace period before the issuance reduction officially begins. Full implementation also requires validators to adopt the necessary technical upgrades.
Sources: Cointelegraph.