If you don't nurture your tokenomics, even if you are a good crypto project that might bring your downfall. I have seen this happening over and over again, even with some of my investments. Some of them wake up and corrected their tokenomics through burning mechanics and lowering the supply through different schemes (CAKE), while others didn't (WAX). And while the first one started to grow back and there is a lighter future, the other ones is just milked day after day until it will go to zero. And while this proves the theory, it is great to see that one of the projects that I have invested not a long time ago (NEAR Protocol) on which I am already at 100% ROI, takes a step further and proposes to cut inflation from 2.5% to 1.6%. And if you think that this action plans to be initiated just in a few days while we are in between bearish and bullish times, there is so much better for its future.
NEAR Protocol already improved significantly last year when NEAR's maximum annual issuance was reduced from 5% to 2.5%. Now the community is considering another reduction — this time from 2.5% to 1.6% over 24 months. The proposal, submitted by SVRN CEO Sal Ternullo, would not make the reduction overnight. Instead, the token rate creation and distribution would gradually decline every epoch until reaching 1.6%. There would also be a proposed 90 day grace period before the reductions begin. Importantly, the current 90%/10% split between stakers and the treasury would remain unchanged. The vote for this proposal is scheduled to take place by October 11, 2026 (via the House of Stake vote) and I can barely wait to see its result. I hope it passes as that would strengthen NEAR protocol tokenomics and will put it in a better position in the incoming bull run cycle.
At the current rate of 2.5%, about 89,500 new NEAR tokens are created every day. If we would be moving towards 1.6% and doing some math, that could prevent approximately 66 million NEAR from being issued over six years. That's a significant amount of potential dilution removed from the equation. But in the same time, there is a trade-off to this, but I believe it's effect is not at the same levels as letting the supply inflated as currently programmed. Lower inflation also means lower staking rewards. Estimates in the proposal suggest staking yield could eventually fall from 5.4% to about 3.5% at the 1.6% target. So NEAR holders who stake would receive fewer newly issued tokens which might make the ecosystem less appealing for them. Personally, I think this is an acceptable trade as I expect the price to compensate for a lower return from rewards.
For me, if the proposal passes, it is another reason to keep holding NEAR asset while waiting for the next bull cycle to kick in. I already consider NEAR one of the more interesting assets in my portfolio, particularly because of its AI and Intents narrative (while being also confidential through not a long ago added feature). If we're potentially getting lower inflation that would mean that the supply will not go crazy which should strengthen NEAR price in time. When I invested in it I have considered it a high risk asset (as compared with other tokens that I hold like Bitcoin, Ethereum or BNB), but with improved tokenomics that risk could be lowered. So while I was thinking for it to be a quick trade, I might hold it longer awaiting for the market to reach its full potential and pull NEAR to new ATH as well.
