NEAR's on-chain governance body, House of Stake, has approved a proposal that will scrap the developer gas rebate and instead send all network fees to be burned. The change, passed as proposal HSP-027, was confirmed Monday by NEAR co-founder Illia Polosukhin.
What the proposal changes
Until now, a portion of gas fees paid by users on NEAR was rebated to the developers who wrote the smart contracts those users interacted with. That rebate is gone. Under HSP-027, every fee collected from transactions will be permanently removed from circulation — burned, in crypto parlance.
The move effectively rewrites the economic incentives for builders on the network. Developers who once counted on a cut of transaction costs to offset their expenses will have to adjust their models. The burn mechanism, meanwhile, is expected to reduce the total supply of NEAR tokens over time, a feature many blockchain projects use to signal scarcity.
Why the change now
The House of Stake, NEAR's on-chain governance body, operates through a voting process where token holders decide protocol upgrades. The exact rationale for HSP-027 wasn't detailed in the announcement, but the shift to a full burn model aligns with a broader trend across proof-of-stake networks. Ethereum, for example, began burning a portion of fees after its 2021 London upgrade.
Polosukhin's confirmation on Monday gave the proposal finality. No further votes or delays are expected.
For developers, the loss of the rebate means one less revenue stream. Some may pass costs to users through higher dApp fees or seek alternative funding like grants. Others might simply accept the change as part of the network's evolution.
For regular users, the impact is less direct. Transaction fees themselves aren't changing — only where they go. But if developers raise prices to compensate, the cost of using NEAR-based apps could creep up.
The burn mechanism could also affect token economics. With fewer NEAR tokens entering circulation, holders might see deflationary pressure over time. That's a double-edged sword: it can boost token value but also make the network more expensive to use if demand doesn't keep pace.
The change takes effect once the proposal is fully implemented on the network. No specific date has been set, but governance proposals on NEAR typically go live within a few days of approval. Developers and users will be watching closely to see how the new fee structure plays out in practice — and whether the promised deflationary effect materializes.
