NEAR's decentralized governance body, the House of Stake, has approved a proposal that will eliminate the network's 30% developer gas rebate program. Under the new rule, execution fees that previously went to developers will instead be burned, permanently removing tokens from circulation.
What the proposal changes
The proposal, labeled HSP-027, passed through NEAR's on-chain governance process. It directs all execution fees — the costs users pay to run smart contracts — to a protocol-level burn mechanism rather than sharing 30% of them with the contract developers. The rebate program had been active since NEAR's early days, giving developers a cut of the fees their apps generated.
The change won't take effect immediately. The rebate remains in place on mainnet until the nearcore v2.14 upgrade, which is scheduled for August 2026. That gives developers roughly two years to adjust their business models.
Why the switch to burning
The move is part of a broader tokenomics overhaul under the House of Stake. Supporters argue the burn model makes NEAR's economics simpler and more transparent. Instead of a complex split between validators, the treasury, and developers, all execution fees now go straight to reducing supply.
The idea is to create a direct link between network activity and token scarcity. More transactions and more contract executions mean more fees burned. That could put upward pressure on the price of NEAR tokens if demand stays steady or grows.
The rebate cut will hit developers who relied on that passive income stream. For contracts that generate high fee volume, losing 30% of those fees is a material change. The proposal's authors acknowledge this and suggest developers explore alternative monetization — charging users app fees, introducing subscription tiers, or finding other ways to capture value from their work.
Some developers may see this as a loss of a built-in incentive to build on NEAR. The rebate was a selling point when the network launched. Now they'll have to work harder to earn directly from users.
Uncertain impact on token supply
How much the burn actually reduces supply depends on several moving parts. Transaction volume and fee levels will determine the total fees collected. At the same time, new tokens are still being issued through staking rewards and other mechanisms. The net effect on total supply — whether it shrinks or grows — depends on the balance between issuance and burning.
The broader tokenomics adjustment hasn't been fully detailed yet. HSP-027 is one piece of a larger puzzle the House of Stake is working on. More proposals could follow to tweak inflation rates, staking rewards, or treasury allocations.
For now, developers have until August 2026 to adjust. The rebate stays on until the upgrade lands. After that, every execution fee will go up in smoke.
