NEAR has opened voting on a governance proposal that would reduce token issuance to 1.6%, according to the proposal text. The measure, designated HSP-029, would phase in the cut over 24 months after a 90-day grace period. But the vote alone won't change the network's inflation rate: validators must separately adopt a network upgrade for the new issuance schedule to take effect.
What HSP-029 actually changes
The proposal targets the rate at which new NEAR tokens enter circulation. Under HSP-029, issuance would fall to 1.6% over a 24-month period, with the reduction beginning only after a 90-day grace period. That waiting window gives stakers and node operators time to adjust before the emissions curve shifts.
The 1.6% figure is the endpoint, not an immediate cut. The proposal lays out a gradual decline rather than a single step-down, though the text reviewed does not specify the exact schedule of reductions within the 24-month window. What it does make clear is the sequencing: grace period first, then the multi-year glide path.
Why validators get a separate say
Governance approval is only half the process. HSP-029 requires validators to adopt a network upgrade before the issuance change takes effect. That two-track structure means a successful token vote doesn't automatically alter the protocol. Validators, who run the infrastructure that keeps NEAR producing blocks, must sign off through the upgrade mechanism.
The arrangement isn't unusual for protocol-level changes, but it does mean the proposal's fate rests on two separate decisions. A strong token-holder majority could still be followed by a slower or contested validator rollout. Conversely, validator adoption without broad token support would be unusual given the governance vote underway.
The 90-day grace period
The grace period is the proposal's built-in buffer. Before any issuance reduction begins, there's a 90-day window — presumably to let the network prepare, though the proposal text reviewed doesn't detail specific preparation requirements. For staking providers and applications that model rewards on current issuance, that window is the notice period.
After the grace period, the 24-month reduction timeline starts. The combined runway means the full effect of HSP-029 wouldn't be felt for more than two years from the start of implementation, assuming both the vote and the validator upgrade succeed.
What happens next
The vote is open now. What's not yet settled is the validator upgrade timeline — the proposal requires it, but the facts available don't specify when that upgrade would be proposed or how adoption would be tracked. Until validators act, the 1.6% target remains a governance decision rather than a network parameter.
For token holders, the immediate question is turnout and margin on HSP-029. For validators, it's whether the upgrade gets scheduled. Neither answer is in yet.
