NEAR Protocol Cuts Inflation in Half Despite Failed Community Vote

NEAR Protocol implemented a significant reduction in its token inflation rate, cutting the annual creation of new NEAR tokens by roughly half, which lowers validator staking rewards from 9% to 4.75%. This move was necessitated by the protocol's unsustainable economics, where annual validator rewards ($140 million) far exceeded its meager revenue ($17 million since 2020).

The change followed a controversial governance process. An initial community vote in August 2025 failed to pass, as it only achieved 45% approval against a required 66.67%. However, the development team subsequently included the inflation cut in a protocol upgrade (nearcore v2.9.0), requiring 80% validator approval via software upgrade. By October 28, 68% of validators had upgraded, activating the change on October 30.

This circumvention of the initial vote drew criticism, notably from Chorus One, which argued it set a "dangerous precedent" undermining governance integrity. Supporters, including co-founder Illia Polosukhin and investors like DWF Labs, argued the economic survival of the network superseded strict adherence to initial governance rules. The situation highlights the ongoing tension in decentralized networks between economic necessity and decentralized decision-making, with NEAR transitioning to a new "House of Stake" governance system for future economic parameter changes.

(Source：Brave New Coin)