NEAR Inflation Halving Voting Begins, 12% Staking Weight Needed
The Near Foundation is proposing an inflation halving for NEAR, reducing the token's yearly emission from 5% to 2.5%. Voting on this proposal began on October 28, and 68.41% of block-producing validators currently support the reduction, nearing the 80% threshold needed for approval.
- The nearcore v2.9.0 release proposed this change, requiring validators to upgrade to Protocol Version 81 if they support it. Those opposing remain on Version 80.
- The voting period ends 23 days from October 23. Approval requires 80% staking weight, activating in the next epoch (43,200 blocks or 7-8 hours).
- Currently, 67 validators have upgraded, signaling "YES" with 68.41% support, while 33 remain on the old version, temporarily signaling "NO".
Controversy and Discussions
- The proposal has sparked controversy as validators would receive half the current rewards if approved. Some industry-level staking providers oppose both the reduction and the governance mechanism.
- NEAR co-founder Illia Polosukhin states that the governance method used is standard procedure since the mainnet launch.
- Institutional investors like Andrei Gachev from DWF Labs have expressed intentions to increase their NEAR holdings if inflation is reduced, indicating potential market impacts.
In parallel, MultiversX, another sharded blockchain, recently voted to remove a hard cap and introduce a maximum tail emission for EGLD.