NEAR Protocol Token Drops 7% Following Approval of Token Issuance Reduction Plan

NEAR Protocol Token Drops 7% Following Approval of Token Issuance Reduction Plan

NEAR experienced a 7% decline on Tuesday, even as the community voted to approve a measure reducing yearly token issuance from 2.5% down to 1.6%

The NEAR token from Near Protocol experienced an approximately 7% decline on Tuesday, even though the community voted in favor of a measure that would progressively decrease the maximum yearly issuance rate from 2.5% down to 1.6% across a 24-month timeline.

As of 11:06 am UTC, NEAR was changing hands at $3.82, pushing its week-to-date losses to approximately 13%, based on data from CoinMarketCap.

The most recent price decline came after Monday's passage of HSP-029, a proposal that garnered backing from 99.9% of the voting power that participated in the decision. Data from the NEAR House of Stake governance platform shows that approximately 3.28 million vote-escrowed NEAR (veNEAR) tokens were submitted in support of the measure.

The approved measure aims to decrease long-term token dilution while simultaneously bringing down anticipated gross staking yields from 5.2% to 3.3% by the conclusion of the 24-month implementation period. According to projections, issuance would decrease by 11.8 million NEAR across two years and by 66.1 million NEAR across six years.

The approved measure is currently subject to a 14-day veto window held by the Security Council. Should no veto be issued, the proposal will move forward to ratification, after which a 90-day grace period will commence before the issuance reduction takes effect. The implementation additionally requires validators to integrate the required technical upgrade.