To support a more sustainable tokenomic model and strengthen incentive alignment across the ecosystem, nearcore version 2.9.0 reduces the maximum annual inflation rate of NEAR Protocol from 5% to 2.5%. This upgrade will become effective once 80% of stake of block producing validators choose to adopt it. For more details on upgrading your mainnet node, please see the 2.9.0 release notes.

This initial halving upgrade is a principles-driven and adaptive approach to maintain sustainability of issuance around the NEAR token, while also laying the foundation for a long-term and systematic inflation strategy. This upgrade is based on community feedback and a broadly supported initial proposal across the NEAR ecosystem. Going forward, House of Stake will play a critical role in the decision-making process around the economic parameters for the NEAR ecosystem.

Timeline and Details

If the vote passes by end of the epoch that includes 01:00:00 UTC on Tuesday, October 28, 2025, the protocol is expected to upgrade to version 81 approximately 7-8 hours after that voting epoch ends.

Conversely, if the vote does not succeed within the designated timeframe, the voting window may remain open for up to an additional 23 days. In this scenario, the protocol upgrade to version 81 is expected to occur in the epoch following the one during which more than 80% of stake has been upgraded.

There will not be any forking of NEAR Protocol because such an upgrade will not be effective until the threshold has been reached.

As inflation is reduced to ca. 2.5%, staking rewards will accordingly change to 4.75%, assuming 50% of the total supply remains staked. To support this transition, MetaPool, LiNEAR, HOT_DAO, and Gauntlet have proposed two complementary programs strengthen incentive alignment across validators and House of Stake governance participants:

  1. Proposal – HSP-002: Support smaller validators to ensure network decentralization
  2. Proposal – HSP-003: Increase rewards for veNEAR holders to reward early governance participation

Proposal HSP-002 is contingent on NEAR Protocol successfully reducing its inflation to 2.5%, and HSP-003 assumes HSP-002 has been approved and implemented. To read the full proposals, discuss them with the wider NEAR community, and gain governing power, join House of Stake today.

Conclusion

NEAR’s initial inflation rate, set over five years ago before mainnet launch, was designed to bootstrap an active validator set. Today, the network has over 300 active validators and uses a stateless validation security model, increasing cost-efficiency and eliminating the need to reward actors for monitoring and ensuring the security of shards. This halving upgrade and two complementary proposals aim to transition NEAR toward a more sustainable inflation model, while ensuring network decentralization and long-term incentive alignment across validators and NEAR token holders.

With NEAR now facilitating multi-billion dollar volumes and generating new sources of fees through NEAR Intents and future AI products, these economic enhancements help ensure the sustainable growth of the protocol for the long term and create economic opportunity for as many actors across the NEAR ecosystem as possible.

To support these enhancements, please upgrade your mainnet node today and vote on the proposals in House of Stake.