Near Protocol has finally completed its closely watched halving on mainnet, a crucial milestone for the blockchain’s economic evolution.
Notably, the move reduces NEAR’s maximum yearly inflation rate by half, from 5% to 2.5%.
That significantly reduces the rate at which new NEAR assets enter circulation.
Moreover, staking rewards will adjust to 4.75% presuming half of the overall NEAR supply is staked.
The team believes a sustainable inflation model could encourage on-chain participation. Today’s announcement read:
This upgrade reduces the maximum annual inflation rate of NEAR Protocol from 5% to 2.5%, ushering in an era of more sustainable tokenomics and strengthening incentive alignment across the NEAR ecosystem.
NEAR has successfully completed its halving upgrade on mainnet.
This upgrade reduces the maximum annual inflation rate of NEAR Protocol from 5% to 2.5%, ushering in an era of more sustainable tokenomics and strengthening incentive alignment across the NEAR ecosystem.
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The innovative approach looks to enhance the protocol’s tokenomics with sustainability, while prioritizing long-term alignment between users, developers, and validators in the ecosystem.
Most importantly, the rollout was smooth, without disrupting network performance. That likely underscores Near Protocol’s technical maturity.
With reduced inflation, the digital token joins the increasing trend among leading blockchains that adopt rapid growth models for more balanced, value-centric frameworks.
Near Protocol adopts sustainable tokenomics
The halving upgrade showcases NEAR’s deliberate intent to curb inflation and create a stable demand-supply mechanism.
Keep in mind that the network used the previous 5% inflation rate primarily to reward validators who ensured the blockchain’s uptime and security.
Now, the platform has reduced inflation to 2.5%, meaning fewer tokens are released per year.
Notably, this limits dilution for long-term NEAR holders and constricts supply that could fuel price performance as NEAR-based applications see a surge in demand.
An official blog highlighted:
The current 5% rate, originally designed to accelerate early-stage participation, now introduces unnecessary dilution.
At the same time, it reduces the incentive for holders to engage in DeFi and other productive activities within the NEAR ecosystem.
Moreover, the halving incentivizes validators to reduce reliance on inflationary rewards and depend on transaction fees as NEAR’s ecosystem grows.
That strengthens economic resilience while encouraging sustainable user participation.
Precisely, the NEAR Protocol is moving into a self-sustaining, more balanced ecosystem.
NEAR price outlook
Near Protocol’s native coin has lost over 10% of its value in the past 24 hours, driven by significant broad market declines.
NEAR is trading at $2.07, with soaring trading volumes signaling increased trader activity.
Chart by CoinMarketCap
An uptick in volume amid bearish price performance suggests participants are exiting positions to limit losses.
NEAR should hold above the $2 psychological mark to support short-term rebounds.
Overcoming the key resistance at $2.80 could support upswings past $3.16.
That would translate to an over 50% increase from NEAR’s market price.
However, prolonged broader market weakness might push the token’s price below $2, which could catalyze continued plunges or extended sideways.
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