NEAR Overturns Failed Ballot, Sparks Discussion on Governance

The

has enacted a major decrease in token inflation, lowering its yearly supply growth from 5% to 2.5% as of October 30, 2025, even though an earlier community vote on the matter did not pass, according to .

This reduction came after a complicated two-step voting procedure. The first stage, a community vote held in August 2025, failed to reach the necessary 66.67% approval, with only 89 validators (45% of those voting) backing the proposal, as reported by Brave New Coin. Despite this, the development team proceeded by including the change in a software update (nearcore v2.9.0), which required 80% of validators to upgrade to Protocol Version 81 for activation, according to

. By October 28, 68.41% of validators had completed the upgrade, surpassing the threshold and activating the change. Co-founder Illia Polosukhin defended this method as being in line with NEAR’s five-year governance framework, enabling the network to address a significant economic issue: spending $140 million per year on validator incentives while earning just $17 million in revenue since 2020, as highlighted by Brave New Coin.

This move sparked strong backlash from key stakeholders. Chorus One, a staking provider overseeing $2.3 billion in assets, criticized the decision as setting a "dangerous precedent," claiming it compromised the integrity of governance by letting developers override a failed vote, according to Brave New Coin. The firm clarified that their objection was to the circumvention of community consensus, not the inflation reduction itself. On the other hand, backers such as DWF Labs—who had committed to purchasing 10 million NEAR tokens if the proposal succeeded—argued that the cut was essential for the protocol’s long-term health, as noted in the same report.

The dispute brings to light broader issues in blockchain governance. Although NEAR’s House of Stake system is designed to formalize economic choices, implementing the inflation cut through a validator software upgrade—rather than a community vote—raised concerns about decision-making authority and openness. CTO Bowen Wang supported the process, explaining that changes to economic parameters need consensus-level approval to maintain network unity, according to Brave New Coin. However, critics caution that such adaptability could undermine confidence in decentralized governance systems.

Market response was varied. Following the announcement, NEAR’s price dropped 8% to $2.10, though this reflected a wider decline in the cryptocurrency market. Experts are split on the long-term effects, with some comparing the move to Bitcoin’s halving events, where lower supply inflation has historically led to price increases, as observed by Brave New Coin.

As NEAR continues to balance governance challenges, the results may influence how other blockchain projects manage the tension between practical economic decisions and the foundational ideals of decentralization. This ongoing debate highlights a core issue in crypto: finding equilibrium between efficient decision-making and the decentralized ethos that many projects strive to uphold.