Near Community Proposes Inflation Reduction for NEAR Token Economy

According to PANews, the Near community has introduced a proposal aimed at improving the NEAR token economy by reducing the maximum inflation rate from 5% to 2.5%, while maintaining flexibility for future adjustments. If transaction fees are burned at approximately 0.1%, the actual inflation rate could decrease to 2.4%. The proposal also suggests lowering staking yields or incentivizing token holders to participate in decentralized finance (DeFi). The current fixed annual inflation rate of 5% has led to an increase in circulating tokens, equity dilution, and token devaluation due to minimal transaction fee burning. However, the proposal currently has a support rate of only 7.42%, with 36 days and 22 hours remaining until the voting period concludes. Opponents argue that reducing validator incentives by 50% would render their nodes unprofitable, potentially decreasing the number of validators and stakers. They also question the strong correlation between inflation rates and price performance.