Background: Community Suggests Burning Foundation Tokens
The NEAR Protocol community has recently engaged in discussions around tokenomics optimization. User @KYSb_q proposed two suggestions: first, to burn a portion of the NEAR Foundation's token holdings, following the Hyperliquid model; second, to upgrade the existing buyback program to further reduce circulating supply and enhance scarcity. Earlier, another community member @zacodil pointed out that NEAR has already directed 100% of its Intents fee revenue into market buybacks and has reduced its inflation rate from higher levels to 2.4%.
Co-founder's Response: Burning Inefficient, Precedents Exist
In response to these suggestions, NEAR co-founder Illia Polosukhin posted a statement on social platform X. He explicitly said that burning foundation funds is a 'very inefficient way' and noted that other public blockchain ecosystems have tried burning foundation funds without achieving substantial gains. This stance directly rejects the aggressive burn approach, hinting that NEAR will adopt a more prudent strategy for token supply management.
New Proposal: Path to Fixed Supply and Timeline
Polosukhin also revealed that he is preparing a new proposal that will take a different approach to planning NEAR's path toward a fixed supply. The proposal is expected to be implemented within the next few years. This indicates that the NEAR team is not satisfied with current inflation control and seeks structural adjustments to transition from a dynamic inflation model to a capped total supply. Notably, NEAR has already reduced its inflation rate to 2.4% through buybacks and fee burning, but has not yet committed to an absolute supply ceiling.
Market Impact and Community Reaction
Although Polosukhin dismissed the idea of directly burning foundation tokens, the market reacted mildly positively. The NEAR token price saw a brief uptick following the announcement, reflecting community support for the 'fixed supply' direction. However, analysts note that burning foundation funds and establishing a fixed supply mechanism are two very different paths: the former reduces circulating supply in one go, while the latter sets a long-term cap at the protocol level, potentially having deeper implications for stakers and validators. The market now awaits detailed information on the new proposal, including the specific fixed supply number, implementation timeline, and adjustments to the existing economic model.