NEAR is proposing a significant change to its token economics as the network enters a new phase. The ecosystem plans to launch a sovereign fund that would use protocol earnings to fund network security and public goods. The proposal follows other changes, including reduced inflation, NEAR buybacks through the Intents fee switch, and staking for NEAR AI Inference.
The aim is to reduce reliance on inflationary issuance while putting treasury assets to work. If it succeeds, it would change how the network funds validators and other infrastructure.
Why NEAR Is Moving Away From Inflation-Funded Security
As per the discussion, NEAR Foundation CEO Illia Polosukhin said that the first five years of mainnet would be available as a bootstrapping period. With the network generating funds, reaching fully unlocked supply and creating distributed governance through House of Stake, he says that the monetary model can grow more.
The idea focuses on creating a sovereign fund, handled under regulatory parameters and designed to create NEAR-denominated yield. Initially, the fund would draw on the existing protocol treasury of roughly 30 million NEAR. The resulting revenue would support public goods, including the Validator Support Program and MPC providers.
The proposed idea deals with a major problem across proof-of-stake networks. Inflationary issuance is typically used to pay validators and encourage users to stake. But a network issues new tokens to fund security, holders who do not stake see their share diluted over time. NEAR has already moved to decrease that reliance. Inflation was cut by roughly half in late 2025, and the ecosystem launched an Intents fee switch directing fees toward NEAR buybacks. It will also be launching staking for NEAR AI inference. The sovereign fund proposal takes the next step by making protocol revenue productive rather than funding security through token emissions.
How the Sovereign Fund Would Work for Stakeholders
This idea draws inspiration from those practiced in Norway and Singapore, where collected revenue from sources is invested to generate long-term returns. These returns in-turn are used for public spending. NEAR’s model would use a similar concept to its own ecosystem, instead of extra token usage generated through revenue. The revenue would acquire and accumulate NEAR and yield from those gains. The resultant income would then support safety and public goods.
That distinction matters, since burning tokens reduces supply while a productive treasury provides a continuing funding source. As per the report, the proposal argues that burning tokens may help in the short term but does not fund the network long term. If inflation ends, the ecosystem would lose upcoming emissions that help fund safety. The proposed idea addresses both problems at once, reducing inflation while building a treasury capable of generating revenue.
On top of that, House of Stake would provide governance oversight, letting delegates participate in decisions about the fund. The Validator Support Program would extend to bring in more validators into the new structure. This would help NEAR to progress and decrease inflation. It would also shift validator gains towards the new model.
For stakeholders, security funding would no longer depend solely on token issuance, drawing instead on product revenue and treasury returns. The model carries risk, since generating yield denominated in NEAR introduces market exposure a conventional treasury would not have. The proposal acknowledges this and notes that diversification would be required.
The plan is less of a token economics overhaul than an experiment in finding a better model. If NEAR can convert revenue into a productive treasury, it would shift the network from reliance on emissions toward self-funding.
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