NEAR’s Half-Baked Inflation Cut: A Farce in Decentralization 🎭💸

In a move as audacious as a baronet marrying his mistress, NEAR Protocol has halved its inflation, slicing the annual creation of new tokens like a sommelier through a bottle of claret. This means a paltry 60 million fewer tokens will clutter the market each year. Staking rewards, once a plump 9%, have been trimmed to a meager 4.75%-a diet so severe, one wonders if the validators are preparing for a season at Ascot. 🧐

The Pecuniary Predicament of NEAR

NEAR Protocol, darling, was in a financial pickle as tart as a lemon meringue. The network, with the generosity of a spendthrift heir, was lavishing $140 million annually on validators to keep its blockchain humming. Yet, its coffers held a mere $162 million in total value locked, and since its launch in 2020, it had scraped together only $17 million in revenue. Last month’s earnings? A laughable $259,116-hardly enough to cover a weekend in Monte Carlo. 💰

The arithmetic was as unsound as a second marriage. Spending far exceeded earnings, and the token burn rate-a paltry 0.1%-was as effective as a wet firework. Something had to give, or NEAR would find itself in the financial equivalent of a Dickensian workhouse. 🏦

Enter the community, with a proposal as bold as a debutante’s first waltz: cut inflation to stem the bleeding and coax life into NEAR’s moribund decentralized finance ecosystem. A sensible plan, one might think, but this is crypto, where sense often takes a backseat to drama. 🎭

Two Votes, Two Farces

The farce began in August 2025, with a community vote as contentious as a family gathering at Christmas. Eighty-nine validators, representing 45% of participants, supported the inflation cut. Alas, NEAR’s governance rules demanded a two-thirds majority, and the proposal failed as spectacularly as a first-time fox hunter. 🦊

Undeterred, NEAR’s development team-clearly not ones to let a little thing like a failed vote stand in their way-included the cut in a protocol upgrade, released with all the subtlety of a brass band at a funeral. Validators were invited to signal their support by upgrading to nearcore v2.9.0, a process requiring 80% approval. Democracy, it seems, is a flexible concept in the crypto realm. 🛠️

By October 28, 68% of validators had upgraded, and by October 30, the threshold was met. The upgrade went live, leaving one to wonder if the vote was merely a formality-a charade for the masses. 🎭

Why Validators Voted Against Their Own Purses

The validators, in a move as baffling as a peer voting for a Labour government, agreed to halve their own rewards. Why? Because, as Illia Polosukhin, NEAR’s co-founder, explained, the network’s survival was at stake. Five years of the same governance system had left them with little choice but to tighten their belts-or risk the whole edifice crumbling like a poorly constructed sandcastle. 🏰

Major investors, such as DWF Labs, threw their weight behind the change, promising to buy 10 million NEAR tokens if the cut passed. One can only imagine the backroom deals and champagne-fueled negotiations that preceded this announcement. 🥂

The Rebellion of Chorus One

Not everyone was amused by this high-handed approach. Chorus One, a staking provider managing over $2.3 billion in assets, took to X (formerly Twitter) to denounce the decision as a “dangerous precedent” that undermined NEAR’s integrity. Their concern? That NEAR’s core team could bypass failed governance votes with the ease of a society matron avoiding a scandal. 🤬

Chorus One refused to upgrade its nodes, urging other validators to scrutinize changes before committing. A noble stand, perhaps, but in the world of crypto, pragmatism often trumps principle. ⚖️

The Governance Tightrope

This debacle raises questions as thorny as a hedge of holly. How should decentralized networks make decisions? NEAR employed two voting systems: a community governance vote and a validator upgrade process. Bowen Wang, NEAR’s CTO, defended the approach, arguing that the community vote required a higher threshold to ensure consensus. Yet, the episode smacks of expediency over principle. 🌐

Louis Thomazeau of L1D Fund called the inflation cut “common sense,” suggesting that rigid adherence to rules can be as harmful as a poorly timed witticism. But others worry about the precedent: if core teams can sidestep governance, what becomes of decentralization? A question as unresolved as a Brontë novel. 📜

The Market’s Verdict

NEAR’s price dropped 8% to $2.10 following the announcement, though this coincided with a broader market downturn. The long-term impact remains as uncertain as the weather in April. Lower inflation could reduce selling pressure, but governance concerns may shake investor confidence like a hound shaking a rat. 📉

The Path Forward

NEAR now embarks on a new phase, its inflation trimmed like a topiary garden. The network has made strides in cross-chain transactions and AI applications, but the governance crisis looms large. Will this approach become a model or a cautionary tale? Only time will tell, though one suspects the crypto world will be watching with the same fascination as a society gossip at a ball. 🎩

The Governance Tightrope

NEAR’s inflation cut succeeded technically but sparked a governance crisis as dramatic as a Wilde play. While the network has addressed its economic woes, the question of who truly controls protocol changes remains as unanswered as a proposal from a unsuitable suitor. The crypto industry will watch with bated breath, wondering if NEAR’s approach will be emulated or reviled. 🌪️

2025-10-31 02:41