NEAR weighs sovereign wealth fund to cut reliance on token inflation

NEAR co-founder Illia Polosukhin has encouraged stakeholders of the network to consider a protocol fund for investment. It would hold NEAR tokens, earn yield, and spend some of that yield on security and other public goods.

He posted the idea to the NEAR governance forum Monday with a timeline of two weeks for community members to share their input.

Polosukhin calls for the community’s input

“This is very much a proposal and not a mandate,” he wrote. “I believe our ecosystem belongs to all of us and is not truly resilient or decentralized if the founder is calling all the shots,” he continued.

He wants to hear from validators and token holders voting through House of Stake and the community before anything moves forward.

NEAR is getting ready to begin its sixth year of Mainnet. Polosukhin called the first five years a bootstrapping phase. Recent groundwork, he says, includes inflation falling by half in late 2025, a fee switch that directs revenue from NEAR Intents to token buybacks, and NEAR charging for AI inference.

According to the forum post, the proposed treasury would be funded by NEAR’s existing protocol treasury and the protocol revenue collected to date and in the future. The fund would hold it in NEAR and put the tokens to work. A portion of the revenue share would fund the Validator Support Program, MPC providers, and other similar services. The fund would launch with ~30 million NEAR, or about $53 million at current prices.

Participation by delegates in NEAR’s stake-weighted governance system, House of Stake, will be through mechanisms that are already set up. Over time, Polosukhin suggested, NEAR could redirect a growing share of emissions into the fund. That would reduce effective inflation, and validators and stakers would still be paid.

Norway and Singapore are the blueprint

Sovereign wealth funds and university endowments turn one-off or cyclical income into a permanent asset base that pays out yield year after year.

Polosukhin cited Norway and Singapore. Singapore’s fund is 45 years old, and Norway’s is 36, evidence that the structure can survive market cycles. Crypto revenue is just as cyclical as oil or land sales, he stated, so putting it into a productive fund is better than paying bills directly.

He drew a sharp distinction between this process and the burning of tokens, a mechanism NEAR’s community has discussed in the past. Burning offsets inflation for a moment, he said, but the effect washes out in a volatile asset, and once inflation switches off, there is nothing left. He likes simple math; the same tokens are lent out on yield, and the principal continues to generate funding.

Polosukhin turned down a proposal in early July to burn tokens held by the Foundation, saying that a one-time burn was “a blunt instrument” and instead pointing to the possibility of a Bitcoin-style hard cap on the supply of NEAR. The fund helps that. If the yield can eventually cover network security and public goods on its own, he wrote, NEAR “could move towards a fixed supply.”

The Near Foundation co-founder acknowledged that yield carries risk. The plan is to diversify and hedge it, and any inflation adjustment should still keep validator and staking incentives intact. NEAR was trading at $1.74 up 1.4% on the day but down 29.6% over the year, according to CoinGecko data.

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