NEAR Protocol co-founder Illia Polosukhin has proposed a new treasury system called the NEAR Sovereign Fund. The plan would pool the protocol's treasury and revenue, invest it to earn yield,
NEAR Protocol co-founder Illia Polosukhin has proposed a new treasury system called the NEAR Sovereign Fund. The plan would pool the protocol's treasury and revenue, invest it to earn yield, and use that yield to pay for network security and public goods.
If the fund grows large enough to cover security costs on its own, NEAR could stop minting new tokens and move toward a fixed supply, similar to Bitcoin's model.
Polosukhin shared the proposal as NEAR approaches the sixth anniversary of its Mainnet launch. He frames the last five years as a "bootstrapping phase" and says the network is now ready for a more sustainable economic model.
The Sovereign Fund would combine NEAR's existing protocol treasury, which currently holds roughly 30 million $NEAR, with future protocol revenue. That revenue currently comes from several sources, including transaction fees, subscriptions, and per-inference payments tied to NEAR AI.
Unlike traditional sovereign wealth funds, which typically hold cash or government bonds, the NEAR fund would hold $NEAR itself and generate yield by putting the token to work across the ecosystem, for example through lending protocols.
A share of that yield would then fund public goods, including:
Community members had floated the idea of simply burning treasury tokens to reduce supply. Polosukhin rejected that approach, arguing that a one-time burn only offsets inflation briefly and does not build lasting value. He also noted that if inflation is eventually turned off, a fund with no productive assets would leave the ecosystem without ongoing funding.
He illustrated the tradeoff with a simple example: if 1% of NEAR's supply came from revenue, burning that 1% has a negligible effect given normal market volatility. Putting that same 1% to work earning yield, for instance around 5% through lending markets, keeps generating funding while also supporting demand for the token.
Every proof-of-stake network, including NEAR, currently relies on inflation to pay validators for securing the chain. Polosukhin points out that even Bitcoin still issues inflationary block rewards, though its rate keeps shrinking. The Sovereign Fund proposal aims to replace that reliance gradually.
As the fund's yield grows, NEAR could shift more validator rewards away from new token issuance and toward fund earnings instead. Reference points Polosukhin cites include Singapore's sovereign wealth fund, now 45 years old, and Norway's, now 36 years old, both of which have compounded returns over decades from initially cyclical revenue.
The proposal launched as a starting point for discussion, not a final decision. Polosukhin opened it with a two-week comment period involving validators, token holders through House of Stake, and the wider NEAR community.
As of this writing, no on-chain vote has taken place, and any emissions redirected to the fund would happen gradually through defined milestones rather than sudden cuts. Readers should check NEAR's governance forum for the latest status, since the comment window may have since closed.
Community reaction so far has leaned positive, with particular interest in the added transparency compared to how the NEAR Foundation managed treasury funds in the past.
As of early August 2026, $NEAR was trading in the $1.62 to $1.73 range across major exchanges, with a market capitalization near $2.1 to $2.3 billion. These figures shift by the minute, so check a live tracker like CoinGecko or CoinMarketCap for the current price. NEAR's total supply sits at roughly 1.3 billion tokens, with nearly all of it already unlocked and circulating.
For holders, three things are worth tracking: how quickly the Sovereign Fund scales to a point where yield covers security spending, what governance rules prevent mismanagement of the fund, and whether the milestone-based rollout holds up once real decisions and political pressure arrive.
What is the NEAR Sovereign Fund? It is a proposed treasury system that would pool NEAR's protocol treasury and revenue, invest it to generate $NEAR-denominated yield, and use part of that yield to pay for network security and public goods.
Could NEAR really reach a fixed token supply? Only if the Sovereign Fund's yield eventually covers the full cost of network security. That would let NEAR reduce and eventually stop issuing new tokens for validator rewards, similar to how Bitcoin's issuance schedule declines over time.
When will the proposal be decided? There is no set timeline. Polosukhin opened a two-week comment period for validators, token holders, and the community, and any changes would roll out gradually through governance-approved milestones rather than all at once.
The NEAR Sovereign Fund proposal combines the protocol's existing treasury and future revenue into a yield-generating pool that pays for security and public goods. It gives NEAR a governance-driven path to gradually reduce inflation and, if the fund scales as intended, move toward a fixed token supply. The proposal is currently open for community discussion, with no binding vote yet scheduled.
