Summary Illia Polosukhin proposed a sovereign fund using treasury assets and protocol revenue to support ecosystem services sustainably while reducing inflation. Governance could expand the t
NEAR Protocol co-founder Illia Polosukhin has proposed creating a protocol sovereign fund to strengthen the network’s long-term tokenomics. According to Polosukhin, the proposal would use treasury assets and protocol revenue to generate sustainable funding for ecosystem services while gradually reducing inflation.
The proposal introduces a treasury-backed model that invests NEAR tokens instead of relying only on token emissions. Polosukhin explained that yield generated by the fund would finance public goods across the ecosystem. As a result, the network could establish a more durable source of funding for critical operations.
According to the proposal, the sovereign fund would combine the current protocol treasury with future treasury allocations and protocol revenue. The fund would hold NEAR tokens and generate yield from those holdings. Moreover, delegates within the House of Stake would oversee participation through the protocol’s existing governance framework.
Polosukhin argued that directing ecosystem revenue toward acquiring NEAR and generating yield creates stronger long-term incentives. However, he noted that burning tokens only provides temporary inflation relief and does not establish a lasting financial foundation for the network.
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The proposal estimates the protocol treasury would begin with approximately 30 million NEAR tokens. At current market prices, those holdings are worth around $53 million. Additionally, governance could direct future protocol revenue and emissions into the sovereign fund over time.
According to Polosukhin, this structure could gradually reduce effective inflation while strengthening the protocol treasury. He also outlined a long-term vision where validator rewards would eventually come from investment returns instead of newly issued tokens. Consequently, NEAR could transition toward a fixed token supply if the model achieves its intended objectives.
Polosukhin added that the proposed framework would create a more sustainable financial model for the ecosystem. Moreover, it would provide consistent funding for public goods while reducing dependence on continuous token issuance.
The proposal takes inspiration from sovereign wealth funds in countries including Norway and Singapore. It also references university endowments that transform recurring revenue into income-generating assets. Polosukhin suggested a similar approach could strengthen NEAR’s financial resilience across different market conditions.
Besides supporting the Validator Support Program, the sovereign fund would also finance MPC providers and other essential ecosystem services. Existing governance mechanisms within the House of Stake would oversee participation and determine how treasury resources are managed.
Polosukhin emphasized that the document is an initial proposal rather than a final decision. According to him, the community will spend the next two weeks discussing the plan while stakeholders provide feedback before any governance vote.
NEAR traded around $1.76 following the proposal, reflecting a 3.5% gain over the previous 24 hours. However, the token remained approximately 29% lower than its level a year ago despite the renewed interest surrounding its long-term economic framework.
The proposal introduces a treasury strategy that prioritizes long-term funding instead of relying primarily on inflation. If approved through governance, the sovereign fund could reshape NEAR’s tokenomics by supporting ecosystem services, strengthening treasury reserves, and creating a more sustainable economic model.
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