NEAR Protocol co-founder Illia Polosukhin confirmed on Monday that the network’s on-chain governance body, the House of Stake, has officially voted to eliminate the developer gas rebate through the passage of proposal HSP-027.
The decision marks a significant shift in the network’s economic model, moving away from a system that shared fees with smart-contract owners to one where 100% of network fees are permanently removed from circulation.
Illia Polosukhin confirms House of Stake vote on gas rebate
The final vote tally showed overwhelming support for the change, with 46 votes representing 4.66 million veNEAR in favor, compared to just two votes representing 1,819 veNEAR against.
The transition is slated for implementation with the release of nearcore v2.14, which developers expect to go live around August 2026. Under the current protocol architecture, NEAR allocates 30% of gas fees generated by smart-contract calls to the owner of that contract, while the remaining 70% is burned.
By dropping the rebate to 0%, the network will transition to a full-burn model, effectively increasing the deflationary pressure on the NEAR token. Governance participants described the move as a necessary step to align incentives and streamline an accounting system that had become increasingly cumbersome for builders and auditors alike.
The primary motivation behind scrapping the rebate centers on simplifying the NEAR Protocol for the long term. Illia Polosukhin, who originally designed the 30% rebate to encourage developers to create reusable components and libraries, acknowledged that the mechanism was no longer serving its intended purpose.
In a statement confirming the vote, Polosukhin noted that the change will keep the protocol “cleaner” and “simpler” as it matures into its next phase of growth. The original intent was to create a direct revenue stream for developers, but the reality of modern dApp development has shifted toward different monetization strategies.
Most projects currently operating on NEAR do not rely on these small gas kickbacks to sustain their operations. Instead, developers typically sponsor gas costs for their users to ensure a frictionless experience, recouping costs through subscriptions, spreads, or advertising.
Because the rebate was relatively small, it often failed to provide a meaningful budget for large-scale projects while adding a layer of technical debt to the core code. By removing this feature, the network eliminates a specialized carve-out that required constant maintenance and complicated the internal accounting of user deposits.
The governance body, known as the House of Stake, also highlighted that the rebate created “misaligned incentives.” In some cases, the rebate could be exploited or simply proved difficult to distinguish from ordinary fund deposits in smart contracts.
As the Ethereum network outlook continues to evolve with its own fee-burning mechanisms like EIP-1559, NEAR is following a similar path toward a more predictable and transparent economic structure. This transparency is vital for institutional participants who require clear auditing of where every fraction of a token goes during a transaction.
A trial run for NEAR decentralized governance authority
Beyond the immediate economic impact, this vote served as a critical stress test for the House of Stake. Polosukhin framed the passage of HSP-027 as “a great test” of the governance body’s authority over the core economic parameters of the blockchain.
It demonstrates that the community and validators now hold the reigns of the network’s financial policy, moving away from a founding-team-centric model. For investors and developers, this signal of maturity suggests that NEAR can adapt its monetary policy through democratic consensus rather than unilateral decree.
The lopsided nature of the vote—4.66 million veNEAR for versus less than 2,000 against—indicates a strong consensus among the largest stakeholders. These participants, who lock up their tokens to participate in governance, seem to prioritize the long-term health and simplicity of the network over the short-term benefit of a 30% fee rebate.
This shift in sentiment mirrors broader trends in the industry where investor sentiment is moving toward assets with clear deflationary characteristics and robust decentralization.
For builders currently active on the network, the NEAR DevHub has issued warnings to ensure that teams do not factor the gas bonus into their future financial planning.
While the loss of the rebate might pinch smaller, independent developers who were using the fees to offset server costs, the general consensus is that a cleaner protocol attracts more high-level investment.
Simplified accounting makes it easier for third-party tools and analytics platforms to track network activity without having to calculate complex rebate distributions for every transaction.
Impact on tokenomics and $NEAR long-term value
Market analysts are viewing this development as a net positive for the $NEAR token’s value capture. By moving from a 70% burn to a 100% burn of all transaction fees, the network effectively increases its burn rate by roughly 43% relative to current levels.
While NEAR still has an inflationary component through staking rewards, this burn acts as a vital offset. As transaction volume scales with the deployment of new sharding phases, the amount of $NEAR removed from the total supply could become a significant factor in the token’s price action.
This move comes at a time when competition among Layer 1 blockchains is intensifying. While networks like Solana and the XRP Ledger are seeing heightened speculative activity, NEAR is focusing on its technical foundations.
The “Nightshade” sharding technology remains the centerpiece of its scaling roadmap, and a simpler fee structure allows the core development team at Pagoda and the NEAR Foundation to focus on high-throughput performance rather than edge-case economic incentives.
Furthermore, the decision to remove the rebate helps solve an “accounting problem” cited by Polosukhin. In the past, it was often difficult to distinguish a developer rebate from a user’s initial deposit in a contract’s state. This ambiguity occasionally led to confusion during protocol upgrades or when calculating the exact circulating supply.
By streamlining the flow of gas directly to a burn address, NEAR ensures that its ledger remains one of the most accurate and easy-to-verify in the smart-contract space.
What developers need to do before the v2.14 release
With the change expected to take effect in August 2026, developers have a generous window to adjust their business models. Most modern dApps have already transitioned to “meta-transactions” or “relayers,” where the application pays the gas on behalf of the user.
Because these developers are already paying for the gas, the 30% rebate was essentially a small coupon on their overhead. Moving forward, these projects will need to find other ways to optimize their state usage to keep costs low, such as using NEAR’s “storage staking” more efficiently.
The NEAR governance account emphasized that this change is about more than just numbers; it is about building a sustainable ecosystem. If a project relied solely on a percentage of its own users’ transaction fees to survive, it was likely not a viable business in the long run.
By stripping away this “artificial” support, NEAR is encouraging developers to build products that deliver genuine value through their primary services rather than transaction fee arbitrage.
As the network approaches the release of nearcore v2.14, the focus will likely shift to other economic parameters. The success of HSP-027 has opened the door for further community-led proposals regarding staking rates, storage costs, and even potential changes to validator rewards.
The protocol that once began as an AI startup is now firmly established as a decentralized powerhouse, capable of evolving its own constitution to meet the demands of a changing digital economy.