NEAR Protocol's on-chain governance body, the House of Stake, approved proposal HSP-027 this week, eliminating the protocol's long-standing developer gas rebate system.
Under the new structure, all network gas fees will be permanently burned. The previous model returned a portion of gas fees to smart contract owners as a subsidy for development and operational costs.
NEAR co-founder Illia Polosukhin confirmed the outcome Monday. The change increases deflationary pressure on the NEAR token supply.
The original rebate mechanism aimed to incentivize dApp deployment and lower the operational cost for applications running on NEAR. With HSP-027, smart contract owners no longer receive a share of the transaction fees their contracts generate—developers now bear the full gas cost associated with user interactions on their applications.
The move directly affects the financial models of dApps built on NEAR, requiring them to account for higher operational expenses. Some projects may need to adjust their fee structures or seek alternative funding for gas costs.
For NEAR token holders, the complete fee burn tightens token supply. A higher burn rate reduces total NEAR supply over time, assuming consistent network usage.
This aligns NEAR's tokenomics with other Layer 1s that implement full or partial fee burning. The protocol now relies on ecosystem grants and future network upgrades to support its developer community rather than on-chain rebates.
