NEAR Protocol's on-chain governance body, the House of Stake, approved proposal HSP-027 on Monday, ending the network's developer gas rebate program. All gas fees generated on NEAR will now be burned, directly altering the protocol's tokenomics and developer cost structure. Co-founder Illia Polosukhin confirmed the vote outcome earlier this week.
The previous fee structure returned a portion of gas fees to smart contract deployers—a mechanism designed to subsidize operational costs for dApps. Under HSP-027, 100 percent of gas fees are routed to a burn address, removing them from NEAR's circulating supply.
The stated rationale is tighter deflationary pressure on the NEAR token. Burning all transaction fees creates a direct value accrual mechanism for token holders via increased scarcity, aligning NEAR with layer-1 networks that have adopted fee-burning models—most notably Ethereum, which introduced a base fee burn through EIP-1559 in Aug. 2021.
For developers, the elimination of rebates is a direct hit to cost structure. Base gas prices remain unchanged, but the economic offset previously available to smart contract owners is gone. dApp teams will need to recalibrate operational budgets, absorb costs or pass them to end users.
The change sharpens NEAR's competitive tension with layer-1s that still offer developer subsidies through rebates, grants or ecosystem funds. Networks maintaining those incentives may look more attractive to new projects, particularly smaller teams running tight budgets. The NEAR Foundation may need to deploy alternative support mechanisms to hold builder activity.
The burn rate's real-world impact will track directly with network usage. High-throughput periods will accelerate supply reduction; low-activity periods will slow it. On-chain analysts will watch daily transaction counts, active addresses and TVL to gauge whether the new model meaningfully tightens supply dynamics.
The House of Stake facilitated HSP-027 through a transparent on-chain vote, allowing token holders to directly set a core economic parameter. The proposal's passage reflects a collective decision to prioritize token value accrual over direct developer subsidies.
The long-term test for HSP-027 is whether sustained growth in users, transaction volume and TVL can drive a burn rate meaningful enough to offset any developer attrition the rebate elimination may cause.
