NEAR Protocol's on-chain governance body, the House of Stake, passed proposal HSP-027 this week, eliminating the network's long-standing developer gas rebate program. All gas fees generated on NEAR will now be burned.
NEAR co-founder Illia Polosukhin confirmed the outcome Monday. The change rewrites the protocol's tokenomics, replacing direct developer incentives via fee rebates with a full deflationary burn on every transaction.
Under the previous model, a portion of gas fees paid by users interacting with smart contracts was rebated to dApp developers—subsidizing operational costs and lowering the economic friction of building on NEAR. With HSP-027 active, 100 percent of those fees are permanently removed from circulation. Previously, only the un-rebated portion burned; the rebated segment recirculated to developers.
The immediate impact falls on smart-contract developers, who now absorb the full cost of network usage without the rebate offset. High-throughput dApps or those with complex on-chain interactions will feel the added overhead most acutely.
For NEAR token holders, the change introduces a stronger deflationary force. The higher burn rate reduces total NEAR supply over time, assuming consistent network activity. The model now sits alongside—and in some respects beyond—comparable mechanisms on other Layer 1s: Ethereum's EIP-1559 burns a base fee while routing a priority fee to validators; Solana destroys 50 percent of transaction fees. NEAR's new structure burns all fees, making it one of the most direct deflationary mechanisms among major L1s.
The vote itself reflects how the House of Stake can set fundamental economic policy. Developer retention is the open question. Removing rebates raises the cost of building on NEAR, which could disadvantage smaller teams operating on tight budgets. Grants and ecosystem funds may need to fill that gap.
A more deflationary token could attract capital and lift the value of assets held by developers and users—partially offsetting the rebate loss. The net effect on developer activity will show up in contract deployments, unique active wallets and TVL across NEAR dApps.
