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- NEAR Protocol’s new governance proposal led to a 10% rise in token value, enhancing ecosystem decentralization and governance.
- The proposal introduces a stake-weighted voting system, giving more control to NEAR token holders based on their stake.
- The governance changes include a new funding model and the creation of a Screening Committee to manage delegate selection and prescreen grant proposals.
NEAR Protocol has unveiled a key governance concept created in partnership with Gauntlet and the NEAR Foundation. The news resulted in a 10% boost in the value of the NEAR token, as the proposal seeks to improve the decentralization of the NEAR ecosystem through a comprehensive strategy centered on greater governance, accountability, and performance.
NEAR Protocol is on the verge of taking the next step in decentralization.
— NEAR Protocol (@NEARProtocol) July 16, 2024
Since day one, a portion of the growth of the NEAR token supply has been dedicated to the Community Treasury.
Now, @gauntlet_xyz, in collaboration with the @nearfoundation, propose a novel on-chain… https://t.co/rUiyNLLp8j
Stake-Weighted Voting System
The proposal recommends a shift to a stake-weighted voting system, replacing the traditional one-person-one-vote approach. This system grants NEAR token holders more control based on their stake, encouraging both passive and active holdings.
Additionally, it suggests changes in the governing nodes to improve effectiveness. A Screening Committee will be established to manage delegate selection and prescreen grant proposals, ensuring continuous evaluation of governance effectiveness.
Endorsed Delegate Mechanism
A significant aspect of the proposal is the Endorsed Delegate Mechanism. It outlines the functions and procedures for delegates crucial for operational governance. The proposal also introduces a new funding model to support this governance structure, which includes new funding types, guardrails, and incentives for delegates and veNEAR holders.
The veNEAR tokens, a key part of the NEAR voting mechanism, allow staking of NEAR tokens for three months to four years. Longer stakes grant higher voting rights, promoting long-term commitment and enhancing governance roles.
Resource Allocation and Market Response
The proposal addresses the 0.5% annual inflation rate, suggesting that 50% of it be allocated to fund governance proposals and encourage ecosystem stakers to ensure proper on-chain activities.
Furthermore, the proposed governance framework marks a significant evolution in the NEAR ecosystem’s decentralization process. By increasing delegate membership and conducting periodic reviews, the Screening Committee will continually assess strategies based on performance and effectiveness.
Following the announcement, the NEAR token price rose by 10%, reflecting the market’s positive response to the proposed changes. At press time, NEAR was trading at $6.22, a 7.81% increase from the intraday low of $5.61.
During this rally, NEAR’s market capitalization and 24-hour trading volume surged by 7.93% and 85%, respectively, reaching $6,851,091,519 and $535,805,328. The Moving Average Convergence Divergence (MACD) indicator shifted to a positive region, showing increasing buying pressure. However, with an RSI rating of 78, a pullback is anticipated, indicating a potential cooling of the bullish momentum.
The new governance proposal by NEAR Protocol marks a pivotal step towards deeper decentralization and improved governance. By introducing a stake-weighted voting system, an Endorsed Delegate Mechanism, and strategic resource allocation, NEAR aims to strengthen its ecosystem. The market’s positive reaction underscores the potential impact of these changes on the future development of the NEAR ecosystem.