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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.