Illia Polosukhin, co-founder of NEAR Protocol, has put forward a governance proposal to create what he’s calling the “NEAR Sovereign Fund,” a mechanism designed to consolidate the protocol’s treasury, generate yield, bankroll security costs, and fund public goods. The kicker: if the fund works as intended, it could pave the way for NEAR to transition to a fixed token supply.

What the fund actually does

The proposal, published on the NEAR Governance Forum on August 3, 2026, outlines a fund seeded with approximately 30 million NEAR tokens as its initial capital infusion. That pool would be put to work generating yield, with proceeds directed toward specific operational necessities.

Those necessities include the Validator Support Program, which compensates the node operators who keep the network running. Payments to Multi-Party Computation providers, which handle critical cryptographic infrastructure, are also in scope. The fund would additionally cover broader public goods, essentially the shared infrastructure and tooling that benefits the entire NEAR ecosystem but doesn’t have a natural business model attached to it.

The governance structure would run through what NEAR calls “House of Stake” mechanisms, tying decision-making to token holders with skin in the game.

Why this matters: the NEAR Foundation contrast

Previous treasury management at NEAR was handled largely by the NEAR Foundation, and the community’s reviews of that experience were, let’s say, not glowing. Critics pointed to a lack of transparency around how foundation funds were allocated and spent. Polosukhin appears to be addressing that history head-on by framing this proposal as a “conversation starter” rather than a fait accompli.

The proposal includes a two-week comment period before any binding decisions get made. No definitive timeline for implementation or on-chain voting has been set. Emissions into the fund would happen gradually through defined milestones rather than sudden cuts. The community response so far has been positive, with members particularly receptive to the emphasis on transparency and structured governance.

The fixed supply endgame

The most ambitious element of the proposal is its long-term vision: transitioning NEAR to a fixed token supply. Most proof-of-stake networks rely on perpetual inflation to pay validators. If the Sovereign Fund’s yield can fully cover security expenses, there’s no longer a need to mint new tokens for that purpose.

For current NEAR holders, the key variables to watch are straightforward: how quickly the fund reaches a scale where yield covers security costs, what governance guardrails prevent the fund from being mismanaged, and whether the gradual milestone-based approach to reducing emissions actually sticks when political pressures mount.