NEAR's 9% Plunge A Wake-Up Call? Inflation's the Real Villain

So, NEAR took an 8.6% hit, huh? So everybody’s staring at the charts, whispering about this support level and that ascending channel. Let’s be honest, forgoing engagement with community members in favor of just talking about the technicals is putting a band-aid on an open wound. The disease this time? Inflation, the crypto-destroying silent value-eater.

User Growth Doesn't Equal Price Appreciation

NEAR VR has a rapidly growing user base, reportedly only behind Solana with 46 million monthly active users. That's fantastic, right? As with any platform, the narrative is constantly “the more users we get, the more valuable we are.” What if that algebra is completely wrong? What if, for NEAR, all of those sparkly new users mask a more insidious issue? It’s well worth exploring what’s really happening below the radar.

Think of it like this: imagine a pizza party. So you invite all your friends and their friends (user growth!), but you only have one pizza (fixed token supply). What happens? Everyone gets a smaller slice. NEAR’s 5% inflation rate is more like baking different pizza, but enough to exceed the actual demand at a clip of 5% or more. What you’re really doing is diluting the value of everyone’s existing slices—making all of them just a tad less happy.

See the difference? Bitcoin's scarcity drives value. Ethereum is actively working to become scarcer. NEAR? It’s pumping out way more tokens than the ecosystem can ever realistically soak up.

NEAR's Inflation: 5% annually
Bitcoin's Inflation: Halving every four years, currently well below 2% and heading towards zero
Ethereum (Post-Merge): Moving towards deflationary, with more ETH burned than created in certain periods

The purpose of NEAR’s inflation is presumably to incentivize staking and network participation. Makes sense on paper, right? Provide compensation to those who help secure and stabilize the network. Good intentions don’t always lead to good outcomes.

Unintended Consequences of Inflation

So what happens when you continually crank the levers to dump tons of new tokens into the market? You create sell pressure. Rewards to Stakers The Stakers earn rewards, but most Stakers will — and should — inevitably sell those rewards to realize profits. Relentless market sell pressure could drown out any enthusiasm based on user growth. That’s leading to the enormous price crashes we’re seeing at this moment.

It gets worse. That 5% inflation isn’t just an abstraction, it’s a powerful disincentive for long-term investment. Why are you keeping your NEAR tokens in the full knowledge that their value will be slowly but surely eaten up by inflation? It gets the NEAR ecosystem hooked on short-term speculation and drives away the kind of patient, value-driven investment that NEAR will need to thrive.

Look at the DWF Labs proposal. They're essentially saying, "Cut the inflation, and we'll buy more tokens." That speaks volumes. We believe it’s a welcome admission that the current inflation rate is an issue, a drag on NEAR’s potential. DWF Labs isn't stupid. They recognized the fundamental problem, and they’re wagering on the belief that correcting it will set free enormous value.

We’ve been fed this lie that user growth is like the holy grail of crypto. What is the point of having a huge user base if the token itself is continuously losing value? NEAR’s implosion provides a cautionary tale that tokenomics are important. In fact, they may be more important than adoption metrics.

Time for A Tokenomic Reality Check

It’s high time for NEAR to throw out the “growth at all costs” mindset and adopt a greener approach. Instead, it’s time to think about the long-term health of the token above the short-term profits. Now is the moment to take DWF Labs’ proposal seriously and cut that inflation rate by half.

Less inflation would hurt more in the first year. It might mean slightly lower staking rewards. Yet in the long run, it will construct a drastically extra desired and livable ecosystem. It will send clear and compelling signals to investors that NEAR is genuinely committed to building long-term, sustainable value rather than pursuing temporary hype.

That 9% drop is not merely a bump in the road, it is a canary in the coal mine. NEAR has a choice to make. It can double down on its existing approach, prioritize user growth at all costs and balloon token burn. Or, instead, it can adopt a more sustainable and value-based model. The choice is theirs — and note, inaction is a choice as well. In this instance, it is a potentially disastrous one.

Don't let inflation be the villain that sinks NEAR's potential. Demand better tokenomics. Your investment depends on it.