NEAR Protocol has presented a major governance proposal, created in partnership with Gauntlet and the NEAR Foundation. This announcement has led to a 10% increase in the value of NEAR token. The proposal seeks to deepen the decentralization of the NEAR ecosystem through a comprehensive plan that ensures better governance, accountability, and performance.

New Governance Framework for NEAR Protocol Ecosystem

NEAR Protocol has recently launched a new governance proposal which is dedicated to increasing the decentralization level of the NEAR ecosystem. The proposal entails that one uses a stake-weighted voting system instead of the traditional one person one vote. Thus, this system is planning to grant NEAR token holders with more control in direct correlation to the stake they hold in order to encourage passive and active holdings.

NEAR Protocol is on the verge of taking the next step in decentralization.

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

— NEAR Protocol (@NEARProtocol) July 16, 2024

Also, the proposal presents recommendations for changes in the governing nodes with an aim of enhancing effectiveness. This includes forming a Screening Committee to manage the selection of delegates and prescreening of grant proposals hence keeping up the evaluation of governance effectiveness.

The other major aspect is the Endorsed Delegate Mechanism which includes the description of the functions and the procedures of the delegates crucial for the operational governance.

Funding Structure and Incentive Mechanisms

In this regard, the proposal recommends a new funding model to support the new governance model. This entails new funding types and guardrails as well as incentives for delegates and veNEAR holders. The veNEAR tokens, which are a key component of the NEAR voting mechanism, enable the staking of NEAR tokens for three months to four years. The longer the stake, the higher the voting rights in order to encourage long term commitment and enhance the governance role.

The proposal also looks into the matter concerning the 0. 5% annual inflation rate and reverting 50% of it to fund governance proposals and encourage ecosystem stakers. This is the strategic allocation of resources in a bid to ensure that there are proper on-chain activities taking place.

At the same time, the proposed governance framework represents a major evolution in the NEAR ecosystem’s decentralization process. This is through increasing the delegate membership and the conducting of periodic reviews by the Screening Committee to enhance the review of strategies based on the performance and effectiveness continually.

This dynamic approach is designed to ensure that the governance framework continues to be effective and relevant to the objectives of the NEAR protocol in the long term.

NEAR Token Price Surge

After the introduction of the new governance proposal, the price of NEAR token also rose by 10%. This rise is due to the market response to the proposed changes that are expected to have positive effects on the further development of the ecosystem. At press time, NEAR was trading at $6.22, a 7.81% surge from the intraday low of $5.61.

During the rally, NEAR’s market capitalization and 24-hour trading volume soared 7.93% and 85% respectively to $6,851,091,519 and $535,805,328.

Backing this uptrend, the Moving Average Convergence Divergence (MACD) shifted in the positive region. With the developing higher histogram bars, buying pressure is increasing.

However, the RSI rating of 78 suggets that the price may be nearing a pullback. This abnticipation is because an overbought RSI is a signal of a colling bullish momentum.

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Kelvin is a distinguished writer specializing in crypto and finance, backed by a Bachelor’s in Actuarial Science. Recognized for incisive analysis and insightful content, he has an adept command of English and excels at thorough research and timely delivery.

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