NEAR’s 2.5% annual reward parameter caps the protocol-level rate rather than setting an individual holder’s return, while Nightshade allows validators to verify state changes without storing shard data locally.
The protocol sets the figure as its maximum annual reward rate. It directs 10% of the reward allocation to the treasury, leaving the rest available for validators. Transaction fees that qualify reduce net issuance, meaning the maximum rate alone does not establish how many new tokens enter circulation after fees. The parameter does not represent a payment automatically received by each holder.
Rewards reflect both the size of a stake and validator uptime. Holders may join validation by running a node themselves or by assigning their tokens to a validator. A holder’s return varies with the stake, the validator’s performance and the way rewards are spread across staked tokens.
Nightshade divides the network’s state among shards, with each shard responsible for a share of activity. A block can include a transaction chunk from each shard, allowing separate parts of the network to process work in parallel. Adding shards is expected to increase network capacity.
A Nightshade upgrade introduced stateless validation on mainnet in 2024. Validators rely on witnesses supplied by the network to check state changes without storing shard state on their machines. The block structure still accommodates transaction chunks from across the shards.
A separate 2025 upgrade reduced the stated ceiling for annual NEAR inflation to half its earlier level.
