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This is a segment from the Lightspeed newsletter. To read full editions, subscribe<\/a>.<\/em><\/em><\/p>\n The NEAR L1 blockchain is running into something of a governance debacle.<\/p>\n Since June, NEAR\u2019s community has debated<\/a> a proposal to halve protocol emissions from 5% to 2.5%.<\/p>\n The original proposal argues that fee burns have fallen well short of expectations, leaving \u201chigh inflation without high usage,\u201d which is unsustainable.<\/p>\n The situation for NEAR is stark. NEAR is issuing roughly $140 million of tokens annually to secure a chain with $157 million in TVL and about $3.2 million in year-to-date fees.<\/p>\n For context, Solana\u2019s estimated annual issuance is roughly $5.5 billion, but it supports a far larger, more active DeFi ecosystem with around $11 billion in TVL. From a purely economic lens, NEAR is definitely \u201coverpaying\u201d for security.<\/p>\n That discussion finally culminated in a vote that concluded earlier this week. But though the vote won a simple majority, it failed to clear the 66.67% approval threshold, leaving it technically unsuccessful under NEAR\u2019s governance rules.<\/p>\n <\/span><\/span>Source: Linearprotocol<\/a><\/em><\/p>\n That\u2019s where the controversy begins. Validator operator Chorus One is criticizing indications that NEAR\u2019s core contributors may still ship a nearcore release containing the change, relying on a subsequent onchain upgrade mechanism to activate it.<\/p>\n Louis Thomazeau of L1D fund is pushing back<\/a> against Chorus One, countering that cutting emissions is \u201ccommon sense\u201d economics and should take precedence over blind adherence to decentralization ideals. In other words: Sure, there are rules, but a startup\u2019s main job is not to die.<\/p>\n It\u2019s hard to say if there\u2019s a clear right or wrong here; it fundamentally comes down to your philosophical values.<\/p>\n Breaking the rules delivers short-term efficiency, but it risks a dangerous \u201cFed put\u201d precedent. Following the rules of governance, I guess, safeguards governance integrity, but that\u2019s costly for the network and NEAR in the near term.<\/p>\n Crypto seems to run into the same kinds of problems all the time.<\/p>\n