{"id":37768,"date":"2022-09-12T19:22:00","date_gmt":"2022-09-12T16:22:00","guid":{"rendered":"https:\/\/forklog.com\/en\/?p=37768"},"modified":"2025-08-29T21:15:10","modified_gmt":"2025-08-29T18:15:10","slug":"what-is-the-near-protocol-blockchain-and-cryptocurrency","status":"publish","type":"post","link":"https:\/\/forklog.com\/en\/what-is-the-near-protocol-blockchain-and-cryptocurrency\/","title":{"rendered":"What is the NEAR Protocol blockchain and cryptocurrency?"},"content":{"rendered":"<div class=\"wp-block-text-wrappers-cards single_card\">\n<h2 class=\"card_label\">Key points<\/h2>\n<ul class=\"wp-block-list\">\n<li>NEAR Protocol is an open-source, high-throughput smart-contract platform designed for building decentralised applications.<\/li>\n<li>A defining feature of the NEAR network is sharding\u2014the ability to split the blockchain into discrete segments. The corresponding upgrade was rolled out in autumn 2021.<\/li>\n<li>The project\u2019s native cryptocurrency trades under the ticker NEAR. Its primary functions are network transactions and staking. NEAR holders can delegate their coins to validators.<\/li>\n<li>Hundreds of protocols and decentralised applications run in the NEAR ecosystem. The largest include Aurora, Ref Finance and Burrow.<\/li>\n<\/ul>\n<\/div>\n<div class=\"wp-block-text-wrappers-cards single_card\">\n<h2 class=\"card_label\">Who created NEAR Protocol<\/h2>\n<p>NEAR Protocol was created by programmers Alexander Skidanov and Illia Polosukhin. Work on the project began in late 2018. Developers from leading tech companies, including Facebook, Google and Niantic, later joined the NEAR team. Two team members twice won the world programming championship.<\/p>\n<p>During NEAR\u2019s ICO in August 2020 on the <a href=\"https:\/\/coinlist.co\/near\" target=\"_blank\" rel=\"noreferrer noopener\">CoinList<\/a> platform, 120m NEAR (12% of the initial 1bn-token supply) were sold at $0.30.<\/p>\n<p>The rest of the initial supply was earmarked as follows:<\/p>\n<ul class=\"wp-block-list\">\n<li>17% for grants and community programmes;<\/li>\n<li>14% to the NEAR team;<\/li>\n<li>17.6% were sold across seven private funding rounds for $35m;<\/li>\n<li>11.7% to fund the deployment of ecosystem-development initiatives;<\/li>\n<li>10% for the <a href=\"https:\/\/near.foundation\/\" target=\"_blank\" rel=\"noreferrer noopener\">NEAR Foundation<\/a>, which delegates its share to validators on the NEAR network.<\/li>\n<\/ul>\n<p>Tokens in all of the above categories were locked for periods ranging from three months to five years.<\/p>\n<p>The NEAR Protocol mainnet <a href=\"https:\/\/forklog.com\/en\/news\/near-protocol-mainnet-launch\">launched<\/a> on 13 October 2020.<\/p>\n<\/div>\n<div class=\"wp-block-text-wrappers-cards single_card\">\n<h2 class=\"card_label\">The evolution of the NEAR ecosystem<\/h2>\n<p>In spring 2021 developers launched one of NEAR\u2019s most important components\u2014the cross-chain <a href=\"https:\/\/rainbowbridge.app\/transfer\" target=\"_blank\" rel=\"noreferrer noopener\">Rainbow Bridge<\/a>, which provides interoperability with Ethereum and allows transfers of cryptoassets <a href=\"https:\/\/forklog.com\/en\/news\/what-are-erc-20-tokens\">of the ERC-20 standard<\/a> to NEAR Protocol and back.<\/p>\n<figure class=\"wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio\">\n<div class=\"wp-block-embed__wrapper\">\n<iframe loading=\"lazy\" title=\"Near: \u043a\u043e\u043c\u0443, \u0437\u0430\u0447\u0435\u043c \u0438 \u043f\u043e\u0447\u0435\u043c\u0443 \u043d\u0443\u0436\u0435\u043d \u044d\u0442\u043e\u0442 \u0431\u043b\u043e\u043a\u0447\u0435\u0439\u043d? | \u0410\u043b\u0435\u043a\u0441 \u0428\u0435\u0432\u0447\u0435\u043d\u043a\u043e, \u0412\u0430\u0434\u0438\u043c \u0418\u043b\u044c\u0438\u043d\" width=\"500\" height=\"281\" src=\"https:\/\/www.youtube.com\/embed\/ZpxZZlG3Iac?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe>\n<\/div>\n<\/figure>\n<p>Soon after, a layer-two solution called Aurora was unveiled, enabling <a href=\"https:\/\/forklog.com\/en\/news\/what-is-the-ethereum-virtual-machine-evm\">Ethereum Virtual Machine (EVM)<\/a> smart contracts to run on NEAR Protocol.<\/p>\n<p>Since 2021 the <a href=\"https:\/\/nearcon.org\/\" target=\"_blank\" rel=\"noreferrer noopener\">NEARCON<\/a> conference, dedicated to the ecosystem, has taken place each autumn in Portugal. In October 2021 it announced an $800m fund to finance developers and projects on the NEAR Protocol blockchain.<\/p>\n<p>In spring 2022 the NEAR team raised $350m from several venture funds, including Tiger Global, FTX Ventures, Dragonfly Capital and others. Soon after, ConsenSys announced a partnership between NEAR and infrastructure provider Infura.<\/p>\n<p>In summer 2022 BitGo\u2014one of the largest custodial-service providers for institutional investors\u2014became a NEAR partner.<\/p>\n<p>In mid-September 2022 the NEAR Foundation announced the launch of a <a href=\"https:\/\/forklog.com\/en\/news\/what-is-web3\">$100m fund<\/a> to develop Web3.<\/p>\n<\/div>\n<div class=\"wp-block-text-wrappers-cards single_card\">\n<h2 class=\"card_label\">How the NEAR protocol works<\/h2>\n<p>NEAR runs on a Proof-of-Stake consensus algorithm and uses <a href=\"https:\/\/forklog.com\/en\/news\/what-is-sharding\">sharding technology<\/a>\u2014splitting the blockchain into smaller segments (shards) that can process in parallel\u2014to optimise performance. Unlike other cryptocurrencies such as Polkadot, all shards in NEAR are treated as parts of a single blockchain.<\/p>\n<p>Integrity is ensured by the <a href=\"https:\/\/near.org\/downloads\/Nightshade.pdf\" target=\"_blank\" rel=\"noreferrer noopener\">Nightshade<\/a> mechanism, under which only a snapshot of each shard\u2019s current state is added to a block. Each shard maintains its own set of <a href=\"https:\/\/forklog.com\/en\/news\/what-is-a-node\">validator nodes<\/a>, which submit their shard state whenever a block is produced. The Nightshade upgrade was activated on NEAR Protocol in November 2021.<\/p>\n<p>Think of this mechanism as a road junction. The intersection is the NEAR blockchain; each road is a shard. Shards can work in parallel because transactions executed on them do not collide. This model significantly boosts system throughput.<\/p>\n<p>Another key component of NEAR is <a href=\"https:\/\/near.org\/blog\/doomslug-comparison\/\" target=\"_blank\" rel=\"noreferrer noopener\">Doomslug<\/a>, which lets validator nodes take turns creating blocks during each 12-hour epoch. A new block is created roughly every second.<\/p>\n<p>Block rewards come from the issuance of new NEAR coins. Validators and delegated-staking pools receive 90% of each reward; the NEAR treasury gets 10%.<\/p>\n<\/div>\n<div class=\"wp-block-text-wrappers-cards single_card\">\n<h2 class=\"card_label\">The NEAR cryptocurrency and the USN stablecoin<\/h2>\n<p>NEAR is the native cryptocurrency of the NEAR Protocol blockchain. It is used for all network transactions, as well as for staking by validator nodes and delegating participants. Although rewards for validators and delegators are paid from the issuance of new coins, a portion is burned to pay network fees.<\/p>\n<p>NEAR is required to pay network fees. Of each fee, 30% is automatically directed to the developer of the smart contract used, with the remaining 70% going to validators. NEAR also supports \u201cfree\u201d transfers: when this option is enabled, the contract operator pays for the transaction.<\/p>\n<p>The maximum supply of NEAR is 1bn coins. According to <a href=\"https:\/\/coinmarketcap.com\/currencies\/near-protocol\/\" target=\"_blank\" rel=\"noreferrer noopener\">CoinMarketCap<\/a>, by early September 2022 more than 781m NEAR were already in circulation. By total market capitalisation NEAR is among the top 30 cryptocurrencies.<\/p>\n<p>In late April 2022 the USN stablecoin was launched on NEAR. Initially its price was supported by arbitrage operations and a reserve fund of NEAR and <a href=\"https:\/\/forklog.com\/en\/news\/what-is-tether-usdt\">USDT<\/a>. The USN launch coincided with adverse market conditions, notably the collapse of the Terra (LUNA) project. <\/p>\n<p>In summer 2022 Decentral Bank, the DAO responsible for managing the project, <a href=\"https:\/\/medium.com\/nearprotocol\/announcing-usn-v2-0-towards-true-stability-f4dbc6897d1f\" target=\"_blank\" rel=\"noreferrer noopener\">presented<\/a> USN version 2.0. Under the new system, the stablecoin\u2019s price is fully backed by USDT reserves. On the <a href=\"https:\/\/swap.decentral-bank.finance\/\" target=\"_blank\" rel=\"noreferrer noopener\">Decentral Bank website<\/a> users can buy or sell any amount of USN for USDT. The swap fee is 0.01%.<\/p>\n<\/div>\n<div class=\"wp-block-text-wrappers-cards single_card\">\n<h2 class=\"card_label\">Staking the NEAR cryptocurrency<\/h2>\n<p>To run a validator node on NEAR, NEAR coins must be sent to the <a href=\"https:\/\/forklog.com\/en\/news\/what-is-staking-and-how-to-make-money-from-it\">staking<\/a> smart contract. You will also need hardware that meets the protocol\u2019s <a href=\"https:\/\/near-nodes.io\/validator\/hardware\" target=\"_blank\" rel=\"noreferrer noopener\">requirements<\/a>.<\/p>\n<p>The precise stake size depends on how many coins other validators have in a given <a href=\"https:\/\/forklog.com\/en\/news\/what-is-sharding\">shard<\/a>. This also determines the share of block rewards, which are paid every epoch (12 hours).<\/p>\n<p>Each shard in NEAR contains 100 seats. To perform the validator function, you must hold at least one seat. The cost of each seat is determined by the total NEAR tokens locked in the shard\u2019s staking contract. Validators that break the rules risk losing part of their stake.<\/p>\n<p>This model is intended to incentivise validating nodes to support new or smaller shards with lower entry thresholds. If a user lacks sufficient funds to buy enough NEAR for a seat, they may try to persuade delegators to entrust funds via staking pools. By delegating tokens, users receive a share of validators\u2019 block rewards.<\/p>\n<p>According to <a href=\"https:\/\/www.stakingrewards.com\/earn\/near-protocol\/\" target=\"_blank\" rel=\"noreferrer noopener\">Staking Rewards<\/a>, in September 2022 the yield on NEAR staking was 5\u20136% per year.<\/p>\n<\/div>\n<div class=\"wp-block-text-wrappers-cards single_card\">\n<h2 class=\"card_label\">Who governs NEAR Protocol<\/h2>\n<p>The project\u2019s lead developer and development institute is the <a href=\"https:\/\/near.foundation\/\" target=\"_blank\" rel=\"noreferrer noopener\">NEAR Foundation<\/a>, a Swiss non-profit organisation. Its leadership includes prominent industry figures, including NEAR co-founder Illia Polosukhin.<\/p>\n<p>The NEAR Foundation also manages the project\u2019s treasury. The NEAR Protocol community can put forward initiatives, which may be financed from the treasury. Community members also join various groups dedicated to specific areas of development. Proposals are published and discussed <a href=\"https:\/\/gov.near.org\/\" target=\"_blank\" rel=\"noreferrer noopener\">on NEAR\u2019s official forum<\/a>.<\/p>\n<\/div>\n<div class=\"wp-block-text-wrappers-cards single_card\">\n<h2 class=\"card_label\">Projects on the NEAR Protocol blockchain<\/h2>\n<p>According to <a href=\"https:\/\/awesomenear.com\/projects\" target=\"_blank\" rel=\"noreferrer noopener\">AwesomeNear<\/a>, there are roughly 800 crypto projects across various niches in the NEAR ecosystem.<\/p>\n<h3 class=\"wp-block-heading\">Aurora<\/h3>\n<p>A layer-two protocol using the NEAR blockchain and the Ethereum Virtual Machine. Aurora is designed to ease the migration of Ethereum decentralised applications into the NEAR ecosystem. The native token is AURORA. Governance is handled by a DAO called <a href=\"https:\/\/aurora.dev\/dao\" target=\"_blank\" rel=\"noreferrer noopener\">AuroraDAO<\/a>.<\/p>\n<p>The protocol has already integrated several large decentralised applications, such as 1inch and Curve. Aurora\u2019s total value locked (TVL) was about $175m in September 2022, according to <a href=\"https:\/\/defillama.com\/chain\/Aurora\" target=\"_blank\" rel=\"noreferrer noopener\">DeFi Llama<\/a>, with a significant share locked in the DeFi protocols Bastion (BSTN) and Trisolaris (TRI). Around 200 applications run on Aurora. In May 2022 the Aurora Plus staking platform went live. <\/p>\n<h3 class=\"wp-block-heading\">Ref Finance<\/h3>\n<p>The largest decentralised exchange on the NEAR blockchain. It uses an automated market-making mechanism. Ref Finance features liquidity pools as well as <a href=\"https:\/\/app.ref.finance\/sauce\" target=\"_blank\" rel=\"noreferrer noopener\">stable pools (Sauce)<\/a> for stable cryptoassets. The protocol offers boosted rewards for staking the native token REF. The project\u2019s TVL as of September 2022 was about $234m.<\/p>\n<h3 class=\"wp-block-heading\">Burrow<\/h3>\n<p><a href=\"https:\/\/app.burrow.cash\/#\/deposit\" target=\"_blank\" rel=\"noreferrer noopener\">Burrow Cash<\/a> is a decentralised lending platform where users can issue synthetic assets against staked NEAR and other collateral (for example LINEAR and USN). In return for activity the protocol awards BRRR, its native token. According to Burrow\u2019s official website, total deposits are roughly $75m and loans $12.9m. <\/p>\n<h3 class=\"wp-block-heading\">Other projects<\/h3>\n<p>In 2021\u20132022 NEAR partnered with:<\/p>\n<ul class=\"wp-block-list\">\n<li><span style=\"color: initial;\">the Brave browser;<\/span><\/li>\n<li>Calimero, a provider of infrastructure for private shards;<\/li>\n<li>the multichain network Octopus.<\/li>\n<li>Pagoda, a platform for Web3 start-ups, and others.<\/li>\n<li>In September 2022 Tether issued the USDT stablecoin on NEAR. <\/li>\n<\/ul>\n<p>DAOs are a major use-case for decentralised applications based on NEAR Protocol. Creating decentralised organisations is made much easier by the <a href=\"https:\/\/astrodao.com\/\" target=\"_blank\" rel=\"noreferrer noopener\">AstroDAO<\/a> platform, which does not require programming skills.<\/p>\n<p>Several GameFi projects run on NEAR, such as Armored Kingdom, Niche, Endless and SWEAT. The ecosystem also hosts NFT start-ups: Seatlab, Mintbase, Stack Sports and others.<\/p>\n<\/div>\n<div class=\"wp-block-text-wrappers-cards single_card\">\n<h2 class=\"card_label\">Further reading<\/h2>\n<p><a href=\"https:\/\/forklog.com\/en\/news\/nft-staking-what-it-is-and-how-it-works\">What is NFT staking and how does it work?<\/a><\/p>\n<p><a href=\"https:\/\/forklog.com\/en\/news\/what-is-the-graph-grt\">What is The Graph (GRT) cryptocurrency?<\/a><\/p>\n<p><a href=\"https:\/\/forklog.com\/en\/news\/what-is-gamefi\">What is GameFi?<\/a><\/p>\n<p><a href=\"https:\/\/forklog.com\/en\/news\/what-is-a-merkle-tree\">What is a Merkle tree?<\/a><\/p>\n<p><a href=\"https:\/\/forklog.com\/en\/news\/what-is-tron-trx\">What is the TRON (TRX) cryptocurrency?<\/a><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>What sets the NEAR Protocol blockchain apart? How is the project developing? Which apps run in its ecosystem? We explain, in cards.<\/p>\n","protected":false},"author":1,"featured_media":37769,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"select":"1","news_style_id":"1","cryptorium_level":"1","_short_excerpt_text":"","creation_source":"","_metatest_mainpost_news_update":false,"footnotes":""},"categories":[2113],"tags":[2117,1216],"class_list":["post-37768","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-cryptorium","tag-101-altcoins","tag-near-cryptocurrency"],"aioseo_notices":[],"amp_enabled":true,"views":"56","promo_type":"1","layout_type":"1","short_excerpt":"","is_update":"","_links":{"self":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/37768","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/comments?post=37768"}],"version-history":[{"count":1,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/37768\/revisions"}],"predecessor-version":[{"id":37770,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/37768\/revisions\/37770"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/media\/37769"}],"wp:attachment":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/media?parent=37768"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/categories?post=37768"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/tags?post=37768"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}