In this article, you will learn what NEAR is, how it works, and what prospects it offers for investors, developers, and ordinary users.
What is NEAR Protocol
NEAR Protocol is a high-performance blockchain for smart contracts, designed for Web3 and even AI-oriented applications. Thanks to its unique Nightshade architecture and PoS consensus, the network processes hundreds of thousands of transactions per second with minimal fees (~$0.002), making it accessible to a wide audience.
Founders and history
The project was founded by Eric Trautmann, Alexander Skidanov, and Ilya Polosukhin, former Microsoft and Google specialists. The NEAR Foundation began operations in 2017, and the mainnet was launched in April 2021. Since then, an $800 million investment fund has been created to develop projects in the ecosystem.
Mission and vision
NEAR’s mission is to democratize access to Web3 and AI applications through an inclusive and scalable blockchain infrastructure. In 2023–2024, the team focused on AI integration: NEAR positions itself as the first AI-native blockchain, where AI agents can act on behalf of users, performing transactions, data management, and coordination of actions.
Technological features
Sharding (Nightshade)
The Nightshade architecture distributes shards, each of which executes transactions in parallel.
Proof-of-Stake and Security
NEAR operates on a PoS model: validators stake tokens to participate in consensus and receive rewards. Security is guaranteed by a decentralized network of hundreds of nodes that provide reliable protection for the network.
Performance and Scalability
NEAR processes up to hundreds of thousands of transactions per second with finalization in less than ~1.2 seconds. Fees remain extremely low, making it affordable for microtransactions and DApps of any scale.
Smart contract support
WASM is supported for different programming languages (Rust, AssemblyScript, etc.). A simple SDK and integration with Ethereum via the Aurora bridge are provided, which expands compatibility and development flexibility.
NEAR tokenomics
The NEAR token is the native cryptocurrency of the NEAR blockchain, which performs several functions at once: payment of transaction fees, staking, network management, and incentivizing developer activity.
As of 2025, the total maximum supply of NEAR is 1 billion tokens, of which approximately 910 million are already in circulation (according to CoinGecko). The initial supply was distributed among the team, investors, a reserve fund, and ecosystem funds.
Annual inflation is about 5%, part of which is offset by the mechanism of burning a portion of transaction fees, creating deflationary pressure as network activity grows.
How staking works
NEAR staking is built on the Proof-of-Stake mechanism. Network participants can:
- become delegators by transferring their NEAR to validators;
- or run validator nodes themselves (subject to a minimum stake of currently over 65,000 NEAR).
Delegators receive an annual return of 7–10%, depending on the terms of the specific validator. Accruals occur daily, and delegation is done through the official NEAR Wallet or third-party services.
NEAR Ecosystem
NEAR Protocol is actively developing infrastructure for decentralized NEAR applications, covering various areas: from wallets to DAOs and metaverses. As of 2025, there are over 1,200 active DApps registered in the ecosystem, including:
- Ref Finance — the flagship DeFi combine for exchanging, farming, and launching tokens on NEAR;
- Paras — an NFT marketplace focused on digital art;
- SWEAT Economy — a Web3 application that rewards users for physical activity with tokens;
- Sender Wallet — a popular non-custodial wallet with NFT and staking support.
Thanks to simple onboarding (registration via email or social networks), Web3 projects on NEAR are aimed at a mass audience — not only crypto enthusiasts, but also beginners.
Aurora, Octopus Network, and other solutions
One of NEAR’s main innovations is Aurora, an EVM-compatible blockchain that allows Ethereum developers to launch their projects on NEAR without changing their code. Aurora provides ultra-fast transactions with minimal fees and compatibility with MetaMask.
Another key element is Octopus Network, which allows independent blockchains (appchains) to run on top of NEAR. This is a large-scale solution for niche projects that need their own token and flexible architecture.
Other infrastructure solutions include:
- Calimero — private shard networks for businesses;
- Pagoda — a platform for developers with SDK, API, and no-code tools;
- Near Social — a decentralized social platform of the new generation.
DAO and grants for developers
NEAR is one of the leaders in the implementation of DAOs (decentralized autonomous organizations). Through the NEAR Digital Collective (NDC), users can influence the budget, strategies, and funding of projects. In 2024, the community approved over $18 million in grants for developers and ecosystem initiatives.
Grants are provided through:
- NEAR Foundation — the main fund for strategic financing;
- Proximity Labs — support for DeFi developers;
- Developer DAO — a self-governing organization that distributes microgrants in the early stages.
