NEAR Protocol (NEAR) NEAR

NEAR Protocol (NEAR) is a proof-of-stake layer 1 blockchain launched in 2020, designed to scale through sharding and to be easy to use, with readable account names and low fees. Its native token, NEAR, pays for transactions and storage and is staked to secure the network. Today the project presents itself as infrastructure for AI agents and cross-chain applications. Here is how NEAR works, its history, its uses and its risks.

What is NEAR Protocol?

NEAR was founded by Illia Polosukhin, a former Google Research engineer and co-author of the 2017 paper “Attention Is All You Need” that introduced the Transformer architecture and Alexander Skidanov. The project started as NEAR.ai, a startup working on program synthesis, before turning to blockchain in 2018. It raised $12.1 million in July 2019 and $21.6 million in May 2020 in a round led by Andreessen Horowitz. The NEAR Foundation supports the ecosystem.

How NEAR works

Proof of stake and sharding

NEAR uses proof of stake: validators lock NEAR to produce blocks and chunks, and holders can delegate to them to earn rewards through staking. To scale, NEAR splits the network into shards that process transactions in parallel, following its “Nightshade” design. The official site claims blocks of about 600 milliseconds and finality in about 1.2 seconds, and recent upgrades let the network reshard automatically.

Accounts and developer experience

Accounts can have human-readable names, such as “alice.near”, instead of long hexadecimal addresses, and several keys with different permissions can be attached to the same account. Smart contracts are compiled to WebAssembly, mainly from Rust or JavaScript.

Fees and supply

1 billion NEAR were created at genesis. New tokens are issued each epoch to pay validators, with 90% of the issuance going to validators and 10% to a protocol treasury. On the fee side, 70% of transaction fees are burned and 30% go to the contracts used in the transaction, so heavy usage can offset part of the issuance. Maximum annual inflation was 5% until the end of 2025: the nearcore 2.9.0 release, with validator voting from 28 October 2025, cut it to 2.5%.

A short history of NEAR

• 2018: the team starts working on a sharded blockchain.
• 22 April 2020: mainnet genesis, initially in a restricted proof-of-authority mode.
• 24 September 2020: the network becomes community-operated.
• 13 October 2020: validators vote to enable token transfers, completing the launch.
• 2023: a Messari study estimates that about 35% of staked NEAR runs on Amazon Web Services.
• October 2025: protocol upgrade halving maximum inflation to 2.5%.

What is NEAR used for?

NEAR hosts decentralised applications, DeFi protocols and wallets. Its current focus is “chain abstraction”: NEAR Intents let users express what they want (for example swap one asset on one chain for another asset elsewhere) and let solvers execute it across many blockchains. The project also develops NEAR AI, which offers private inference and tools for AI agents. The NEAR token pays fees, covers storage and is staked.

NEAR vs Ethereum and Solana

• Scaling: NEAR shards its base layer, Ethereum mostly relies on layer 2 networks, and Solana optimises a single fast chain.
• Usability: readable account names and flexible keys are built in.
• Ecosystem: smaller than Ethereum’s, with a strong focus on cross-chain and AI use cases.

Risks and criticism

• Competition: many layer 1 networks compete for the same developers and users.
• Infrastructure concentration: the 2023 Messari study also pointed to a reliance on cloud hosting and on a single validator client at the time.
• Security incidents in the ecosystem: in 2022 the Skyward Finance launchpad lost about $3 million to a smart contract flaw.
• Communication: in 2024 the official X account posted anti-crypto messages as part of a marketing stunt, which confused users.
• Volatility: NEAR can lose a large share of its value.

How to store NEAR

NEAR is listed on most major exchanges. To control your tokens, use a wallet that supports NEAR, or a compatible hardware wallet, and keep your recovery phrase offline. You can stake from these wallets by choosing a validator. Our guide to crypto wallets explains the options, and the token figures are detailed on near.org.