NEAR’s stablecoin market cap ended Q2 2024 at $567 million, up 164% QoQ and 717% over six months. This increase was driven by USDC, which reached a market cap of $330 million (+303% QoQ), and USDT, which reached $187 million (+117% QoQ).
Daily active addresses hit 1.9 million, up 51% QoQ and 620% YoY. Since mainnet, NEAR has surpassed 100 million addresses and averaged over 11 million daily transactions in April 2024.
Nuffle Labs secured $13 million and announced the Nuffle Fast Finality Layer AVS. This layer, built on NEAR DA, aims to reduce block finality times to three to four seconds and decrease transaction costs by 4000 times.
The NEAR Foundation is heavily investing in AI development, focusing on core infrastructure and R&D. Partnering with NEAT Protocol, the foundation granted 1 million NEAR tokens for staking to boost AI application growth and announced plans to develop an AI agent.
Grayscale launched a new public NEAR Trust. Additionally, Grayscale's first actively managed fund, GDIF, includes nine crypto assets, including NEAR, and focuses on multi-asset staking.
The NEAR Foundation’s focus is expanding chain abstraction across more chains and ecosystems, with the goal of abstracting the blockchain away from the user and developer experience. The chain abstraction vision is that apps should just work with all chains, onboarding should be seamless, and features like gas fees and bridging should become invisible to end users. To achieve this, NEAR is focusing on key developments including Account Aggregation and building a blockchain infrastructure stack that can power the Chain Abstraction movement NEAR Data Availability, Fast Finality with Eigenlayer, zkWasm with Polygon Labs, and a hyper-scalable Layer 1 through Nightshade technology. Recently, the NEAR protocol expanded from four shards to six shards.
NEAR has become a leading network by activity, and is now focusing on the next stage of its roadmap: enabling NEAR to become the home for User-Owned AI. The NEAR Foundation will invest significant capital and resources in making NEAR the best ecosystem for the development of User-Owned AI including core AI infrastructure investments through the NEAR Horizon AI Incubator, and R&D efforts through NEAR.AI.
Following an explosive six months, the crypto market experienced a downturn in Q2 2024. During the six-month period, NEAR's price appreciated significantly, increasing sevenfold from $1.1 billion to $7.6 billion. However, in Q2 2024, NEAR's circulating market cap decreased to $5.8 billion, marking a 23.6% decline QoQ. The fully diluted market cap also decreased to $6.3 billion, a 26.5% decline. Despite this downturn, NEAR's market cap ranking improved from 21st to 17th, indicating that NEAR fell less than other leading assets.
Revenue
In Q2 2024, NEAR's revenue, which measures network transaction fees but excludes storage staking, rose to $2.8 million, marking a 43.5% increase QoQ. Revenue has increased every quarter for the past year and is up 28 times compared to the same period last year. This increase in revenue is attributed to the steady rise in network activity.
NEAR employs a fee-burning mechanism for transaction fees, where 70% of all fees are burned while the remaining 30% is directed to the contract from which the transaction originated. The average transaction fee in Q2 2024 was $0.004, reflecting a decrease of 14.6% QoQ.
Supply
NEAR's native token (NEAR) is used for staking, transaction fees, and storage fees. NEAR employs a combination of inflationary and deflationary measures, with no fixed supply of NEAR tokens. The network follows a fixed annual inflation rate of 5%, with 90% of the inflationary rewards directed toward validators and the remaining 10% allocated to the protocol treasury.
As of Q2 2024, 91.3% of the total NEAR supply is in circulation. Of the circulating supply, 49.9% is staked. The annualized nominal yield from staking is 8.9%, while the annualized real yield is 4.5%.
NEAR tokens are gradually unlocked at a rate of 4.3 million NEAR per month into the treasury, with full unlocking expected by October 2025. However, these tokens will only enter the market when distributed from the treasury.
Network Overview
Usage
NEAR saw continued increased levels of activity in Q2 2024. The average daily active addresses climbed to 1.9 million, a 51.0% increase QoQ; the average daily new addresses were 330,000, a 40% increase QoQ; and the average daily transactions reached 7.7 million, reflecting a 77.8% rise QoQ.
The primary driver of NEAR activity has been the social sector, with KAIKAINOW leading the way. KAIKAINOW, a social platform by Cosmose AI that launched in September 2023, leverages blockchain and AI to deliver curated content to users' lock screens while also rewarding them with KAI-CHING tokens on the NEAR blockchain. KAIKAINOW averaged 960,000 daily active users in Q2 2024.
Infrastructure was the second leading sector on NEAR by activity. A significant development in Q1 2024 was the emergence of HOT Wallet, a Telegram wallet that supports multiple assets and integrates novel social features. It launched in early February 2024 and quickly amassed over 1 million users in the first 10 days. HOT Wallet averaged 530,000 daily active addresses in Q2 2024.
Gaming rounded out the top three sectors. Sweat, introduced during the summer of 2022, quickly became the leading application on NEAR for the subsequent year, with a cumulative user base exceeding 140 million across both Web2 and Web3 versions. Sweat averaged 189,000 daily active addresses in Q2 2024. Playember, a Web3 monetization platform that facilitates connections between brands, studios, and game developers, boasts an impressive 120 million downloads and has consistently maintained its position as a leading crypto game within the ecosystem. Playember also averaged 189,000 daily active addresses in Q2 2024.
Development
NEAR places an emphasis on supporting developers, with 30% of transaction fees distributed to the creators of the smart contract called by the transaction. In addition to this fee structure, NEAR offers an extensive suite of tools tailored for developers working within its ecosystem. These include SDKs for popular coding languages, sandbox environments, a NEAR CLI, and NEAR Developer Governance. The NEAR Dev Hub serves as a resource repository for developers, facilitating collaboration and innovation within the NEAR ecosystem. Early successes include sponsored hackathons, the formation of community groups, and collaboration on NEAR Enhancement Proposals.
Additional development activities in Q2 2024 include:
The NEAR Foundation launched an Infrastructure Committee with $4 million in funding for RPC nodes, wallet support, and cross-chain bridges.
NEAR announced partnerships at the International Tech Summit in Bermuda with Penrose Partners, Nayms, Mountain Protocol, HITCH, and Mintbase.
NEAR employs a Thresholded Proof of Stake (TPoS) consensus mechanism with three distinct validator roles: Block Producers, who are responsible for validating transactions across all shards; Chunk-Only Producers, who focus on individual shards with reduced hardware requirements; and Hidden Validators, who act as independent third-party monitors.
The implementation of Nightshade sharding began with Phase-1 in September 2022, enhancing the network's capacity to support Chunk-Only Producers. By Q1 2024, NEAR launched Phase-2 of Nightshade Sharding with six shards operational on mainnet, progressing towards the plan to expand to 100 shards. Q1 2024 also saw the launch of the Enterprise Node Operators program by Meta Pool in partnership with the NEAR Foundation, aiming to onboard leading institutions into the ecosystem. Stateless Validation is expected to launch on mainnet in the second half of 2024. This upgrade is projected to improve throughput for each shard by 5x and increase the total number of shards available for the network.
By the end of Q2 2024, NEAR had 228 active validators and 50% of eligible supply staked.
Governance
In Q2 2024, Gauntlet partnered with the NEAR Foundation to redesign NEAR's governance framework. The partnership will focus on a new stake-weighted governance structure, grant analysis to refine initiatives, and community renovation through delegate collaborations. Gauntlet will also assist in developing, implementing, and optimizing incentive programs.
Ecosystem Overview
DeFi
NEAR's Total Value Locked (TVL) ended Q2 2024 at $286 million, reflecting a 15% decrease from the previous quarter, while DeFi TVL (NEAR) was $54 million, showing a 17% increase QoQ. Despite the quarterly decline, DeFi TVL (USD) is still up approximately 5x YoY. Within the NEAR Network's TVL, NEAR contributed $267 million, and Aurora contributed $19 million. NEAR ranked approximately 27th among all networks by TVL.
In Q2 2024, all leading DeFi protocols on the NEAR Network saw decreases in their TVL. Burrow remained the leading protocol by TVL by a wide margin, with its TVL at $193 million, reflecting an 11% decrease QoQ and accounting for 67% of the total TVL. Ref Finance followed with a TVL of $55 million, a 22% decrease QoQ. Orderly Network had a TVL of $3 million, showing a decrease of 28%.
A new protocol, Allstake, launched on June 20th and quickly amassed $12 million in TVL, ranking it third in the NEAR network. Aurora had a TVL of $19 million, a 45% decrease QoQ, with $11 million, or 58%, of this TVL coming from Aurora Plus.
In Q2 2024, liquid staking TVL decreased 20% QoQ to $255 million. Despite the decrease in liquid staking TVL, the liquid staking rate, defined as the amount of NEAR staked relative to the circulating supply, was up 5% QoQ to 8%. The Linear Protocol had a TVL of $135 million, reflecting a 14% decrease QoQ, while Meta Pool's TVL was $112 million, showing a 25% decrease QoQ.
In Q2 2024, NEAR had an average daily DEX volume of $9 million, reflecting a 3% increase from the previous quarter and a 2x increase over the previous six months. Ref Finance established itself as the leading DEX by volume on NEAR with $7 million in daily volume, an 11% increase QoQ. Orderly Network had $2 million in daily volume, showing a 16% decrease QoQ.
In Q2 2024, NEAR had an average daily DEX volume of $8.6 million, reflecting a 2.5% increase from the previous quarter and a 2X increase over the previous six months. Ref Finance established itself as the leading DEX by volume on NEAR with $6.9 million in daily volume, an 11% increase QoQ. Orderly Network had $1.7 million in daily volume, showing a 16% decrease QoQ.
In Q2 2024, NEAR’s stablecoin market cap saw another increase, reaching a total of $567 million, up 164% QoQ and 717% over six months. The increase was led by USDC, with a market cap of $330 million, reflecting a 303% increase QoQ, and USDT, with a market cap of $187 million, showing a 117% increase QoQ. USN, the winding-down stablecoin from Decentral Bank, remained unchanged in its market capitalization.
Additionally, the Frax team announced plans to launch frxNEAR, a NEAR stablecoin and liquid staking derivative.
NFTs
In Q2 2024, NEAR NFT sales volume (USD) experienced a significant spike, increasing 800% QoQ to an average daily NFT sales volume of $34,000. Concurrently, the average daily NFT sales rose 430% QoQ, reaching an average of 2,000 daily sales.
While activity was heightened throughout the quarter, NEAR saw a particularly notable spike in April, culminating in a yearly high on May 1, 2024, with sales reaching $650,000. This surge in activity was due to activity on MITTE marketplace. Since launch, MITTE has become the leading NFT marketplace on NEAR with over 90% of NEAR Protocol NFT volume going through MITTE.
Chain Abstraction
The NEAR ecosystem’s focus for 2024 is expanding chain abstraction across more chains and ecosystems, with the goal of abstracting the blockchain away from the user and developer experience. The vision for chain abstraction is that apps should work seamlessly with all chains, onboarding should be effortless, and elements like gas fees and bridging should become invisible to end users. To achieve this, NEAR is focusing on several key developments outlined below.
Account Aggregation
NEAR's Account Aggregation aims to offer users the ability to transact on any blockchain through a single account and interface. It simplifies user interactions across multiple blockchains by integrating three core technologies:
NEAR Account: Account abstraction for smooth onboarding and recovery of accounts. In Q2 2024, the NEAR Foundation partnered with D3 to introduce NEAR Name Tokens, which offer simplified wallet addresses, cross-platform usernames, verifiable credentials, and a potential .NEAR domain integration.
Chain Signatures: Enabling the NEAR network to have MPC nodes that jointly sign transactions and messages. This eliminates asset bridging, enhances security, and improves the user experience across DAOs, NFT minting, and airdrops, promoting mainstream crypto adoption. Chain Signatures launched on mainnet on March 26th.
Intent Relayers: Parties in the ecosystem that can execute the user's intent on different chains.
This approach enables a unified, non-custodial account experience, significantly reducing the barriers to accessing and navigating the decentralized web.
Data Availability
The NEAR Data Availability (NEAR DA) layer is designed to enhance data availability for Ethereum rollups in a cost-efficient manner. Partnerships include Arbitrum Orbit, Polygon CDK, Madara by StarkNet, Caldera, Fluent, OP, Gateway, and AltLayer. NEAR DA aims to substantially reduce developer costs by offering a cheaper alternative for call data.
Comparative data highlights the cost efficiency of NEAR DA compared to other solutions. As of December 2023, 231 kB of calldata costs $0.0016 on NEAR, significantly lower than $140.54 on Ethereum L1 and $0.046 on Celestia for the same amount.
Fast Finality Layer
In Q2 2024, information on the Fast Finality Layer was revealed with the announcement by Nuffle Labs, formerly known as NEAR Modular, about the development of the Nuffle Fast Finality Layer (NFFL) AVS. This finality layer, built on top of NEAR DA, aims to enhance block finality across L2s, reducing transaction times to three to four seconds and decreasing transaction costs by a factor of 4000. The NFFL feature is currently in the testnet. Additionally, Nuffle Labs announced securing $13 million in funding led by Electric Capital.
Pagoda, the NEAR ecosystem development team, leads the collaboration to transition the NEAR-Ethereum Rainbow Bridge to an actively validated service (AVS). This effort aims to improve composability with Ethereum Layer 2s and reduce liquidity fragmentation within the rollup ecosystem. The partnership aims not only to benefit projects on Ethereum but also to enhance the bridging experience between NEAR and Ethereum, enabling faster transaction finality with increased security and decentralization.
zkWasm
The NEAR Foundation and Polygon Labs partnered to develop zkWasm, a zero-knowledge prover designed for Wasm blockchains. The collaboration focuses on providing a customizable development environment for Wasm chains to integrate more effectively with Ethereum's liquidity and network capabilities. As part of this collaboration, the NEAR Foundation has become a core contributor to Polygon's Chain Development Kit (CDK).
User-Owned AI
NEAR is focusing heavily on AI development by investing in core infrastructure and R&D. The NEAR Horizon AI Incubator is a collaboration with founders to build and integrate AI and Crypto, including model training, compute services, data platforms, security, and developer tools.
The NEAR Foundation partnered with NEAT Protocol, granting 1 million NEAR tokens for staking to boost AI application growth on NEAR. NEAT simplifies rollups with offchain execution, reducing costs for AI and gaming. The NEAR.AI initiative, led by Alex Skidanov, focuses on R&D to advance AI innovation within NEAR. Lastly, Chain Abstraction allows AI agents to execute intents across blockchains without requiring user interaction with the underlying blockchain.
Closing Summary
Despite the marketwide pullback in Q2 2024, the NEAR Network saw continued growth across multiple key performance indicators. NEAR daily active addresses reached 1.9 million, up 51% QoQ and 620% YoY. This growth is driven by leading applications across multiple sectors, including KAIKAINOW, Sweat, HOT Wallet, and Playember. Additionally, NEAR’s stablecoin market cap ended Q2 2024 at $567 million, up 164% QoQ and 717% over six months.
NEAR also had multiple notable developments on the technical front. Nuffle Labs secured $13 million and announced the Nuffle Fast Finality Layer AVS. This layer, built on NEAR DA, aims to reduce block finality times to three to four seconds and decrease transaction costs by 4000 times. The NEAR Foundation announced it is heavily investing in AI development, focusing on core infrastructure and R&D. Partnering with NEAT Protocol, the foundation granted 1 million NEAR tokens for staking to boost AI application growth and announced plans to develop an AI agent.
NEAR continues to develop its network and focus on core components of the Chain Abstraction vision. Expect NEAR to continue making notable technical advances towards its goal of abstracting the blockchain away from the user and developer experience.
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