NEAR, a prominent smart contract platform showcased resilience and progress in the second quarter of 2023 despite facing regulatory scrutiny. The platform took steps toward fostering acceptance, experienced significant user growth, and launched the Blockchain Operating System (BOS).
In the second quarter, NEAR was mentioned in the Securities and Exchange Commission’s (SEC) complaint against Coinbase. However, the platform’s financial metrics remained steady despite a decline in revenue and market capitalization.
Let’s explore the key developments and achievements that shaped NEAR’s progress in Q2 2023.
The Sweat Economy and BOS
NEAR’s Blockchain Operating System (BOS), launched in March, proved to be a significant milestone. NEAR Social, a social layer within the BOS, attracted over 15,000 user accounts within four months. Additionally, nearly 6,000 widgets were created, contributing to a vibrant ecosystem.
Also, NEAR’s leading application, the Sweat Economy, continued to gain traction. With a total of 19 million Sweat wallets, it recently conducted one of the largest governance votes in decentralized autonomous organization (DAO) history, attracting over 350,000 participants. This demonstrated the active engagement of the NEAR community.
NEAR made notable progress in achieving its 2023 goal of driving adoption and attracting more users to the NEAR Protocol and the BOS. This progress was fueled by strategic partnerships with established industry players and grassroots initiatives, indicating a multi-faceted approach to growth.
Market Capitalization and Token Revenue
NEAR experienced a decline in circulating market capitalization, reaching $1.25 billion at the end of the quarter, reflecting a 25% decrease quarter-over-quarter (QoQ). However, the platform quickly recovered after an initial drop following the SEC news. NEAR ranked as the 40th largest crypto project by market cap at the end of Q2. NEAR’s revenue, measured by total gas fees spent, amounted to $98,000 in Q2.
NEAR’s native token (NEAR) serves various purposes, including staking, transaction fees, and storage fees. NEAR employs a combination of inflationary and deflationary measures, with a fixed annual inflation rate of 5%. Approximately 81% of the total NEAR supply is currently in circulation, with gradual unlocking expected by October 2025.
Funding and Treasury
The NEAR Foundation’s treasury, managed with a risk-minimization approach, totalled $0.9 billion at the end of Q2. It includes fiat reserves, NEAR tokens, and loans/investments. Total treasury holdings declined by $0.2 billion in the quarter, mainly due to a fall in the price of NEAR.
Also, NEAR actively pursues a decentralized model of capital allocation through community DAOs. Community DAOs, including Marketing DAO, Dev Hub, Creatives DAO, and the NEAR Digital Collective, enable community-driven decision-making on fund allocation for NEAR-related projects. The NEAR ecosystem also benefits from a community treasury, supporting grassroots initiatives.
Despite challenges, NEAR demonstrated resilience and development in the second quarter of 2023. The development of NEAR was aided by the release of the Blockchain Operating System (BOS), the Sweat Economy’s success, strategic alliances, and grassroots activities.
Financially, NEAR showed stability, with market capitalization and revenue experiencing temporary declines. As NEAR continues to pursue decentralized funding models and expand its developer ecosystem, it positions itself as a significant player in the blockchain space.