Overview of the NEAR Token
The NEAR token (aka $NEAR) is a utility token which powers the NEAR Protocol blockchain and all applications which use it. NEAR Protocol is a fully operational, open source blockchain designed to solve both the scalability and usability problems faced by other protocols. It is designed from the ground up to give builders the best tools to build scalable applications that real people can actually use.
As described in the Economics section below, $NEAR uses a block-rewards-with-burn model that, at high rates of usage, means token supply will be reduced over time.
The NEAR token is used by 2 main groups of people:
Apps & Users
Similar to blockchains like Ethereum, the NEAR token is used to pay for transactions by users of applications which are built on top of the NEAR platform. These apps can be anything from new Defi protocols to digital item marketplaces to everyday gaming apps.
Validators & Delegators
The nodes which run the network are compensated by inflationary rewards. Tokenholders of any size can stake by lending their tokens to a validating pool and earn return by helping to secure the network this way.
How to Get the NEAR Token
There are 3 ways to get $NEAR
You can earn $NEAR by taking part in development bounties, by running a community which helps people build on NEAR, by winning a NEAR hackathon or otherwise being an active part of the community. If you are able to attract other people to lend you tokens for staking, you can also earn $NEAR by running a validator.
$NEAR is available on several major exchanges, where you can sign up and buy the token using either fiat currency or crypto.
How to Store the NEAR Token
Similar to other blockchains, NEAR tokens are linked to accounts which are secured by private keys. For most people, that means you need to sign up for a wallet which supports NEAR and the wallet will take care of the difficult parts.
If you bought $NEAR on an exchange, they will have the wallet for you.
If you bought $NEAR on Coinlist or previously, you will have an account from your claims process.
If a friend sent you a NEAR Drop, you will be asked to create a NEAR wallet.
Learn more about how to custody NEAR tokens in the custody docs.
How to Use and Earn Rewards
with the NEAR Token
The ways to use $NEAR will grow over time. During early days, most of the complex functionality of the network still requires some advanced tools but there are a few easy things you can do with just an account. As apps launch on NEAR, you’ll see more.
Send $NEAR back and forth between accounts of your and a friend and check out the transactions in the Block Explorer. Because transaction fees are very low, you can quickly and easily move very small amounts of $NEAR to play with it.
Stake your NEAR
Stake your NEAR by delegating to a validator. During early days of the network, this may not be supported by consumer wallets, so it’s considered an advanced feature. Over time, more wallets (and exchanges) will support earning delegation rewards directly from within their apps. Information about staking rewards is available in this blog post.
From the community (unofficial): Dokia offers a community-run staking interface
Economics of the NEAR Token
The NEAR token is the glue that holds the NEAR Protocol together by allowing users of the network to pay for the services provided by the operators of the network who run the code that has been deployed on top of it. NEAR’s economics are designed to make the network secure but inexpensive to use, even while it scales. Here’s how it works.
NEAR is a “Proof of Stake” network, which means that each block of the network is only approved when enough validators agree that each of the transactions it contains have been executed correctly. The validators who participate in this run the hardware which actually operates the network but each of them is backed by a “staking pool”. Tokenholders from across the ecosystem can lend, or “delegate”, their tokens to any one of these pools. When validators vote to approve blocks, their votes are weighted by how many tokens they have in their staking pools.
Applications and Accounts which are deployed to the NEAR network need to pay two kinds of fees.
- First, they must pay for storage by keeping a small number of tokens in their accounts for each kilobyte of space that account uses.
- Second, they must pay for the execution of transactions that run code, for instance transferring tokens or changing the value of someone’s account balance. These fees are priced based on the complexity of the transaction and, similar to other networks, this is priced in an accounting unit called “gas”. Unlike other networks, these fees are extremely inexpensive — for example, they are 10,000x cheaper than Ethereum.
Because the amount of space in each block is limited, people are willing to pay to include their transactions. If blocks become congested and fees are too high, the network will dynamically add capacity by increasing the number of shards, ensuring the price for transactions stays relatively stable.
Validators are rewarded for providing network operation services by receiving rewards of newly minted tokens for each block which are proportional to the amount of stake that validator has in its pool. They can choose what proportion of these tokens they will keep and what portion they will pass through to the delegators who gave them the stake. Initially, the network creates 5% new tokens each year, of which 90% go to these validator rewards and 10% are allocated to the protocol Treasury to support ongoing development.
Fees which are paid for transactions in each block are divided into 2 parts.
- A portion of the fee is passed through to an address specified by the contract owner, which allows developers to (finally) benefit from deploying popular contracts.
- The remainder of the fee is burned. This means that, at a very high rate of network usage, the rate of token burning can exceed the rate of newly minted tokens and the network will become deflationary.
Of course, the most important feature of the NEAR token isn’t related to economics at all — it’s that the token can be hidden from users entirely because contracts can pay gas fees on their behalf, allowing developers to build experiences which feel more like today’s web but take advantage of the underlying innovations of tomorrow’s Open Web.
$NEAR Circulating Supply and Distribution
Information about $NEAR circulating supply, total supply and lockups are provided in depth in the Token Supply and Distribution blog post, along with detailed charts, tables and methodology notes.
Communities of Tokenholders
This is an open source project with a global group of contributors and a growing base of app developers and users. We hope you’ll enjoy it as it grows.
Discussions about tokenholder issues, including economics and governance, take place in the new NEAR Forum at gov.near.org. near.chat is the most active place to discuss community and development issues. For more general conversation, check out Twitter, Telegram, WeChat or by joining our Mailing List.
Price-specific conversation is discouraged in all official channels. There are plenty of unofficial communities out there for that if it’s what you want. The team is primarily focused on building 🙂
As always, please use care and judgement when responding to anyone who appears to be from the “team” on social channels and never give up your account information or transfer tokens based on these conversations.
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