NEAR Foundation hopes all of you are having a great start to the year. Here are some of the top news stories from the NEAR Foundation and our thriving ecosystem, as well as press headlines from around the globe.

Calimero raises $8.5 million in funding

In an exclusive with The Block, London-based startup Calimero announced an $8.5 million funding round co-led by NEAR Foundation to bring private sharding to NEAR. Calimero’s founders, ex-NEAR engineers Sandi Fatic and Mario Halambek, are building the “AWS for private sharding” and currently have their platform in alpha testing. The story has been covered across North America, Europe, Asia, and Africa, and is creating a lot of excitement throughout the NEAR ecosystem.

SailGP opens fan-owned team for investment

Another big story that hit the press was the first fan-owned SailGP team opening for investment.  As reported in Decrypt, the team was created by a modified community DAO on NEAR protocol, giving sailing fans the opportunity to run and invest in a team in their sport. The offer will close after $35 million in funding is raised and the team will debut in June 2023.

Sheila Warren partners with Forkast News

Sheila Warren, Advisor to the Crypto Council and NEAR Foundation, partnered with Forkast News to plot the course for Web3 in 2023. She identified regulatory decisions as a key area for the year ahead, with lots of activity expected in the US congress and India leading efforts in the G20. Sheila also identified Asia, and specifically ASEAN, as the region to watch for blockchain adoption and regulatory progress.

NEAR’s global press coverage

NEAR Foundation enjoyed coverage across every region in January, with 76 media mentions globally. One story covered extensively was Marieke Flament’s hopes for 2023 with Forkast News, predicting that the ongoing Twitter debacle has warranted an overhaul of the social media status-quo. Users are searching for platforms that are unbiased in their censoring of content and more transparent in their operations, presenting a key use case for blockchains. Marieke also outlined the need for continued improvements in diversity across the Web3 space to create a better working environment for everyone and improve decision making.

Towards the end of January, we partnered with CoinDesk to take a look at the impending crypto winter and how the NEAR ecosystem will fare. The Web3 industry is in for a tough 12 months due to a contraction in user engagement and a scaling back of venture capital. However, NEAR is primed to thrive in the year ahead — with major new infrastructure, including NEAR Social and NEAR Crowd, real world value on the NEAR protocol is set to take off. The Foundation continues to support our bustling ecosystem, and the development community is only growing stronger through the community DAOs.

Finally, Marieke Flament wrote about our recent Forbes post about the importance of servant leadership in the world of tech. Forget ego — this never bodes well in the long term.  

Leaders must do their jobs “for the broader impact they can go on to have,” said Flament. “There are many ‘fake servant leaders’ who pretend they are doing it for the benefit of others but are all too often caught by their own deception and greed, leading to a loss of confidence in authority that runs deep and has a lasting impact on the way people feel about work.” 

That’s all for this month. If we missed anything out or want to share anything for next month’s roundup, get in touch!

NEAR Foundation is excited to announce a new partnership with Dropt, focused on embedding Web3 technologies into customer loyalty and engagement programs. With ownership and interoperability being critical components in the next generation of the customer experience, Dropt chose to build on NEAR. Its compelling tech stack and powerful tooling offer Dropt the ideal foundation for delivering these features at scale and redefining “frictionless onboarding”.

With Dropt, teams and enterprises can now easily and seamlessly introduce blockchain-powered loyalty and engagement mechanics into their customer journey. These Web3 features will help increase engagement, retention, and lifetime value without customers ever even knowing they are interacting with the blockchain. Customers simply use apps and sites just as they do today, but with new NFT-powered features. 

NEAR and Dropt believe this is the key to mass adoption. Users are not interested in what is happening in the background—they simply want a fun experience that is engaging and rewarding. 

For one of its first integrations, Dropt will be partnering with a NBA championship team, led by one of the most dominant players in the world. 

Blockchain mechanics shift the paradigm for customer engagement

By introducing NFTs to the customer journey, brands immediately integrate an incentive structure into the customer experience that elevates participation and engagement like never before. Branded marketplaces, where customers can interact with tokens, give users the ability to monetize their engagement with a brand.”With Dropt, NFTs can feature different kinds of perks and benefits. In this way, customers are better aligned with the brand’s and naturally become true evangelists.

A changing landscape

In an era where customer expectations are evolving and acquisition costs are rising, Dropt’s highly curated experiences enable brands to exceed these expectations. Let’s face it, loyalty is stale. Consumer expectations are shifting—people want to align themselves with brands that connect with authenticity and make consumers feel like part of a community.

Dropt transforms the loyalty experience into a deeper, more community-based level of engagement, enabling brands to better connect with their communities. This not only modernizes how brands engage in this digital era, but also creates new acquisition channels.

To capitalize on this opportunity, NEAR Foundation and Dropt believe user experience is vital. It’s unrealistic to expect customers to change their behavior, which is why Dropt and NEAR are working alongside cutting-edge authentication and gamification partners to build a web that’s both familiar and brings the best of what Web3 has to offer. 

Dropt is confident that in partnering with the Foundation, mass adoption is NEAR.

Building on the 2023 strategy for NEAR Foundation and Pagoda shared here at the end of last year, the goal of this post is to share the specific objectives and target metrics that will make this vision a reality. 

All NEAR ecosystem OKRs for 2023 distill to a single North Star: the goal of 10 million monthly active accounts (MAAs) by the end of the year. This is approximately 12x growth from today’s 800K MAAs (the all-time high was around 900K) and puts NEAR solidly on the path to achieve mainstream adoption in the next few years. The Foundation and Pagoda have chosen to focus on MAAs because they believe user adoption is the best indicator that NEAR is providing real value to end users today with monthly frequency and eventually weekly or daily. 

During 2023, NEAR will transform from a Layer-1 blockchain into the Blockchain Operating System, connecting applications, tooling, social, earning, and developer components across the Open Web. With product development of NEAR Discovery, the bottom-up community approach, the top-down partnerships growth strategy from NEAR Foundation, and continued iteration on the best user experience and onboarding in Web3, each team in Pagoda and NEAR Foundation will contribute to overall growth in usage over the next year. 

The following OKRs (objectives and key results) are the guideposts for each team in 2023.

NEAR Foundation Goals for 2023

What does success look like for NEAR Foundation at the end of this year?

• NEAR is the blockchain operating system: brand, marketing
  • 100% of content and processes running on NEAR Discovery
  • 30% of NEAR community is using Discovery
  • 3M Twitter followers and 2x increase in SOV (share of voice)
• NEAR is a thriving decentralized ecosystem: community, legal, accelerator
  • NDC and 3 community DAOs set up with core contributors and legal structure
  • 50+ NPS score from community 
  • $250M in external capital flowing into minimum of 100 projects
• NEAR is transforming the best Web2 projects: BD
  • 5M+ MAAs added to NEAR through minimum of 3 major partnerships
  • 12+ landmark partnership agreements
  • 24+ tier-2 partnership agreements 

By the end of 2023, NEAR Foundation will have transformed NEAR into a blockchain operating system, made possible through NEAR Discovery, fostering an even more thriving decentralized ecosystem with more MAAs, major partnerships, and external capital inflow.

Pagoda OKRs

What does success look like for Pagoda at the end of this year? 

• NEAR has the best-in-class protocol and infrastructure: core, protocol, security
  • 100% on-chain availability and security to support product growth
• NEAR has solutions that support millions of users: solutions & product
  • 10+ partnerships integrated with companies of 1M+ users, 100K+ MAA growth
• NEAR onboards and retains millions of users: product, Discovery, DevOps
  • 20%+ month-over-month growth in MAAs
  • 25% 8-week retention and K-factor greater than one
  • 20% month-over-month growth in Monthly Active Developers (MADs), with 20% growth in used components and component retention

By the end of the year, Pagoda will have created NEAR Discovery and other solutions and products for developers, while growing partnerships and monthly active developers and accounts. 

Note on Metrics

Different NEAR teams have tracked various metrics to measure success at different points, but a macro goal for 2023 is to unify progress measurement across the organization. The decision to focus on Monthly Active Accounts reflects two critical points: first, that accounts will be a more accurate measure than wallets in NEAR Discovery thanks to improvements in onboarding, and second, that NEAR cannot provably track unique users because of the default privacy of Web3––many users have several accounts to handle different types of activity. 

NEAR’s goal since the first NEARCON in 2021 has been to get to a billion users within five years, or in 2026. While a high number of daily active users (DAA) will be necessary for achieving a billion users, the NEAR ecosystem is not there yet––daily usage will require many successful apps and seamless user journeys between them, which is the goal for NEAR Discovery. Over time, NEAR Foundation and Pagoda expect to begin tracking more granular metrics such as Daily Active Accounts, accounts that use more than one app, and retention across apps. 

2023: The Year of NEAR 

NEAR is the best-positioned ecosystem in Web3 to achieve mainstream adoption in 2023 despite difficult market conditions. With NEAR Foundation, Pagoda, and the community working towards concrete, shared goals and a common vision, the ecosystem will be better aligned with clearer paths to contribution. The Foundation will continue delivering on its commitment to communicate often about its activities and progress.

Watch on Twitter and NEAR Social for progress updates on these goals in Q1 as well as a public dashboard for easier tracking of target metrics soon. 

NEAR Foundation and Pagoda, along with the Wallets Working Group, have conducted extensive community discussions over the last several months about the evolution of wallets in the NEAR ecosystem. In keeping with the Foundation’s goal to empower the community and continue to decentralize the ecosystem over time, the focus since NEARCON has been to expand the wallet offerings to NEAR users and to decentralize the NEAR Wallet.   

MyNearWallet is now open source and under the stewardship of Developer DAO to maintain as a public good. (Pagoda took over MNW after Kikimora ceased operations in December due to funding issues.) DevDAO announced this week that they are accepting applications for teams to take over maintenance of MyNearWallet to evolve the product while keeping it open source for the benefit of the developer community. For more information about how to apply, visit the Developer DAO gigs board on NEAR Social. 

If you have been using MyNearWallet or wallet.nearpages.wpengine.com, you don’t need to take any action. MyNearWallet service will not be interrupted in this transition and, in fact, users can expect product improvements over time from the chosen maintainer team. The goal is to offer more wallet options to users across the NEAR ecosystem and to decentralize the development of wallet products across the developer community. 

Pagoda will continue maintaining wallet.nearpages.wpengine.com. Over time, the NEAR wallet will integrate into the forthcoming NEAR Discovery product. But for now, no action is needed from users. Legacy wallet users may consider migrating to another wallet now that an expanded range of options is available via Wallet Selector, which will soon live on wallet.nearpages.wpengine.com. Numerous wallets optimizing for a variety of user types, security requirements, and use cases are already available, with more on the way in Q1. 

NEAR’s commitment to serving as the de facto entry point to Web3 remains intact. Building without limits is about continuously improving on industry standards and delivering the best possible experiences to developers and users alike. 

A few weeks ago, as part of a series of blogs on the state of funding, NEAR Foundation announced it would be examining its evolving funding strategy. This is in line with the Foundation’s  goal of providing a clear and concise update to continue to foster transparent communication. 

At this time, NEAR Foundation is actively working towards a more decentralized model of capital allocation that will initially involve the DeveloperDAO, MarketingDAO, CreativesDAO, with an additional DAO that will begin formation in Q1 of 2023. This will impact the ecosystem in the following ways:

1. Effective immediately, NEAR Foundation will cease allocating capital directly from our inbound start-up grants program, with the exception of our current events grants, which will be handed over to the MarketingDAO when they are set up to manage them.  Request events funding by following the steps outlined here.
2. In January and February, we will be working directly with community members to outline a clear application process for funding via the DAOs. Processing time is expected to take 6-8 weeks. If you are interested in helping us form the new DAO with a focus on start-up projects, please submit your interest using this contact form.
3. Any  projects that have already received a portion of their funding and are working towards their agreed milestones will continue to be supported through the remaining milestones.
4. Any application that is not already in the approval stage will not receive funding. However, we will do our best to redirect you to appropriate, alternative funding sources.

NEAR Foundation’s goal is to empower the ecosystem to make decisions that support  the strategic approach that will drive NEAR  to the next phase of its roadmap, with a look ahead at new areas of product and development, as outlined in the NEAR Strategic Update and Outlook for 2023. We will continue to be as transparent as possible about the new funding strategy as it rolls out. The Foundation will communicate as often, and as frequently, as possible. We encourage the community to continue providing meaningful feedback so we can iterate more quickly as we unite to build the NEAR Ecosystem together.

It’s been a whirlwind year for NEAR – and it’s hard to believe that 2022 is coming to an end. It’s been a year filled with massive milestones and achievements, including the biggest NEARCON ever, record-breaking new wallet creation, and much more.

With 2023 around the corner, it’s a great time to reflect and take stock of all the exciting happenings and announcements that took place in 2022. NEAR Foundation congratulates every developer, community member, and partner that made 2022 a blast.

Without further ado, here’s everything that happened with NEAR in 2022, how the ecosystem is successfully navigating bear market conditions, and why NEAR is primed for explosive growth heading into 2023!

Protocol Progress and JavaScript SDK

The last 12 months saw huge progress on the protocol level, with an exciting roadmap charting the course for 2023 and beyond. From staking upgrades to new developer tools, the NEAR protocol made huge strides in onboarding new builders and the next 1 billion users.

NEAR introduced the brand new JavaScript SDK, enabling developers to build on NEAR using the most popular programming language in the world. Brendan Eiche, the inventor of JavaScript and co-founder of privacy-first browser Brave, even joined a panel at NEARCON to discuss the new SDK, Brave’s new support of Aurora, and why he’s excited about NEAR.

NEAR also saw the introduction of meta-transactions, allowing third parties to pay transactions for the transaction cost of any account. Users can then be onboarded to NEAR apps without owning any NEAR tokens. Meta transaction development will continue through next year and will be critical to new wallet growth.

Stake Wars’ latest iteration also began in 2022, marking another step towards decentralizing the network. Stake Wars will increase the total number of validators as chunk-only producers for the next phases of sharding. The chunk-only producer role will be more accessible to new validators who don’t have sufficient $NEAR to run a Block Producer node.

Phase 1 of Nightshade Sharding Commences

Stake Wars was a critical step in the transition from Simple Nightshade to Phase 1 of sharding in 2022. As Phase 1 continues, total validators will increase from around 100 to 300, with a significantly lower seat price. Phase 1 was crucial to facilitate scaling, improve decentralization, and bring the Open Web to mass adoption.

There will be an 86% decrease in collateral requirements to become a chunk-only producer as Phase 1 of Nightshade concludes in 2022 and continues into the next year. Phase 1 went live on mainnet in September 2022 with key contributions and assistance from the Pagoda team.

As NEAR co-founder Illia Polosukhin told CoinDesk in the lead-up to the Phase 1 roll-out, “the more users the network gets, the more decentralized the network gets as well.” This allows NEAR to add more validators in response to more demand for the network, delivering on the promise of speed, scalability, and efficiency. 

Major Strides in Funding and Transparency

A thriving NEAR ecosystem requires resources and trust, both of which made major strides. The birth of Transparency Reports assured the community that all core stakeholders in NEAR are operating in good faith and from a position of financial strength. These reports provide important information about the health of the protocol and ecosystem, including staking distribution, daily transactions, and new accounts created. (Read the Q3 Transparency Report.)

NEAR Foundation CEO Marieke Flament also hosted a post-FTX AMA, re-assuring the ecosystem of NEAR’s runway and explaining why the current bear market is a time for a conviction to build.

To see how NEAR Foundation and other ecosystem funding projects have been distributing portions of the $800M in funding throughout 2022, check out Q1/Q2 and Q3 Transparency Reports. Key areas of funding include Proximity Labs and DeFi, DAOs, NFT infrastructure, and Regional Hubs. The NEAR Digital Collective (NDC) was also announced and launched at NEARCON, with one of the goals being to further decentralize and democratize grants giving and decision-making processes.

Ecosystem Growth

NEAR’s 2022 was one of huge growth and innovation. New partnerships like Sweatcoin and SailGP were major stepping stones toward bringing Web3 to the masses. Projects in areas such as gaming, music, and NFTs showcased that the NEAR ecosystem is thriving and poised for new heights in 2023.

The NEAR protocol experienced 15x growth in cumulative accounts over the past year with 22M+ today. NEAR also has 900K monthly active wallets, marking a major increase from this time last year. And in 2022, the NEAR ecosystem generated $330M of external capital in projects building on NEAR. 

Movement Economy

One of the biggest catalysts for new NEAR wallet and account creation was the partnership with Sweatcoin. The $SWEAT token rewards users for every step they take throughout the day, encouraging users to live healthy lifestyles. Sweatcoin migrating to NEAR pushed total wallets from 2 million at the beginning of the year to over 20 million by November. As Flament pointed out during the Sweatcoin keynote at NEARCON, the movement economy is in its infancy, and NEAR is poised to be a leader in the space with the help of Sweatcoin.

DAO Innovation

Another huge addition to the NEAR ecosystem was the world-renowned boat racing league, SailGP. SailGP partnered with NEAR to pioneer the intersection of sports, Web3, and Decentralized Autonomous Organizations (DAOs). In addition to offering NFT collectibles on the NEAR blockchain to fans, SailGP will use AstroDAO tooling to create the first fan-owned team as a DAO. In addition to the growth of ecosystem projects like Kin DAO for equity and inclusion, it was a banner year for NEAR and DAOs.

Blockchain Music

You may not have noticed, but 2022 saw a massive surge in interest about music and Web3. And one of the most innovative projects in this area was in the NEAR ecosystem, with the launch of Endlesss. The music creation, marketing, and community development platform’s NEAR integration went live in the summer as a virtual gathering place blending social media features with music production tools. Endlesss enables musicians of all skill levels to conduct “jam sessions” on the NEAR blockchain and mint their music as NFTs. 

Gaming

The NEAR ecosystem got a huge dose of star power with the unveiling of Armored Kingdom. Backed by Hollywood star Mila Kunis, Armored Kingdom will be an immersive gaming, NFT, storytelling, and metaverse experience built on the NEAR blockchain. The project kicked off with a first edition NFT comic book airdrop at Consensus, Austin. NEAR also announced the launch of the South Korea Regional Hub with a focus on bringing the NEAR blockchain to the massive local game development community. 

PlayEmber also established itself as a key player in the NEAR gaming ecosystem, taking a mobile-first approach to Web3 gaming and bringing advertisers into the space. PlayEmber’s games now have over 4.2 million monthly active users, and recently closed a $2.3 million pre-seed raise led by Shima Capital.

NFTs

With core NFT infrastructure maturing in the NEAR ecosystem, 2022 was a year of innovative use cases and groundbreaking projects. NEARCON saw the announcement of a key grant to Few and Far, a premium NFT marketplace on NEAR with a seamless UX and simple minting solutions. One of NEAR’s biggest NFT projects, Mintbase, received over $12 million in funding this August. Mintbase empowers niche creators with the ability to mint NFTs of any type with little technical know-how, exemplifying NEAR’s commitment to making Web3 easy for everyone.

Looking Ahead

From the launch of Phase 1 sharding to protocol upgrades and ecosystem growth, 2022 was a huge leap for the NEAR ecosystem in many respects. It’s the year that the “Create Without Limits” vision was introduced, the biggest NEARCON ever took place, and some of the most important partnerships in the history of NEAR were cemented. It was also a year in which NEAR committed to more transparency and communication with the community.  

Looking forward, NEAR will continue to champion Web3 as a catalyst for change, in addition to environmental sustainability as a carbon-neutral blockchain. In 2023, the NEAR community can expect even more partnerships that push boundaries and support projects that will enhance and empower a prosperous NEAR ecosystem.

Transparency continues to be a core focus of the NEAR Fondation, so every week it will publish data to assess the health of the ecosystem. This is to aid the NEAR community in understanding the current state of NEAR across key metrics. The Weekly On Chain Data Report will also appear at the top of quarterly reports as well as monthly funding reports.

Read the Quarterly Transparency Reports. 

Read the Q3 Transparency Report 

Read Last week’s  On-Chain Data Report.

The Importance of Transparency

The NEAR Foundation has been committed to transparency since inception. It values openness to all stakeholders, including investors, builders, and creators. The Foundation’s focus on openness to the entire community will always be a core tenet.

The Foundation values the community’s continued support and feedback as it publishes these reports. It’s part of the Foundation’s ongoing response to the community to provide as much transparency as possible.

New Accounts and Active Accounts

Daily new account (or new wallet) creation ended the week at around 17,000 per day. This is a slight decline from last week, which ended with  20,000 daily new accounts. The peak for this week was logged on December 20th when 19,000 new wallets were created. Put into context, roughly 14,300 wallets were being created daily at the start of December, making it a positive month for new accounts.

If a NEAR wallet makes an on-chain transaction, it’s counted in the Daily Number of Active Accounts metric. This past week, Daily Active Accounts ranged between 39,266 on December 18th to 46,235 on the 19th of the month. This is still well above August and September’s numbers, where Daily Active Accounts hovered around 10,000 with a Q4 2022 high of 183,000 accounts active logged on September 14.

New Contracts and Active Contracts

Smart contracts built on the NEAR blockchain are programs that automatically execute when certain parameters are met. By examining the Daily Number of New Contracts created, the community can get a better sense of how healthy the ecosystem is and its growth as well. 

The more new smart contracts are being actively executed, the more projects and users are engaging with NEAR. There was a substantial increase in the number of daily new contracts to end the week, climbing from 28 on the 17th to 46 by the 21st. This high of the last 7 days  was 63 on the 16th, and the low was 26 on December 18th.

Daily Number of Active Contracts measures contracts that were executed within a 24-hour time span. This ranged from a high of 797 on December 15th to a low of 535 on the 18th. These numbers are still well above the beginning of the year, where there were roughly between 200 to 400 daily active contracts.

Used Gas and Gas Fee

Gas Fees are the costs associated with conducting transactions on the NEAR network and blockchain. Validators for the network are compensated using Gas Fees for their services, incentivizing validators needed to secure the network.

Over the last week, Used Gas on the NEAR network (or PetaGas) declined slightly from 7,489 on the 15th, ending the week at 6,226. This is fairly consistent with the entire month of December, indicating that individuals are on the network and transacting regularly. 

During this past week, there has been a slight drop in the Gas Fee, which correlates with a drop in Used Gas. On December 18th, the Gas Fee was measured at 570, before peaking to 676 the following day. The rest of this week has hovered around 622. 

Daily Transactions

Finally, the Daily Number of Transactions shows how many times the blockchain logged a transaction over the past week. This week’s figures indicate a slight decrease from 454,757 on the 16th of December to 332,708 on the 21st. 

These reports are generated every week and published on Friday.

In this second NEAR Foundation Transparency Report covering Q3 of 2022, the Foundation aims to deliver on its commitment to  consistent and frequent communication with the NEAR community. 

This transparency report is one of NEAR Foundation’s vital contributions to the NEAR ecosystem’s long-term health and viability.

NEAR Foundation Mission and Purpose

NEAR’s mission is to:

Remove every barrier for Web3 creators, by creating an ecosystem that is uniquely simple, safe, scalable, and sustainable.

The Foundation’s purpose is the promotion and development of new technologies and applications, especially in the fields of open and decentralized software architectures, to enable innovation that benefits people around the world. This includes but is not limited to promoting and developing NEAR Protocol and related technologies, as well as promoting and supporting decentralized applications running on the NEAR Protocol.

To deliver on its purpose, the Foundation is organized around 3 core areas of focus: awareness, support, and governance.

Below, the Foundation shares details of how it allocated funding in Q3 of 2022. This includes the rationale informing these decisions as well as insight into future plans as the ecosystem heads into 2023 and beyond.

Core Metrics

• The number of accounts on the NEAR Protocol grew from 15.6 million at the end of Q2 to over 20.6 million accounts at the end of Q3. 
• Weekly Active Wallets surged to 280k per week — up from 26k at the end of Q2.
• The number of weekly active developers held flat at 1.1k during this period.

Total and Circulating Supply

As of the end of Q3, NEAR’s total supply increased to 1.1b NEAR. This is up 14m compared to  the end of Q2 due to inflation and fewer transaction fees burned. 

90% of the 5% annual inflation is sent to Validators to be paid out as staking rewards, with the residual 10% returned to the NEAR Foundation Treasury.

Circulating supply increased 74m NEAR to 798m (73% of total supply) due to further unlocks in both the NEAR Foundation Treasury and contractual vesting schedules.

Ecosystem Holdings

At the end of Q3, 67% of total supply had been deployed to projects, partners, contributors, backers, and the broader ecosystem.

465m NEAR had been staked (42% of total supply), representing 62% of all NEAR owned by the ecosystem.

126 validators supported the network, with 33% of total staked NEAR delegated to the 9 largest validators.

The NEAR Foundation Treasury

At the end of Q3, NEAR Foundation held fiat reserves of $450m and 358m NEAR. 

The Foundation has continued to adopt a highly responsible approach to treasury management in order to minimize the risk of loss in a turbulent market. Exposure to non-NEAR assets therefore has been limited, with fiat reserves held in AAA-rated Swiss  bank accounts. This strategy helps ensure that the Foundation maintains sufficient resources and runway even if the market downturn lasts for multiple years.. 

As a result, the Foundation is in an extremely strong position to continue to distribute funds to high-quality projects for the foreseeable future.

The NEAR Foundation in Q3

During Q3, NEAR Foundation continued to support high quality projects that will support our mission to onboard 1 billion users.

In total, the Foundation committed $39M during Q3, further contributing to our Q1’21 commitment of  an $800 million ecosystem fund. 

The $800m ecosystem fund is split into four broad groups:

• $350M – Proximity DeFi Grants – to help projects in the space of financial innovation within the NEAR ecosystem. (Proximity will be publishing its own transparency report on December 21, 2022.) 
• $100M – Startup Funds – to decentralize capital deployment into dedicated investment funds within the ecosystem.
• $250M – Foundation Grants – to support projects building on NEAR through direct investment and grants.
• $100M – Regional Funds – to establish physical hubs in key regions around the world to provide a local presence. 

Funds Distributed So Far from $800m Ecosystem Fund (to Partners):

Below, the Foundation shares details of how it allocated funding as of Q3 of 2022. This includes both the rationale for these decisions and insight into future plans.

Startup Funds

Allocation: $100 million 

Committed: $28 million

Committed in Q3: $10 million 

NEAR Foundation believes that it should not be the sole distributor of capital to developers and entrepreneurs within the NEAR ecosystem. As necessary as the Foundation is to NEAR’s growth, decisions should not be made in a vacuum through a single centralized organization. 

To help decentralize NEAR, the Foundation has in turn decentralized capital deployment. The Foundation has allocated grant funds to MetaWeb, MOVE Capital, Stealth Capital, and Open Web Collective, each of which is focused on funding projects within the NEAR ecosystem according to their own vision. 

So far, the Foundation has committed $28 million to the existing funds. Specific updates from each fund are listed below:

• MetaWeb, a NEAR-native investment fund, has raised $30m from Sequoia, in addition to NF. MetaWeb has deployed over $11m across 36 investments to date, including Niche, Orderly, Above.Land, and Sender Wallet.

• MOVE Capital is a NEAR-native investment fund that has raised $13m from Accomplice and DCG, in addition to NF. MOVE has made 20 investments to date totalling over $7m, including Tonic, Calimero, Few & Far, and Sweatcoin.
• Stealth Capital is an investment fund for founders, and brings a wealth of experience supporting the development of projects on Solana and Polygon, as well as NEAR. Stealth had deployed $6m by the end of Q3.
• Open Web Collective is a blockchain accelerator and investor backing the builders of the multi-chain, decentralized web. Open Web Collective’s approach to supporting founders is hands-on, user-centric, and analytical.​

Foundation Grants 

Allocation: $250 million 

Committed: $159 million

Committed in Q3: $26 million 

Foundation Grants cover a broad range of investments from grant allocation to direct investment. Grants are primarily focused on the following verticals: Infrastructure & Integrations, Gaming & Entertainment, NFTs, and DAOs.

The Foundation has specific strategies for each vertical and has deployed capital across all of them.

• Infrastructure and Integrations – “Infrastructure” is a catch-all term for key ecosystem partnerships, integrations, and technologies that support access to mainnet and successful development on NEAR. These key components include: frictionless onboarding solutions, wallets, bridges, oracles, custodians, zero-knowledge technologies, privacy tools, and improved tooling for developers. Integrations with the NEAR network are laying the groundwork for the next phase of the community’s growth, which is bringing more users from Web2 into Web3 — what the Foundation calls Web 2.5. The following partnerships have been instrumental in making progress towards this initiative.
  • Key projects: Aurora, Pagoda, Calimero, Switchboard, Octopus, Brave, Coinbase, BitGo, Fireblocks, USDT, USDC, Token Terminal, OnMachina, Keypom
• Gaming / Entertainment – The Web3 gaming space is still wide open and rapidly evolving. The first wave of Web3 games proved that there was consumer demand for blockchain-based gaming. Right now, there is a great deal of room for experimentation, iterating on long-term sustainable models, introducing permissionless composability, and creating new forms of NFTs as well as games that are partially or even fully on-chain.
  • Key projects: Armored Kingdom, SWEAT, Endlesss, Niche, playEmber, eFuse
• NFTs –  NFTs on NEAR present a massive opportunity, in which NEAR’s flexible infrastructure and focus on usability are ideal for many NFT use cases, especially those focused on utility. With its strong position in the Web3 space, NEAR has the potential to become a leader in fostering sustainable and innovative NFT use cases that provide lasting value for all participants.
  • Key projects: Few & Far, Paras, Mintbase, Satori, Apollo42, Tradeport, Bee NFT/Beexperience, Tamago
• DAOs – The Foundation believes NEAR has the strongest no-code, easy to use DAO tech stack in Web3 and sees DAOs as key enablers of decentralization. NEAR is helping communities govern their treasuries and activities in a completely decentralized way, with the help of our DAO stack.  We will continue to facilitate DAO use cases in investments, NFTs, gaming, sustainability, science, and beyond.
  • Key projects: AstroDAO, SailGP, Unchain Fund , Flamingo DAO, Breeder DAO

In Q3, NEAR Foundation distributed a further $26 million to over 100 projects, including Mintbase, Circle, Satori, Clear Street, and OnMachina, as well as to Caerus to set up an Entertainment Venture Studio.

Regional Hubs 

Allocation: $100 million 

Committed: $36 million 

Committed in Q3: $3m – Banyan (US Hub), Balkans 

As part of NEAR’s goal of  reaching a billion people, the Foundation has been actively helping NEAR community projects launch hubs across the globe. To be global, we must first be local — and that means connecting with people where they are and empowering them to build Web3 projects that address their own communities and needs. NEAR Hubs host local events in local languages to find the best people and projects and to forge partnerships with local organizations.

To date, NEAR Foundation has launched seven regional hubs. An extension for the Balkans Hub and the launch of the US hub were announced in Q3: 

• Ukraine Hub (winding down as of Q4 2022) 

• Kenya Hub (Sankore) 
• Balkans Hub
• Vietnam Hub
• India Hub
• South Korea Hub
• US Hub 

The Foundation chose these locations based on a variety of factors, including Web3 adoption, number of developers, regulatory environments, and available capital.

NEAR Digital Collective Update

Early in Q3 (July), NEAR announced the NEAR Digital Collective (NDC) — a pioneering effort in decentralizing ecosystem governance and funding. Through the NDC DAO, high-level decisions will be made on protocol and ecosystem development through a “fund-of-funds” structure, where working groups, projects, and ecosystem funds will build communities and invest in specific regions and verticals. NEAR sees the NDC as a potential model approach across Web3 for the creation and implementation of truly decentralized, on-chain governance.

During Q3, following a positive community response, a Governance Working Group was formed to take the next steps to launch and implement the NDC. They solicited applications for interested contributors to join the Governance Working Group. This working group is tasked with producing a detailed roadmap and key milestones for NEAR governance implementation, focusing on the following areas:

• NEAR Constitution – Creation and ratification of shared values and basic rights for all community members. NEAR ecosystem’s north star.
• Governance Framework & Proposal Process – Vision for a decentralized governance system & core governance components confirming structure, responsibilities, participation rules, and dispute resolution process.
• Technical Governance Development Plan – On-chain practical implementation of the governance framework.
• Legal Framework – Legal structure for the governance structure to ensure sustainability, risk mitigation, and true community ownership.
• Community Engagement Guidelines – Standards to encourage positive, sustainable community behavior and interaction consistent with the values of the NEAR Constitution.

Through Q3, the Governance Working Group has been working on a draft of a NEAR Constitution, a Legal Framework  for governance structure, and a Code of Conduct. Follow along for the latest from the NDC, including weekly updates.

The Road Ahead

NEAR remains committed to its mission to:

Remove every barrier for Web3 creators, by creating an ecosystem that is uniquely simple, safe, scalable and sustainable.

The Foundation will continue to support the ecosystem, drive awareness to NEAR and Web3, and — now more than ever — educate regulators across the globe.

We will continue to invest and deploy capital in the key verticals mentioned above: Infrastructure, Integrations, Gaming/Entertainment, NFTs, DeFi, and DAOs.

In addition, the Foundation will continue to decentralize and deploy capital into additional ecosystem funds and regional hubs that are dedicated to the ongoing health of the NEAR ecosystem.

For any questions or feedback, please reach out to [email protected].

All of these efforts are to allow you to create without limits. 

We believe in a world where creativity is no longer held back by technology.

A world without limits.

Thank you!

The recent stream of news clearly demonstrates that the world needs Web3. Trust in legacy institutions is breaking down, individual privacy and individual freedom are equally at risk, and the major Web2 platforms we use every day have become monopolies that focus on profit, not people. 

Yet Web3 also hasn’t fully delivered on its promise to open the web. While important progress has been made, much more needs to be done for this technology to deliver fairer, freer digital systems. Today’s Web3 suffers from inaccessible user experience, siloed applications which are difficult to discover, few real-world use cases, and technology tribalism. Put simply, too much hype and not enough value for users. 

Since 2018, NEAR has focused on building scalable, secure technology and infrastructure that is easy to use and enables developers to freely create usable applications. Since launching Mainnet in late 2020, the NEAR ecosystem has made incredible progress, becoming one of the top layer-one blockchains with 22 million accounts, 600K monthly active wallets (active defined as 2+ transactions), and 15x growth in users and projects just in the last year. And despite chaos in the market and a major downturn in recent months, NEAR Foundation has sufficient capital to sustain at least five years of operations in bear market conditions thanks to responsible treasury management. 

While Web3 has yet to deliver on its promises, NEAR Foundation believes that NEAR is the only ecosystem where Web3 promises can be delivered and where mainstream adoption can happen. All the fundamentals have been established for some time and NEAR is charging full-speed ahead into its next growth phase in 2023. This post will cover NEAR’s convictions heading into next year, the strategic approach to drive our next phase, and a look ahead at new areas of product and development. 

Fundamentals and Convictions

• NEAR has the best technology in Web3. Provably scalable, easy to onboard and use, developer friendly, secure, and decentralized, with the most advanced account model and onboarding in the blockchain space. 
• NEAR has world-class talent and ample runway. From the core teams at the Foundation and Pagoda, to the incredible NEAR Foundation Council and advisors, to the diverse group of brilliant entrepreneurs building companies, apps, and funds on NEAR, some of the best talent in the world is here on NEAR. And thanks to the Foundation’s responsible treasury management, core ecosystem operations and funding are well-positioned to run for many years to come. 
• Achieving mainstream adoption is about users. Not TVL, not flashy headlines, not cultish maximalism. NEAR focuses on what matters for the long term and the bear market will separate the high quality projects from the ones fueled mostly by hype. 
• Web 2.5 will get us there. Sweatcoin proved that NEAR can support an app with tens of millions of users on open web infrastructure. This is the next phase of adoption: helping another generation of Web2 apps and communities take advantage of the opportunities Web3 offers while providing a richer, more sustainable experience to their users. 

Strategic Approach

Enabling NEAR to make the most of these convictions in today’s climate means committing to the following goals over the next year. 

Growing usage on NEAR will begin with a top-down approach focused on partnerships. The world-class business development team at the Foundation will focus on working with major applications and brands with substantial, established communities to partner with NEAR on real use cases that drive engagement, such as ticketing and earning. High-traction focus verticals include sports, entertainment, and loyalty. Major partnerships in recent months include Grupo Nutresa, Google Cloud, and Sweat Economy. 

Any great Web3 ecosystem is an emergent product of a dedicated community of believers. The bottom-up, grassroots approach for the next year on NEAR will empower the community to invest in its own expansion through grants, primarily through 3 major community DAOs: Developer DAO, Marketing DAO, and Creatives DAO (visit the DAO websites to get involved). This means the NEAR Foundation will no longer directly allocate capital to projects, instead supporting the community in these decisions and further decentralizing key elements of the ecosystem. These grassroots DAOs will be supported by the NDC, which has achieved initial traction, including launching a new Governance Working Group and plans to roll out a v1 governance infrastructure for the ecosystem early next year.

In the new year, the NEAR Foundation will form an early-stage accelerator that will provide support to promising projects and founders on NEAR in areas including education, tech, hiring, legal, UX, and GTM guidance, setting them up to grow into the landmark Web3 projects of tomorrow. 

Looking Ahead 

With NEAR’s protocol, infrastructure, and developer tooling already well established, the next step in providing the best user experience to Web3 will be at the discovery layer: the connective tissue that connects applications, tooling, social, earning, and developer components across the open web. This stack is what we call a “blockchain operating system.”

Many of the building blocks of the blockchain operating system already exist on NEAR, either as features or apps. These include NEAR Crowd, a gig economy platform with 50% of users transacting every day, and NEAR Social, an on-chain social network with a widget framework that lets developers fork entire app frontends to build new experiences. Combined with upcoming improvements to onboarding, including from EVM wallets (which we’re calling remote accounts), native meta transactions, Keypom, and new chat/social capabilities, NEAR will deliver even more amazing value directly to developers and users. 

All of these user-centric elements further up the stack, particularly at the app layer, will form the basis for a core component of the NEAR ecosystem’s product and technical focus in 2023. Pagoda, NEAR Foundation, and other key ecosystem participants will work together to deliver the best possible technology with an increasingly integrated and seamless experience for developers and end users. The goal from here is evolving NEAR to be more than just a layer-one blockchain: it will become a global blockchain operating system. It’s still early days, but building is underway and the vision is clear. 

NEAR is Now 

NEAR is the place where mainstream adoption of the open web will happen. Soon, anyone in the world—app users, developers, founders, creators—will be able to create without limits.

Thank you for reading our NEAR 2023 Strategy Blog Post and/or participating in the NEAR Go Forward Strategy Twitter AMA! If you have questions or comments we would love to hear them!