2-2. Key metrics

3. On-chain Performance

3-1. Performance

NEAR reported Q4 revenue of $0.78M (QoQ +671%) and net income of -$21.6M (QoQ -19%). Revenue growth reflects higher fee revenue due to increased number of transactions since September and the spike on December 1. The loss continued from the burden of token incentives and developer incentives. While NEAR have been in the red every quarter, it is positive to note that the revenue is growing.

*Token incentive costs are defined as the cost of newly minted tokens to validate blocks on the network or that paid to validators from the reward pool.

*Developer incentives are defined as fees paid to smart contracts developers

3-2. Network activity

NEAR's daily transaction count remained largely unchanged until Q2 but has been trending upwards since Q3. In particular, Q4 saw an average of 2.38M daily transactions, a 205% increase from the previous quarter. This surge was driven by the success of inscriptions, which inscribe data into tokens, in late November. On December 1, the most active transaction day from inscriptions, NEAR reached 15.62M transactions.

The number of daily active wallets also remained largely unchanged until Q2 but has seen a significant spike since the end of August. In particular, the average daily active wallet count in Q4 was 854K, a 225% increase from the previous quarter. It's worth noting that November 30th saw the highest transaction volume ever recorded with only 176k active wallets, which accounts for only 20% of the average of 4Q. This indicates that a high volume of transactions occurred in a small number of wallets.

NEAR's TVL continued to decline until the third quarter, but then saw a significant increase in Q4. This can be attributed to the success of inscriptions at the end of November and the activity on NEAR’s DeFi ecosystem since October. Currently, NEAR's TVL is mostly deposited in liquidity staking protocols META, LiNEAR, and the lending protocol Burrow.

3-3. Network security

NEAR currently has a total of 209 validators, and the top 9 hold 32.3% of the staked $NEAR. There are currently 564.4M $NEAR staked on NEAR, representing 48.3% of the total supply.

3-4. Development activity

Development activity on NEAR's network appears to be picking up from Q4. The number of smart contracts deployed in Q4 of 2023 totaled 1,648, up 45.9% from 1,136 in the previous quarter. While it is true that development activity has slowed down compared to the last first and second quarters, we can see that it is picking up in Q4.

4. Major Events, Partnerships & BOS Updates

4-1. Major events

The NEAR Foundation released the NEAR Data Availability (NEAR DA) layer. As part of the NEAR Open Web Stack, NEAR DA serves as a cost-effective data availability layer for Ethereum rollups and Ethereum developers. NEAR DA will contribute to the expansion of the NEAR Open Web Stack while paving the way for modular blockchain development for developers. The benefits of NEAR DA include the following:

• According to the Foundation, as of September 2023, the cost Near’s 100kB calldata is $0.0033. This is approximately 8,000 times less than the cost of calldata on Ethereum L1, which is $26.22.
• NEAR DA helps improve the cost and reliability of rollups and contributes to the security of Ethereum.
• Providing a data availability layer to Ethereum rollups highlights NEAR's technical diversity while bringing founders across Web3 one step closer to mainstream adoption of the open web.

LayerZero

NEAR's collaboration with LayerZero, a trustless omnichain messaging protocol, brings enhanced interoperability to the ecosystem. The collaboration with LayerZero means the following:

• NEAR and Aurora projects and developers can now utilize LayerZero's 40+ supported blockchain networks.
• Projects on the LayerZero chain, such as StargateFinance or RDNTCapital, can easily scale to NEAR.
• NEAR users will be able to use dApps like Ref, Orderly, and Burrow to enable seamless cross-chain transactions with native assets without bridges.

Pyth Price Feed

Pyth, the largest provider of real-time market data for cryptocurrencies, stocks, forex, and commodities on more than 40 blockchains, has launched a price feed service on the NEAR protocol. Previously, Pyth deployed feeds to Aurora, an EVM chain built on NEAR, but this collaboration makes Pyth data feeds fully compatible with the NEAR protocol. This will provide DeFi ecosystems built on NEAR with data feeds that update every 300ms. It also provides developers with accurate real-time data feeds, bridging the gap between the physical and digital worlds while enabling users to utilize informed decentralized applications.

Coin98 decentralized dApp store launch

Coin98, a multi-chain wallet and DeFi platform project, has launched a decentralized Dapp store on top of NEAR's Blockchain Operating System (B.O.S). With NEAR BOS, Coin98 has significantly streamlined the development process to rapidly scale and integrate new applications. The web and mobile apps now offer a single interface to 70+ chains and 15,000+ dApps, cross-chain bridging, money markets, and decentralized exchanges.

Sweat Economy enters U.S. market

Sweat Economy, NEAR's flagship dApp and Web3 health and fitness app, announced its launch in the United States in October. This expansion into new territory was decided by an on-chain vote of the Sweat Economy community, with over 380,000 community members participating in the decision. Going forward, millions of users in the US, Bahamas, Barbados, Botswana, Ghana, Jamaica, Pakistan, Zimbabwe, and Uganda will be able to tokenize their physical activity within the Sweat Economy ecosystem.

4-2. Partnerships

Eigen Labs

NEAR announced a collaboration with Eigen Layer, an Ethereum Layer 2 solution, to build the world's first fast finality layer. Together, they will reduce transaction times to 3-4 seconds and make transactions 4,000x cheaper, creating the perfect environment for teams looking to expand the Ethereum Layer 2 ecosystem.

Polygon Labs

At NEARCON in last November, Polygon Labs introduced the zkWasm prover research project, a new partnership project between NEAR and Polygon Labs that fuses Web Assembly (WASM) and zero-knowledge proofs. Polygon zkWASM is a technology for making blockchains more scalable and decentralized and will pave the way for better trustless interoperability on the open web, including the NEAR and Ethereum ecosystems. ZkWasm prover will also provide additional customization choices for developers leveraging the Polygon CDK, a collection of open-source software components that help design and launch L2s leveraging ZK technology on Ethereum.

SK Planet

At NEARCON in November, SK Telecom's Se-hyun Oh, VP and Head of Web3 CO of SKT, detailed the South Korean company's strategic move into the open web, highlighting its collaboration with the NEAR Foundation and plans for a Web3 wallet and NFT marketplace. SK Telecom's approach is to leverage its deep customer base to converge the digital and real world, from art NFTs to metaverse development, with a focus on community building through education and blockchain integration. SK has announced that it will be utilizing NEAR's BOS.

Berklee College of Music

Berklee College of Music announced plans to collaborate with NEAR to build a music licensing platform. Leveraging NEAR's user-friendly tech stack, it aims to build a marketplace where musicians can upload their music and creators can license music from students of the world-class music school. The platform, which will launch as an app called "RAIDAR," will be a decentralized repository that will allow creators' rights to be recorded on-chain.

International Cricket Council

The NEAR Foundation and the International Cricket Council (ICC) launched Captain's Call, a Web3 gaming app, as part of a series of ways to bring fans closer to their favorite teams and players. Utilizing the infinite scalability of NEAR, fans can strategize on bowling, batting, and fielding during live cricket matches.

4-3. BOS updates

FastAuth SDK beta release

One of the major roadmap milestones for NEAR BOS in Q4 is the beta release of the FastAuth SDK. FastAuth is a component that provides a simple and straightforward onboarding experience when using Web3 protocols. It allows users to sign up with just their email accounts and eliminates the need to store seed phrases or passwords. The FastAuth SDK makes it easier for developers to deliver enhanced dApp experiences, minimize user pain points, and increase new user conversion rates with Web3.

Web push notifications feature release

to deliver event push notifications through users' favorite apps on their computers and mobile phones. With real-time notifications, users will receive instant updates and information about account activity across multiple channels. This will help with one of the biggest challenges facing Web3 builders: re-engaging and retaining users.

NEAR Query API beta release

NEAR announced the official opening of the NEAR Query API beta. The NEAR Query API is a fully managed, serverless infrastructure that provides the NEAR blockchain #Indexer, storage, and GraphQL endpoints. This greatly simplifies the process of applying blockchain data and enables developers to create BOS applications with a great user experience without having to manage any infrastructure.

5. Recap