A new Messari report on the NEAR Layer 2 protocol reveals that the network has progressed toward greater decentralization as the number of daily active accounts reached an all-time high of approximately 64,000 in the first quarter of 2023.
According to the a reportNew accounts fell for the third consecutive quarter. Transaction volume slowed to 393,000, down 13% from Q4 2022.
Healthy USN coin volumes amid slowdown
NEAR is a so-called proof-of-stake threshold blockchain that can run decentralized applications. Originally conceived as a community-led cloud, it is secured by a group of validators who participate in the NEAR on-chain native token for the opportunity to validate transactions. The network determines transaction fees by the computing and bandwidth requirements of the network.
At the time of publication, the network has 200 validators.
Last year, the NEAR Foundation contributed $40 million to help finalize a NEAR stablecoin, the USN, issued by Decentral Bank.
Prior to that, Circle announced that it would be launching its own NEAR stablecoin to enable USDC fund flows on NEAR decentralized applications. Stablecoins are cryptocurrencies pegged to the value of a government-issued currency through on-chain or off-chain assets.
Circle’s USDC briefly lost its currency peg across several exchanges during mid-March as investor panic led to a wave of withdrawals from Silicon Valley Bank. The company maintains a cash reserve of $3.3 billion to support the USDC peg to the US dollar in the failed enterprise. Circle competitor Tether has started issuing its USDT stablecoin at NEAR in September 2022.
USN, USDC, and USDT are the three largest stablecoins on the network, with market caps of $37.99 million, $29.99 million, and $19.54 million.
Decentralization at NEAR and Arbitrum shifts power away from institutions
As of the first quarter of 2023, NEAR has about $316 million in its treasury. The NEAR Foundation will allocate funds to several internal decentralized independent organizations, including Marketing DAO, Developer Governance DAO, Creatives DAO, and NEAR Digital Collective.
The NEAR Digital Collective is a new governance body that uses the House of Merit to represent voters who propose changes to the network. A board of advisors will guide the direction of the House of Merit.
The recently launched Arbitrum DAO has highlighted the challenges of DAO governance.
Community members opposed Arbitrum’s decision to allocate 750 million ARB in grants to the foundation. A later proposal suggested more transparency of the tokens awarded to the institution’s “administrative budget portfolio”.
Another proposal, AIP-1.2, lowers the barrier to entry for those who wish to participate in the management of the Arbitrum DAO.
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