NEAR Protocol, a decentralized application platform, that is designed to make applications usable on the web, just announced an $800 million funding initiative, which is intended to support the protocol’s ecosystem growth.
The announcement has caused NEAR, the native token of the NEAR protocol to rally by over 30% for the day, pushing the token to a new all-time high of $12.30, as of the time of writing this report. Its trading volume has jumped by approximately 200% within the last 24 hours and it is currently ranked #35 with a market capitalization of approximately $6.4 billion.
The high-speed and self-styled “climate neutral” chain, which runs on a Proof-of-Stake (PoS) consensus mechanism called Nightshade, has established the fund with major tranches earmarked for specific purposes which include, Decentralized Finance (DeFi), Startup Grant Pools, helping existing projects further develop and scale-up and regional funds.
Per the announcement, decentralized finance (DeFi) seems to be a focus of the program, with a devoted $350 million fund from Proximity Labs. This accounts for 43.75% of the total funds. $250 million is allocated for ecosystem grants geared towards helping existing projects further develop and scale. This will be distributed over four years and it accounts for 31.25% of the total fund size.
The remaining $200 million is allocated equally between startup grant pools and regional funds. These two together account for 25%. Accounting to the announcement, for the startup grant pools, “More than 20 startups will be identified and given $5M each in funding to redistribute to key stakeholders – the ecosystem ultimately decides who gets funding.” For regional funds, the announcement stated that the money will be allocated to, “foster the development of NEAR’s largest community regions in Asia, Europe, and the US.”
What they are saying
In an interview with CoinDesk, NEAR co-founder Illia Polosukhin explained that the program has already distributed $45 million in funds this year, with a particular focus on early-stage ecosystem building blocks.
He stated, “A lot of the projects so far have been infrastructure. Croncat allows the ability to send transactions at different times, Cartosis is testing smart contracts – so supporting new programming languages, supporting storage, so a lot of it was, ‘What are the building blocks we need to unlock exponential composability?”
He further added, “Before there was the feeling that you had to pull the ecosystem, but now the ecosystem is pulling you. Now it’s time for the DeFi money legos spawn.”
As Polosukhin said, prior to this announcement, NEAR had already spent $45 million across more than 120 projects, including Core Protocol Infrastructure Grants to the likes of Textile, Liquality, CronCat, Kurtosis and the Grain Programming Language.
NEAR is not the only protocol announcing ecosystem funds as Binance, Fantom, Harmony, Avalanche and Celo have all launched ecosystem development funds, with Binance offering the highest, to the tune of $1 billion.