In the second quarter of 2023, Near Protocol, a layer-one blockchain platform, experienced a significant decline in its treasury, which dropped to $900 million. This decline was primarily driven by a decrease in the price of Near tokens, reflecting the ongoing bear market in the cryptocurrency industry.
The Near Treasury composition as of July 10, 2023, consisted of $349 million in fiat currency, 315 million NEAR tokens, and $90 million in loans and investments. In Q2, a total of $16 million and 1 million NEAR tokens were distributed to the ecosystem. Comparatively, the Near Treasury had a value of $1.1 billion in Q1 2023.
The NEAR Foundation, responsible for managing the treasury, emphasized its commitment to transparent operations. They adopted a cautious strategy to mitigate risks associated with market volatility while deploying capital to fulfill their mission. The foundation limited its exposure to non-NEAR assets, maintaining fiat reserves in highly rated Swiss bank accounts.
Amid challenges faced by the crypto industry, including regulatory actions against major platforms like Binance and Coinbase, the Near Foundation adjusted its focus to three key strategies. These include enhancing its blockchain operating system, further developing its decentralized ecosystem, and onboarding Web2 users to Web3.
During Q2, the Near ecosystem witnessed 1.1 million monthly active accounts. Looking ahead to Q3, the Near team plans to prioritize partnerships and provide support to projects within the Near Horizon ecosystem. In the past, Near Protocol established an $800 million ecosystem fund in Q4 2021, allocated for decentralized finance grants, foundation grants, startup funds, and regional hubs.
Overall, the Near Protocol’s treasury decline in Q2 2023 reflects the challenges faced by the broader crypto market. Despite these market headwinds, the NEAR Foundation remains committed to responsible treasury management and the continued growth of its decentralized ecosystem.