NEAR Protocol (NEAR)

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Field

Content

General information

S.1

CASP Name

BB TRADE ESTONIA OÜ

S.2

Relevant legal entity identifier

984500L05A5D0E66Q610

S.3

Blockchain network name

Near

S.4

Name of the crypto-asset

NEAR

S.5

Consensus Mechanism

Proof of Stake (PoS) with Doomslug block finality and Nightshade sharding

S.6

Incentive Mechanisms and Applicable Fees

NEAR Protocol operates on a Proof of Stake (PoS) consensus mechanism with a unique dynamic sharding design called Nightshade. Transactions are processed in parallel across shards, enabling high throughput. 

Incentives:

Validators: Secure the network by staking NEAR tokens. They are responsible for processing transactions and maintaining shards. Validators are selected based on their staked amount and a quadratic sharding mechanism designed to prevent centralization. Validators earn rewards in NEAR for successfully proposing and validating blocks. These rewards come from network inflation (newly minted NEAR) and a portion of transaction fees.

Delegators: NEAR token holders can delegate their tokens to validators, contributing to their voting power and sharing in staking rewards (minus a commission fee). This encourages broad participation in network security.

Slashing: Validators face penalties (slashing) for malicious behavior (e.g., double-signing) or prolonged downtime, ensuring accountability.

Fees: Transaction fees on NEAR are paid in NEAR tokens. A significant portion of these fees (e.g., 70%) is burned, creating a deflationary pressure on the token supply. The remaining portion (e.g., 30%) goes to smart contract developers as a form of royalty/reward, incentivizing dApp development. Transaction fees are generally very low due to the network's high throughput and efficiency.

S.7

Beginning of the period to which the disclosure relates

2024-01-01

S.8

End of the period to which the disclosure relates

2024-12-31

Mandatory key indicator on energy consumption

S.9

Energy consumption

~60,000 kWh per calendar year

S.10

Energy consumption sources and methodologies

The energy consumption of the NEAR Protocol network is predominantly from the electricity used by its validator nodes and supporting infrastructure (e.g., relay nodes) across its sharded architecture. As a PoS network, it entirely avoids energy-intensive mining. Methodologies for estimation, often guided by partnerships with sustainability experts (like South Pole for the NEAR Foundation), involve:

Hardware analysis: Estimating the power consumption of typical validator and relay nodes.

Network-wide aggregation: Scaling these estimates by the number of active nodes and their operational uptime, taking into account the sharding design.

NEAR's Nightshade sharding and Doomslug finality are designed to be computationally light, contributing to its very low energy footprint.

Supplementary key indicators on energy and GHG emissions

S.11

Renewable energy consumption

~100%

S.12

Energy intensity 

~0.000328 kWh per transaction

S.13

Scope 1 DLT GHG emissions – Controlled

0 t CO2eq per calendar year

S.14

Scope 2 DLT GHG emissions – Purchased

~28.5 t CO2eq per calendar year

S.15

GHG intensity 

~0.00000 kg CO2eq per transaction

S.16

Key energy sources and methodologies

The energy sources for NEAR Protocol's validator nodes reflect the diverse electricity grid mixes of their global distribution. These include a combination of conventional sources (e.g., natural gas, coal) and renewable/sustainable sources (e.g., hydro, solar, wind, nuclear), depending on the geographic location of the validator operators. Methodologies for assessing this, often guided by sustainability partners, involve: 

Comprehensive Footprint Assessment: Rigorously calculating the total energy consumption of the network's operations. 

Offsetting Strategy: Actively engaging in verified carbon offsetting programs (e.g., purchasing carbon credits) to neutralize the network's carbon emissions. This commitment aligns with their goal of minimizing environmental impact.

S.17

Key GHG sources and methodologies

The predominant source of Greenhouse Gas (GHG) emissions for NEAR Protocol is Scope 2 (indirect emissions from purchased electricity). Methodologies for estimating these emissions involve:

Energy consumption * Emission Factor: Multiplying the estimated total electricity consumption of the NEAR Protocol network (S.8) by the carbon intensity (grams of CO2 equivalent per kWh) of the electricity mix where its nodes operate.

Carbon Neutrality Commitment: NEAR Protocol's unique approach involves an active partnership (e.g., with South Pole) to measure its comprehensive footprint and then automatically purchase carbon credits equivalent to its emissions. This proactive environmental stewardship means that while the network consumes energy, its net carbon footprint is neutralized.