Introduction
For a brief introduction, I am David; Co-Founder of Jump DeFi and @NEKO and co-host of NEAR at Night Twitter Spaces. In addition to building on NEAR, I do my best to be an involved member of the NEAR community.
Today’s AMA was a great start towards identifying problems that exist in the arena of the NEAR Foundation from the community’s perspective. As this was the start to a meaningful conversation, it is expected that more work is needed to determine actionable solutions to the problems identified.
This post is intended to further expand on the problems brought up in the AMA, and begin identifying solutions with help from the NEAR community and NEAR core team. I have aggregated feedback from several members of the NEAR community as well as my own insights in this post.
NF Grant Funding Framework
The impact of support from the NEAR Foundation goes far beyond the monetary value of grants received. In most cases, backing from the NEAR Foundation is a prerequisite for NEAR native projects to receive funding from VCs and other ecosystem entities. This support funnel could work great, assuming the grants are issued from a non-biased perspective.
A set of metrics should drive whether or not projects are supported. The community can do a fantastic job at fleshing out the impactful projects as well… That is what "the ecosystem ultimately decides who gets funding” means, right? The goal of the NEAR Growth Fund is to facilitate ecosystem growth, not to pick winners. It is critical that distribution of grant funding from the NEAR Foundation is perceived as fair from the community. Especially when potential conflicts of interest exist such as investment in projects from NEAR based entities and key NEAR stakeholders.
The NEAR Foundation is making their job too hard if they put themselves in charge of picking winners and losers in the ecosystem. Instead, key metrics can be assigned for projects contributing to NEAR ecosystem growth. If these metrics are met, then milestone based grant funding shouldn’t be a question of if, but when.
Goal of 1 Billion NEAR Users in 5 Years vs Reality Now
The goal is for NEAR Protocol to reach 1 Billion users. However, if the projects dedicated to bringing in the first 100K daily active users now are not being supported, the goal of 1 Billion will never be achieved.
We all know NEAR has great tech, but assuming other chains don’t stand still and additional innovation happens, won’t web2 businesses be more inclined to use chains/applications that are already attractive to existing users? It seems as though NEAR is ignoring the elements of Crypto (NFTs and DeFi) that brought people here in the first place.
What steps can be implemented in the near term to ensure projects that are here now, dedicating their time and careers to build out the NEAR ecosystem, are supported in these early stages?
USN Protection Program - $40m Backstop from NF
On 10/24 the NEAR Foundation published an article announcing the USN Protection Program to backstop the USN stable-coin which had become undercollateralized. The article noted Decentral Bank (DCB) “recently contacted NEAR foundation to advise USN had become undercollateralized.”
The message the community received during NEARCON is everything regarding USN was on plan. It is very concerning that an oversight of this scale could be ongoing for months. The community is seeking more transparency on the USN failure. In today’s AMA, it was noted that 10,000 users were affected by the USN under-collateralization failure. Of these 10,000 users, what percentage of the funds were held by key NEAR stakeholders? This could be seen as $40m in USDT going from the NEAR Foundation to insiders.
The failure of USN has a very negative impact on the NEAR DeFi ecosystem. What reparations, if any, are planned to ecosystem projects most affected by the USN failure. The USN Protection Program statement notes “there is approximately $5.7m NEAR in the DCB treasury which the Foundation expects DCB to donate to the NEAR community.” How, and when, will this NEAR be distributed to help offset the damages caused?
Conclusion
The fact we can have this dialogue in the first place makes me proud to be a NEAR community member. The post is not intended to cast blame or complain about the issues presented. The goal is to continue the discourse that was started in today’s AMA, to achieve actionable solutions as quickly as possible. I look forward to hearing responses from the rest of you big brains in the NEAR family 