NEAR Protocol is a layer-one blockchain that aims to eliminate some of the scalability issues current blockchains face (e.g. low transaction speeds and low throughput) while also placing a strong focus on developing a very user-friendly interface.
Like many other blockchains, NEAR uses a delegated proof of stake mechanism.
In simple terms, this mechanism means that if you don’t have enough tokens to stake and become a validator (community of individuals who run the infrastructure that operates the network), you can delegate some of the network’s native token (in this case NEAR) to a validator. The validator will then stake your tokens on your behalf, and you’ll receive more of the same token as a reward.
Note that in the future, NEAR plans to incorporate stake farming contracts. What this means is that projects from the NEAR ecosystem (e.g. Aurora) can collaborate with validators to incorporate a project’s tokens into their staking rewards structure (i.e. delegators can get both NEAR and project tokens as rewards from staking).
To begin interacting with NEAR, you will need a NEAR wallet. The NEAR wallet is non-custodial, meaning that you have full control (and responsibility) over your assets.
Start by heading to https://wallet.near.org/ and clicking ‘create account’.
Next, you will need to select a security (i.e. recovery) method for your account.
Creating an Account with Ledger
Setting up your NEAR wallet with a Ledger hardware wallet is by far the most secure option. This device will ensure that your private keys never leave your Ledger, as is the case with any hardware wallet.
Next, you’ll need to install the NEAR app on your Ledger. This app is what enables your Ledger to use its private keys to interact with the particular blockchain network that your crypto assets belong to.
You can access the app catalogue page in the manager tab in the Ledger Live app. The NEAR app should appear when you type in ‘NEAR’ in the search bar. Click ‘install’.
Once the app has been installed, navigate back to your NEAR wallet.
Simply click on the ‘ledger hardware wallet’ option followed by ‘secure my account’. You’ll then be prompted to unlock and connect your ledger device to your. Once you have this done, click ‘continue’.
Creating an account using a Passphrase
If you don’t have a Ledger, the next best option is to set up your account via the passphrase option (the email option is the least secure, so it’s generally best to avoid it).
Once you select the ‘secure passphrase’ option and click ‘secure my account’, you’ll be presented with your 12-word security phrase.
NOTE: It’s incredibly important that you store a copy of this passphrase somewhere secure (i.e. offline). Take care to write down each word in the order that they appear on your screen. If you lose this passphrase / seed phrase, you lose access to your account. Similarly, if someone gets hold of this phrase, they’ll be able to access your wallet!
After this is done, click ‘continue’. On the following page, you’ll be asked to verify your passphrase.
Funding your account
Before you can even access your NEAR Wallet, you’ll need to fund it with at least 0.1 NEAR (although it’s better to deposit a bit more to allow for gas fees).
You have the option to buy NEAR with fiat directly via the third-party service providers MoonPay and UTORG. At the time of writing, the minimum spend on Moonpay is $30 (2.6 NEAR) and €19.85 (1.79 NEAR) on UTORG. You will also need to verify the transaction via your email.
NEAR is also available to purchase through several exchanges such as the ones below:
If you’re not familiar with any of these exchanges, then have a look at our Binance beginner’s tutorial that goes through everything you need to know!
NOTE: when withdrawing NEAR from a centralised exchange to your NEAR wallet, it is extremely important that you select the correct network (i.e. the NEAR protocol network).
Also, make sure that you enter your NEAR wallet’s public address (which you can find at the bottom of your wallet’s screen) as the recipient address.
Creating a custom address
Once you’ve some NEAR deposited, you’ll be presented with the option to create a custom address (i.e. a username).
This custom address replaces the need to use your long wallet address when sending/ receiving from your wallet, or when interacting with NEAR-ecosystem apps.
After this, you’re all set up!
Your wallet home screen should now look something like this.
To stake your NEAR, start by clicking on the staking tab at the top of the screen. Next, click ‘stake my tokens’.
On the following screen, you’ll see the list of validators you have to choose from. Here you’ll see some basic information for each validator, such as their commission fee (deducted from your staking rewards) as well as their activity status.
It goes without saying that the validator you stake with should be active and have zero downtime. The commission fee should also ideally be no more than 5%. As always, it’s important that you do your own detailed research into the validator you’d like to stake with.
Click here for more detail on all available NEAR validators. Once you’ve made your decision, click ‘select’ beside your chosen validator followed by ‘stake with validator.’
Next, enter the amount you want to stake (remember to leave some NEAR for gas, i.e. transaction fees).
Finally, click ‘submit stake’. You will then be prompted to approve the transaction. Once the transaction has been processed, you should receive a notification.
Your stake will start to generate rewards following the next epoch (occurs every 12-14 hours). Rewards are auto-compounded, meaning that NEAR will reinvest (i.e. stake) any rewards earned by default.
NEAR’s staking rewards rate is subject to change based on the total amount of NEAR tokens staked. The more tokens staked, the lower the rate and vice versa.
You can head to staking rewards.com to check the current reward rate.
Now when you click on the staking tab, you will be able to see the details of your staking position.
Unstaking / Claiming rewards
To switch to a different validator or claim rewards, you will need to ‘undelegate’ or unstake your tokens.
To do this, head to the staking tab and scroll down to the ‘your current validators’ section. Once you click on the validator you would like to unstake from; you’ll be directed to the validator’s summary page. Simply click ‘unstake’ to begin the unstaking process.
Unstaking can take up to 72 hours (4 full epochs) to process. Once processed, your tokens will appear in the ‘available for withdrawal’ section of your staking dashboard.
To withdraw your tokens from the validator’s account to your own account, simply click on the validator’s name again followed by the ‘withdraw’ button.
Disclaimer: THIS IS NOT FINANCIAL OR INVESTMENT ADVICE. Only you are responsible for any capital-related decisions you make and only you are accountable for the results.
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