NEAR Protocol: A Bullish Breakout on the Horizon? On-Chain Metrics and Adoption Trends Signal Renewed Optimism

The NEAR Protocol (NEAR) has long been a polarizing figure in the Layer 1 (L1) blockchain space, oscillating between technical innovation and market skepticism. However, a closer look at Q2 and Q3 2025 on-chain metrics reveals a compelling narrative of resilience and growth. While Q1 data painted a mixed picture-marked by declining new addresses and DeFi Total Value Locked (TVL)-the subsequent quarters have shown a sharp reversal in key adoption and performance indicators. This article unpacks the on-chain patterns and network dynamics that suggest NEAR is primed for a bullish breakout.

Technical Upgrades: The Foundation for Scalability

NEAR's Nightshade 2.0 upgrade, implemented in Q1 2025, reduced block times to 600 milliseconds and finality to 1.2 seconds, while expanding the network's sharding capacity from six to nine shards by Q3, according to Messari's State of NEAR Q1 25. These improvements directly correlate with the protocol's ability to handle 450 million transactions in Q2 and 52 million monthly active addresses in Q3, as highlighted in a Coinotag analysis. The 12.5% throughput increase from sharding expansion, as that analysis notes, positions NEAR as a viable alternative to Ethereum and Solana for high-throughput applications, particularly in AI-native and decentralized finance (DeFi) use cases.

User Adoption: A Q2/Q3 Surge in Activity

The most striking on-chain trend is the explosive growth in user engagement. Q2 2025 saw 12.3 million unique addresses, per the Messari report, a 220% increase from Q1's 3.8 million daily active returning addresses reported earlier. By Q3, monthly active addresses surpassed 52 million, according to the Coinotag analysis, outpacing Ethereum and Solana. This surge is not merely quantitative but qualitative: NEAR's daily active addresses (2.9 million in Q3, per the Coinotag analysis) reflect sustained engagement rather than one-time transactions. The network's ability to attract and retain users-despite a 48.8% QoQ price drop noted in the Messari report-suggests strong utility-driven adoption.

Liquidity Trends: DEX Volume and Stablecoin Flows

While NEAR's DeFi TVL contracted 36.8% QoQ to $155.9 million, as the Messari report documents, its decentralized exchange (DEX) volume surged 101.1% to $17 million. The broader DeFi landscape in Q3 2025 saw global TVL reach $123.6 billion, according to CoinLive's DEX Data Analysis in 2025, with Ethereum dominating 63% of the market. NEAR's DEX volume, though modest, aligns with a broader trend of DEXs processing $10.3 trillion in Q3 2025, indicating growing institutional and retail interest in decentralized trading.

Stablecoin flows further reinforce this narrative. NEAR's stablecoin market cap grew 2.0% QoQ to $697.2 million, per the Messari report, while global stablecoin supply expanded by $45 billion in Q3 2025, according to the CoinLive analysis. USDT's overtaking of USDC in DEX volume, also noted in the CoinLive piece, signals a shift toward stablecoin liquidity on decentralized platforms-a trend NEAR is well-positioned to capitalize on given its low fees and AI infrastructure focus.

Developer Activity: A Cautionary Note

Despite user-side optimism, developer activity remains a concern. Weekly active core and ecosystem developers declined by 27.7% and 42.4% QoQ, respectively, as the Messari report highlights. However, NEAR's strategic pivot toward AI infrastructure-partnering with Cardano and investing in developer tooling, per earlier coverage-could mitigate this risk. The protocol's emphasis on AI-native applications (for example, Rhea Finance's 95.2% DeFi TVL share documented by Messari) suggests a long-term play to capture the AI + blockchain convergence, a sector projected to grow exponentially in 2026.

Market Positioning: NEAR's Unique Value Proposition

NEAR's bullish case hinges on its dual focus on scalability and AI. The Nightshade 2.0 upgrade and sharding expansion address throughput limitations, while partnerships with AI-focused ecosystems position it as a "blockchain for AI." This niche differentiates NEAR from crowded L1s like Ethereum and Solana, offering a clear value proposition for developers and users prioritizing AI integration.

Conclusion: A Breakout Candidate in a Fragmented Market

NEAR's Q2/Q3 2025 performance demonstrates a compelling mix of technical execution, user adoption, and strategic positioning. While challenges like developer attrition and DeFi TVL contraction persist, the protocol's focus on AI infrastructure and low-cost, high-throughput transactions creates a strong foundation for a bullish breakout. For investors, the key is to monitor stablecoin inflows, DEX volume trends, and AI-related partnerships-metrics that could catalyze a re-rating of NEAR's value proposition in 2026.