# Near Protocol Token incentives Methodology

## 1. Overview

Token incentives are measured as the value of native assets distributed to Near Protocol validators. These incentives are issued to compensate supply-side stakeholders for securing the network and participating in the consensus process. Native issuance is tracked to represent the cost of incentivizing the network's validator set, analogous to stock-based compensation in traditional financial analysis.

## 2. Data sources

- **Blockchain events**: `validator_accounts_update` records and account change events for validator addresses, covering Near Protocol
- **External data**: End-of-day price feeds for the native NEAR asset

## 3. Step-by-step calculation

### Component A: Near Protocol validator reward extraction

- **Purpose**: Identify and isolate native rewards issued to network validators.
- **Logic**: Account change records are filtered to identify addresses associated with validators. Updates specifically categorized with a `validator_accounts_update` reason are isolated for analysis. For each chronological update per validator, the current staked balance is compared to the staked balance from the immediately preceding record. An increase in the staked balance during these specific update events is identified as a validator reward payment.
- **Key fields**: `staked_balance` (quantities), `update_reason` (event categorization)

### Component B: Normalization and USD conversion

- **Purpose**: Convert native reward quantities into a standardized USD value.
- **Logic**: Reward amounts are normalized by decimal precision. Daily reward totals are calculated by summing all identified reward payments within UTC day boundaries. These daily native totals are multiplied by end-of-day price feeds to determine the final USD value of token incentives.
- **Key fields**: `timestamp` (timing), `daily_reward_amount` (native quantities)

*This methodology was automatically generated by Token Terminal's methodology analyzer.*

Value of native tokens distributed as incentives.

Token incentives

Blockchains (L1)

Validators process transactions and receive validator rewards (supply-side fees).

NEAR Protocol is a smart contract platform for decentralized applications (a blockchain). NEAR Protocol was founded by Alexander Skidanov & Ilya Polosukhin and launched in 2017.

NEAR holders own and govern the protocol. They currently take (burn) all of the total transaction fees paid by users (revenue). NEAR Protocol's investors include a16z, Pantera Capital, Libertus, etc.