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What are the main risks of using NEAR?

Using NEAR carries risks such as bugs in smart contracts, staking failures and bridge hacks, and US crypto markets lack most investor protections.

Vahe HakobyanEditor-in-chief Updated Oct 6, 20263 min readFact-checked

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What are the main risks of NEAR?How can staking on NEAR go wrong?Are bridges and wallets risky on NEAR?How do US rules treat NEAR?What is NEAR and who created it?FAQ

Short answer

The main risks of using NEAR are bugs in smart contracts, staking failures, bridge hacks and wallet scams. NEAR is a sharded blockchain for apps that its team describes as built for AI.

The NEAR token pays fees and can be staked to secure the chain. People use it to run apps and move assets between chains.

What are the main risks of NEAR?

Risks on NEAR come from code, validators, bridges and your own wallet. A bug in a smart contract can let an attacker drain funds, and an audit captures only one moment.

How can staking on NEAR go wrong?

NEAR uses proof of stake, so validators lock coins as collateral and take turns producing blocks. Holders can delegate to an operator rather than run a node, and staking has worked this way since the mainnet launched in 2020.

Offline validators miss blocks, so rewards stop.
Slashing burns staked coins when a rule is broken.
Unstaking takes time, so coins stay locked after you ask.

Are bridges and wallets risky on NEAR?

Bridges and wallet approvals are where many NEAR users lose coins. A bridge holds pooled deposits from two chains in one contract, and an approval lets an app spend your tokens.

One flaw in a bridge contract can drain the pool.
Approvals keep working long after you sign them.
Fake sites copy real apps and request draining approvals.

How do US rules treat NEAR?

The CFTC calls virtual currencies commodities under the Commodity Exchange Act. The IRS treats crypto as property, so buying NEAR with dollars is not taxable, while swapping or paying with it can create a gain.

Where US rules leave gaps
Area	What it means
Cash markets	Most virtual currency cash markets go unregulated.
Platforms	Some venues lack customer protections.

What is NEAR and who created it?

NEAR Protocol is a blockchain for decentralized apps that its team describes as built for AI. Sharding splits the chain into pieces that run in parallel, and Illia Polosukhin and Alexander Skidanov founded it, with the mainnet launching in 2020.

Frequently asked questions

Neither removes the core dangers, since both rely on smart contracts and bridges attackers have hit.

No. US deposit insurance covers banks, not crypto, and theft victims have no guaranteed path to their coins.

The CFTC advises checking that a platform or wallet is legitimate before you share sensitive details. Read the permissions it asks for.

No court has settled it. The SEC has handled token status through enforcement cases, not a published rule.

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Written byVahe HakobyanVahe Hakobyan is the editor-in-chief of World-Crypt. He covers bitcoin, markets and regulation, and leads the newsroom that fact-checks every story before it goes live.