NEAR Protocol climbed 4.7% over a 36-hour window this week, outperforming most large-cap altcoins as traders rotated into AI-linked tokens and cited the network’s recent security upgrades as a supporting catalyst, according to CoinMarketCap’s market wrap.
The move builds on a broader run for NEAR through August. Earlier in the month the network activated a mainnet upgrade introducing quantum-safe accounts, positioning itself as one of the first major layer-1s to harden its infrastructure against future quantum-computing threats. The upgrade drew attention from traders who read it as a credibility signal for a chain that has spent the past year repositioning itself around AI-agent infrastructure rather than its original sharding-focused pitch.
Buybacks remain the other half of the story. NEAR‘s Intents fee-switch mechanism, which routes a share of cross-chain transaction revenue directly into token purchases, has been running since February and continues to absorb part of the circulating supply with every wave of network activity. Combined with a prior cut to maximum annual inflation, from 5% to 2.5%, the mechanism gives NEAR a structurally different supply profile than most competing L1s, and traders have increasingly cited it as a reason the token holds gains better than pure narrative plays.
Institutional interest has been mixed rather than uniformly bullish. Grayscale trimmed its NEAR position within its AI-focused fund earlier in August even as the token remained the fund’s single largest holding, a reminder that even believers in the AI-infrastructure thesis are actively managing position size rather than treating NEAR as a one-way bet. Derivatives data shows leveraged long positions building alongside the rally, which increases upside momentum but also raises the risk of a sharper unwind if sentiment turns.
For traders watching the AI-token rotation broadly, NEAR’s setup illustrates a pattern playing out across the sector this month: security and infrastructure upgrades providing the narrative, fee-funded buybacks providing mechanical demand, and altcoin rotation providing the flow. Whether the rally extends will likely depend on whether NEAR’s upcoming Dynamic Resharding and further AI-tooling releases keep delivering on-chain activity to back the buyback engine, rather than the move being driven by short covering alone.
