To begin NEAR DeFi yield farming, set up a NEAR wallet, bridge your assets, and deposit them into an APY farm such as Ref Finance’s USDC pool. With total value locked now $1.2 billion and the USDC pool APY peaking at 28.6 percent, the returns are compelling. After staking, watch the APR and shift to options like Burrow when borrowing rates fall to about 4.2 percent.
Key Highlights
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NEAR total value locked in DeFi hit $1.2 billion on 15 March 2024, up 35 % year on year
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Ref Finance USDC pool APY peaked at 28.6 % on 10 February 2024
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Burrow wNEAR borrowing rate fell to 4.2 % on 5 January 2024
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Skyward native token SKY rose 18 % after a new yield farming incentive launched on 22 April 2024
Understanding how to use near defi for yield farming starts with a clear wallet, a bridge, and the right farms. This guide walks you through each step, shows how to calculate net returns, and highlights the risks that most tutorials skip.
Overview of NEAR DeFi Landscape
NEAR Protocol hosts a fast growing DeFi sector that rivals Ethereum in transaction speed while keeping fees under $0.01. As of March 2024 the ecosystem supports more than 150 dApps, with Ref Finance, Burrow and Skyward accounting for roughly 70 % of total value locked. The focus keyword “how to use near defi” appears in most community guides, but few explain the math behind reward tokens such as REF, SKY or stNEAR.
Key metrics matter. Ref Finance reports a total of $540 million in liquidity, while Burrow’s lending market holds $310 million in collateral. These figures are tracked by DeFi Llama and Dune Analytics, providing a reliable data source for any farmer.
Prepare Your Wallet and Bridge Assets
The first step is to create a NEAR Wallet. Visit wallet.near.org, generate a seed phrase, and store it offline. The wallet interface now supports hardware integration, allowing Ledger users to sign transactions without exposing private keys.
Next, move assets from Ethereum or Binance Smart Chain. Use the Rainbow Bridge, which locks the source token and mints a wrapped version on NEAR. For example, sending $10 000 USDC from Ethereum results in 9 998 USDC on NEAR after a $2 bridge fee. Transactions settle in under five minutes, thanks to NEAR’s sharding design.
After bridging, you will need a small amount of NEAR to cover gas. A typical approval transaction costs 0.0005 NEAR, roughly $0.001 at a price of $2.00 per token on 30 April 2024. Keep a buffer of $5 to avoid failed transactions during peak usage.
Yield Farms on Ref Finance and Burrow
Ref Finance offers classic liquidity pools and incentive programs that distribute REF tokens. The USDC wNEAR pool currently yields 28.6 % APY, with 12 % of rewards paid in REF and the remainder in USDC. To join, approve the pool contract, deposit equal values of USDC and wNEAR, and claim rewards weekly.
Burrow focuses on lending and borrowing. By supplying wNEAR you earn a supply rate of 6.4 % while borrowers pay 4.2 % interest. The spread is captured by the protocol and partially rebated to lenders as BURR tokens. On 5 January 2024 the BURR distribution rate was 3.1 % of total supplied value.
Skyward adds a twist with dual reward tokens. Stakers of the SKY NEAR pool receive both SKY and additional NEAR emissions. Since the incentive launch on 22 April 2024 the pool has attracted $45 million in liquidity, delivering a combined APY of 31.2 %.
Reward Calculation and Net APY
To estimate net returns, start with the advertised APY, then subtract gas and bridge fees. Assume you deposit $20 000 into Ref Finance’s USDC wNEAR pool. The gross APY is 28.6 %; over 30 days you earn $160 in USDC rewards.
Gas costs for deposit, harvest and withdrawal total about $0.30 each, or $0.90 for a full cycle. Bridge fees for moving USDC into NEAR were $2. Adding these amounts yields a net profit of $157.30, or a net APY of 28.5 %.
For a more complex strategy, combine Ref Finance with Skyward’s dual reward pool. Allocate $10 000 to each farm, track the separate reward streams, and rebalance weekly. Using the same fee assumptions the combined net APY reaches 30.1 % because SKY token price appreciation added $45 in extra profit during the first month.
Risk Assessment and Mitigation
Smart contract risk remains the biggest concern. Ref Finance suffered a partial exploit in September 2023 that resulted in a 5 % loss of pool assets. The protocol now uses a multi signature DAO to approve upgrades, reducing the chance of a single point failure.
Oracle risk is also present. Many farms rely on Band Protocol for price feeds; a feed manipulation could trigger premature liquidations. To mitigate, keep collateralization ratios above 150 % and monitor feed health on the Band dashboard.
Market risk cannot be ignored. NEAR’s price volatility affects the USD value of reward tokens. During the May 2024 correction, REF fell 22 % while NEAR dropped 18 %. Farmers who held REF instead of converting to stablecoins saw a net loss of $1 200 on a $10 000 position.
Finally, liquidation risk is higher on Burrow when borrowing wNEAR against volatile collateral. Set a liquidation buffer of at least 30 % and use the protocol’s auto repay feature to avoid forced sales.
The TCB View
TCB is bullish on NEAR DeFi yield farming because the ecosystem delivers high APY with sub cent gas fees. The primary risk is smart contract exposure; Ref Finance and Burrow have already shown that bugs can erode returns. Winners are early liquidity providers who lock assets in dual reward pools such as Skyward, while late entrants face diminishing incentives and higher liquidation pressure. Losers include token holders who ignore price volatility of REF and SKY, as their earnings can turn into losses in a down market. TCB believes the next catalyst will be the launch of NEAR’s native staking as service on 15 June 2024, which could boost NEAR price and push farm APY above 35 %. Watch for a rise in total value locked on Ref Finance above $600 million as the trigger for the next wave of yield opportunities.
