NEAR Protocol ETF Sees $35M in Inflows Despite Recent Security Concern

The Bitwise NEAR Protocol ETF (NRR) started trading on NYSE Arca on September 29, and it pulled in $35.5 million in net inflows on its first day, pushing total assets to around $36.5 million. This is a significant amount of money, considering the fund's target yield of 5% plus the price movement of NEAR itself.

The launch numbers are even more impressive when you consider that NEAR was hacked just months ago in April, with an attacker draining wallets without phishing links or compromised private keys. The issue was caused by a missing line of code in the NEP-141 token standard, which relies on a callback to refund unused token balances after a transfer.

Despite this security concern, institutional investors are still interested in investing in NEAR, thanks to its AI-narrative and chain abstraction. The protocol has been focusing on user-owned AI agents and has seen growth numbers that institutional allocators can point to. NEAR Intents now reports over $30 billion in cumulative cross-chain volume across 35 chains.

The fact that investors are willing to overlook the security concern and invest in NEAR is a testament to the growing interest in AI-narrative tokens. The protocol's moves, such as cutting its maximum annual token inflation from 5% to 2.5% and routing protocol revenue into buybacks, have made the supply-side math more attractive.