Today’s blockchains have achieved significant progress. The total Crypto Market Capitalization skyrocketed from roughly $15 billion in 2017 to $2 trillion as of today. Bitcoin, the original blockchain, launched in 2008 has been priced at over $1.2 trillion, followed by Ethereum with the MC of $427 billion.
Unfortunately, these original networks are facing problems of scalability, security, and usability. In this article, we would like to introduce a high level overview about Near Protocol and its ecosystem. The protocol aims to represent an evolution beyond what already exists and is the first decentralized application platform to solve all of the three key challenges mentioned above to gain mainstream adoption.
We will cover plenty of useful information about the Near ecosystem and some predictions from Coin98 Insights:
- Near overview, Near token, and Roadmap.
- The ecosystem on Near Protocol.
- Predictions and investment opportunities within the Near Ecosystem.
So let’s get started!
What is Near?
NEAR is a blockchain platform allowing developers and entrepreneurs to build applications and secure high-value assets such as money or identity, etc. while making them friendly and usable enough for consumers to access.
In history, Near had an impressive fundraising result. It successfully raised almost $35M and has been backed by the most well-known venture capitals and firms such as Coinbase Ventures, a16z, Multicoin Capital, Pantera, Arrington XRP Capital, IOSG Venture, Libertus Capital,... In Q1 2022, they raised $150M from top VCs in the market: Three Arrows Capital (lead), Mechanism Capital, Dragonfly Capital, a16z, Jump, Alameda, Zee Prime, Folius, Amber Group, 6th Man Ventures and Circle Ventures.
NEAR uses a sharding approach which allows the network to increase its capacity, throughput, and finality as additional nodes participate. It aims to achieve 100,000 TPS at 1M nodes, ~1s finality.
End-User Usability and Developer Usability: Besides providing familiar web experiences for their users, Near provides support for developers, allowing them to learn, develop, test, and deploy their applications easily. It supports contracts written in Rust and AssemblyScript, creates Robust Tooling - the NEAR’s development suite - to equip developers with a set of tools so developers can easily build, test and deploy applications.
Leveraging NEAR's performance with Ethereum Virtual Machine (EVM): Ethereum developers don’t need to learn an entirely new language to build applications on Near.
In total, Near is having 350+ projects in all categories. DeFi projects recently have been moving pretty fast with key players such as Aurigami, Bastion Protocol, Trisolaris, Ref Finance, Burrow Cash, Paras, etc.
- Ticker: NEAR.
- Blockchain: Near.
- Consensus: Proof of Stake (PoS).
- Token Type: Coin.
- Circulating Supply: 657,511,870 NEAR
- Max Supply: 1,000,000,000
- Total Supply: 1,000,000,000
- All-Time High (Jan 16, 2022): $20,44
- All-Time Low (Nov 04, 2020): $0.526
- Exchanges: Binance, Huobi, Gate.io, OKEx, etc.
- Aiming TPS: 100,000 TPS at 1M nodes, ~1s finality
- Validators: 100
- Blocktime: 1.33s.
- Total transactions: 103,000,000.
- Total accounts: 5,089,000.
- Avg. Tx fee ($): 0.05$.
Partners and Backers
- Aurora: An Ethereum Virtual Machine created by the team behind the NEAR Protocol.
- Octopus Network: A sidechain network to host Web3.0 application-specific blockchains, aka appchains, around NEAR protocol.
- The Graph: An indexing protocol for querying networks like Ethereum and IPFS. Anyone can build and publish open APIs, called subgraphs, making data easily accessible.
- Coin98 Wallet: Coin98 Wallet is the #1 non-custodial, multi-chain wallet and DeFi gateway, designed to seamlessly connect users to the crypto world in a safe and secure manner.
- ChainLink: Is a decentralized oracle network that provides real-world data to smart contracts on the blockchain.
- Band Protocol: Is a cross-chain data oracle platform that aggregates and connects real-world data and APIs to smart contracts.
- Synapse Protocol, cBridge, Rainbow Bridge, Multichain, Allbridge: Bridges to connect Near and other ecosystems.
Near is backed by top venture capital firms. including Three Arrows Capital (lead), Mechanism Capital, Dragonfly Capital, a16z, Jump, Alameda, Zee Prime, Folius, Amber Group, 6th Man Ventures, Circle Ventures, Multicoin Capital, Pantera, Coinbase Venture - they are picky investors and have high standards when it comes to evaluating investment opportunities. Similar to BSC which is backed by Binance and Solana which is backed by Alameda Research, Near would receive generous support from those backers and has its own advantages to accelerate in the long run.
a) 2018 - 2020: Formation of Near Protocol and its Mainnet
In August 2018, Illia Polosukhin and Alexander Skidanov started Near.ai. From April 2020 to August 2020, the mainnet was launched and the testnet was running in parallel with validators.
The team continued the code and security reviews until October 2010 when Near protocol governance responsibilities were handed over to the community as decided by an on-chain governance vote. This stage also unlocked token transfers and protocol rewards.
→ It means that Near Protocol has turned to be community-operated and that its node hardware is run by independent participants and no entity controls sufficient stake to override decisions made on the network, giving the network better security.
b) Q2, Q3, Q4 2021: Critical infrastructure components have been launched and integrated.
- Rainbow Bridge (4/2021) - Network Integration: a bridge developed by the NEAR Foundation to connect the Ethereum and NEAR blockchains.
- Aurora - an EVM built on the NEAR Protocol, aims for full compatibility with Ethereum development tools.
- The first and flagship DApps launched on Near include Ref Finance (AMM DEX); Metapool (Staking pool), Oin Finance (Lending), Paras (NFTs Marketplace), etc.
- Near active accounts exceeded 1M for the first time in September 2021.
- Simple Nightshade completed: Near will shard the state, but not process them. Validators will still track all shards.
- Announce $800M grant to develop DeFi, NFTs, gaming,... on the Near ecosystem.
2. Upcoming plans - Q1 2022 to Q4 2022
- Phase 1: Chunk-Only Producers (expected delivery in January 2022): Near will introduce a new role: chunk-only producers, who only validate one shard. This phase helps increase the total number of validators and improve the decentralization of NEAR. Once this phase is complete, there will be 200-400 validators and only a fraction of them need to run more expensive hardware.
- Phase 2 - Nightshade (expected delivery in 2022 Q3) and Phase 3 - Dynamic Resharding (expected delivery in 2022 Q4): Elimination of the need for any validators to track all the shards. Once this step is completed, both state and processing will be fully sharded.
→ Then the expansion on the fully shared version will continue, the TPS on Near Protocol will increase from 5 to 8 times, 100,000 TPS at 1M nodes, and approximately 1s finality. The network will become more secure, significantly increasing its throughput and finality.
All About Near Ecosystem
1. Rainbow Bridge
The fully-functional NEAR — ETH Rainbow bridge. It enables the transfer of any token, NFT, or asset between the NEAR and Ethereum blockchains. The total assets issued on Rainbow Bridge from Sep 27th to Oct 3rd, 2021 increased by 10.16% compared to the previous week.
Blockchain bridges are important for DeFi development in particular, and for any ecosystem in general. They create asset flows and interoperability between blockchains. Rainbow Bridge enables users to transfer digital assets from Ethereum - a blockchain that holds significant value to Near - the one that is developing its DeFi ecosystem and in need of additional liquidity. It is also exciting to see SOL <> NEAR and BSC <> NEAR bridges that are under development currently.
2. Octopus Network
A sidechain network to bootstrap and run Web3.0 application-specific blockchains, aka appchains. The Octopus Network launched its mainnet in September and its first appchain on October 8th. When Octopus runs in its full capacity, 30-50 appchains will be launched in the network annually.
At the moment, there are about 10 appchains announced that they will launch on Octopus.
3. Aurora - an EVM built on the NEAR Protocol, aims for full compatibility with Ethereum development tools. Aurora launched its validator on NEAR and started charging delegators with 9% fees to ensure transactions remain free for users. The fee will be adjusted over time according to the amount of the delegated funds.
Those three remain the three most important infrastructure projects on the Near ecosystem, as they significantly increase the scalability, the activeness of the Near blockchain in terms of the number of users and developers.
Flux, ChainLink, and Band Protocol are oracles that provide smart contracts with access to off-chain data feeds. Services from both ChainLink and Band Protocol have not had mainnet on Near yet and Flux Protocol is the first oracle originally developed on NEAR Protocol at this moment.
Metapool - a liquid staking protocol built on Near - announced its partnership with OIN Finance to bring the first native stablecoins to Near Ecosystem - $OUSD. Users will be able to enjoy the staking rewards on Metapool, while having $OUSD in their wallets to use.
However, the main source of stablecoin on the Near ecosystem is 1:1 collateral stablecoins on Ethereum and other blockchains: USDT, USDC.
Lending & Borrowing
Aurigami is the leading money market on Aurora. They’ve already received grants not only from Near Foundation but also Aurora and Proximity Labs. They raised an unknown amount of money from top tier investors in the space: Dragonfly Capital and Polychain Capital (leading the round), with participation from Mechanism Capital, Amber Group, Jump Crypto, Coinbase Ventures, Alameda Research, Lemniscap, QCP Capital, DeFi Capital, Folius Ventures, D1 Ventures, and Genblock Capital.
At the moment, Aurigami is having $439M in TVL in their protocol ($260M from borrowing). They support 8 assets: USDC, USDT, ETH, WBTC, NEAR, AURORA, stNEAR and TRI (coming soon). Pre-mining of $PLY token is launching, and 0.5% of the total token amount is being distributed weekly for liquidity providers.
2. Bastion Protocol
Bastion Protocol is the second winner of the money market category on Aurora (and in the Near ecosystem). Like their competitor Aurigami, they also received grants from Near, Aurora and Proximity Labs. At first, their product is a Compound-fork, but then they develop the Realm mechanism - a fork model of Rari Pool.
Although they haven’t announced their investors, they did have a sneakpeek in their discord AMA that they have investors from Redacted, Sudoswap, Mars Protocol, Dopex and dYdX.
The team behind this project also show that they are top builders in the space. They use a noble launching mechanism in this space: Lockdrop (which are previously used by only Astroport and Mars Protocol on Terra) - to launch their BSTN token.
TVL of Bastion protocol is $254 M at the moment, with $156M from the borrowing side.
3. Burrow Cash
The leading money market on native Near Protocol (not on Aurora or Octopus Network). They are being built by Proximity Labs - the labs that support the development of DeFi on Near with a $350M grant in November, 2021. Backers of this project are not announced yet, and the product is still in the testnet phase, but they already published their NFT collection of 140 Mr.BRRR, which could be redeemed to $BRRR tokens in the future.
4. Oin Finance
A decentralized multi-chain stablecoin issuance protocol. OIN Finance has received a grant of $25,000 from the NEAR Foundation to develop OINDAO. Recently, OIN Finance introduced its partnership with Metapool to issue the first Near-backed stablecoin, which will add DeFi functionality to the NEAR token and unlock liquidity for NEAR holders.
5. Other lending protocols
The remaining names are Aries, Nexon Finance, AuroraSwap, NearLend, CrossFi,... However, none of them have outstanding points in terms of products, teams, backers or grants.
Lending and Borrowing projects have the same importance as AMMs in terms of assets and money flows retention. They maximize profits for DeFi players. DeFi players can deposit assets that they want to hold for the long term, earn interests, and are still able to get new assets minted to use on other projects.
The Lending category in the Near ecosystem is the most exciting one, with many opportunities for investors, farmers and community contributors. With the top three projects (all having strong teams, quality backers, unique products) getting traction from the market, this is an interesting war to watch and to earn profit.
AMM DEXes are undoubtedly necessary to any ecosystem since their abilities to attract huge amounts of volume and liquidity. AMM DEXes contain most of the important liquidity pools of their ecosystems and also act as places for DeFi users to earn additional rewards through Yield Farming activities.
Near Ecosystem has only two AMMs on the native Near blockchain currently - Ref Finance and Jumbo Exchange ($110M and $1M TVL respectively). On Aurora, the DEX category possesses an additional $150M TVL, with $140M for Trisolaris, $10M for Wannaswap.
All of those DEXes are the fork of Uniswap V2, with different design and tokenomics. In general, the DEX category in the Near ecosystem is already fulfilled and ready to support other categories in the ecosystem.
NearPad is a launchpad, DEX Aggregator, and Yield Aggregator of the Near Ecosystem. The platform will also be the first DAO-led protocol on Aurora by giving its community complete control over the treasury and public funds.
2. Skyward Finance
Skyward Finance is the first IDO platform on the NEAR protocol using the Streaming Time-based Auction mechanism. Skyward Finance’s goal is to enable fair token distribution for projects built on Near Protocol.
3. Smartpad, Boca Chica, Gonear, New Order
Smartpad, Boca Chica, Gonear, New Order are launchpads on the Near ecosystem. Smart pad and Boca Chica launched a few projects on Near, but they are not getting much demand from the market.
NFTs and Application
Mintbase is a global platform that allows anyone to create NFTs without worrying about technical complexities. Although Mintbase has the first-mover advantage, they can’t protect their market share and most of the NFT creators and traders go to Paras.
Paras is an NFT marketplace that focuses on digital collectibles. Paras started with digital art cards that were inspired by real-world trading cards and has expanded its digital collectible marketplace to other kinds of assets.
Recently, the volume of NFTs on Paras is outstanding: volume in the last 30 days is over $4M. Paras takes 5% of every transaction on its platform including the secondary market sales. The fee is quite high compared to other NFT Marketplace projects such as OpenSea (2.5% fee + ETH gas fee), Artion (Fantom’s NFT Marketplace, 0% commission), etc. Hopefully, the team can improve the fee structure or add substantial advantage edges to increase its competitiveness.
Other NFT Marketplaces on Near could be named: Endemic, Few and far, Jaypigs Finance, Apollo42, Cadera.
Despite the exponential growth of NFT in the last two months, NFT on Near is now saturated as the quality of NFT projects don’t go up. Moreover, the rise of DeFi on Near also takes the attention of investors from the NFT category.
NEARton is the hottest project in the gaming category in the Near ecosystem at the moment. Some other games showing exciting trailers include: Battlemon, Exverse, Metamon. However, none of them published their mainnet gameplay, and most of them are in the developing phase.
Predictions about Near Ecosystem's Future
350 is an impressive number of projects for the Near ecosystem, as they are a 2-year-old blockchain. Investors can expect to see:
- The war between lending protocols on the Near ecosystem: Aurigami, Bastion Protocol, Burrow Cash,... All of them are doing well and have their own advantages, and we are still pretty early to say who the winner of this battle is. They are having attractive APR to raise TVL.
- More DeFi projects are built on lending projects: yield aggregators, yield farming leverages, derivatives,...
- Gaming category on Near gets traction from the market when developing games are released in the future.
- Coinbase listing: Even though Near is backed by Coinbase, it has not been listed on Coinbase yet.
- Finish sharding: Near has almost completed its infrastructure and is switching to phase 1 of sharding - a step towards a fully sharded blockchain. This change will improve the total TPS by 5-8x and potentially reduce the storage cost. In the following phases, Near will increase the number of block producers on its mainnet to 100, then will introduce chunk-only producers and likely bring the total number of validators significantly higher.
Investment opportunities within the Near Ecosystem
New projects will either require Near tokens for gas fees or ask users to stake Near and earn rewards and privileges, especially when farming on top lending protocols now by depositing/borrowing $NEAR. The demand for Near tokens will probably increase.
The market cap of Near is about $7,3 billion. It is far lower than the market caps of various chains such as Cardano (roughly $28 billion), Solana ($28 billion), Polkadot ($20 billion), Ethereum ($351 billion) as of today. In terms of new blockchain technology, Near has the potential for further development and expansion.
Near holders also can stake Near tokens into validators and earn interests. As of today, there are 100 active validators, $430M in NEAR has been staked and the average annual interest is 10.5%. Near Protocol is the first blockchain that rewards stakers additional tokens beside NEAR, therefore opening endless opportunities for projects to partner with validators to market their projects.
One important project in the staking category is Metapool, which will reward Near holders with stNEAR token which could be used in DeFi platforms or swapped back to NEAR without the requirement of waiting 52 to 65 hours.
Currently, Aurigami and Bastion Protocol are the two best protocols to ape in the Near Ecosystem, due to the traction of the market. Burrow is definitely another one to keep an eye on when they announce their mainnet. Moreover, the method to ape-in lending protocols is pretty simple, as farmers don’t have to calculate the IL risk.
In the DEX sector, the APRs of Ref Finance and Trisolaris are the highest among all DEXes on the Near ecosystem. Stakers, however, should consider Impermanent Losses before starting to farm in the pools.
Retroactive and be a contributor
In the past, there were two significant airdrops in the Near ecosystem: Ref Finance and Paras. To speculate the next airdrop, you should try all the products of all projects that are launching mainnet/ testnet.
However, that’s the way of a speculator. To actually support the project and get rewarded for what you contribute, being a contributor is the best way. Most projects lack contributors who are active on their Telegram/Discord channels to support other members. Be patient, and you will be rewarded by projects.
There are currently some IDO platforms on Near Protocol: NearPAD, Skyward Finance, Boca Chica, Smart Pad, Gonear, New Order. No launchpad is standing out from the crowd, and this is also not a hot sector in the Near ecosystem at the moment.
Below are the main highlights for readers’ convenience:
- Quicktake 1: The DeFi category on the Near ecosystem is still in its beginning stage, and pay attention to the lending sector.
- Quicktake 2: The infrastructure category is ready to run.
- Quicktake 3: Near lovers have some varieties of investment opportunities.
To conclude, the Near ecosystem is growing very fast, and there are lots of opportunities for investors/ farmers/ traders. With the $800 M grant announced in November 2021, the Near ecosystem is going to develop even faster in the future. Hopefully, the article has provided readers with some meaningful and useful insights. Please leave any questions you have below, and we will get back to you as soon as we can!