A closer look at NEAR two years on from its mainnet launch
Today it’s been two years since the Near Protocol mainnet went live. The network launched on 22 April 2020 and became community-operated in September 2020. It also passed a vote to enable token transfers and launched its NEAR token in October 2020. NEAR combines a horizontal scaling approach with a unique consensus mechanism that splits the network into parallel shards and also distributes computing tasks to increase processing capacity.
- Near mainnet went live two years today
- NEAR token price increased 226% in the last 12 months
- TVL in Near increased by 550% from January 2022 to date
- Almost $300 million TVL in lending
At writing, Near has a total value locked of more than $780 million, which has increased by 550% since January 1, 2022 when it had around $120 million. Interestingly, almost $300 million of that sits in lending protocols. The native NEAR token has a market cap of $10.5 billion and currently ranks 17th in the top 100. It has increased by 226% in the last 12 months from $4.60 to $15.60. More notable is its 40% increase in the previous 30-days amidst a stagnant time for BTC, ETH, and other major cryptocurrencies.
Aurora: An Ethereum-compatible layer of Near
It’s important to note that much of Near’s activity takes place on the Aurora Network, the Ethereum-compatible layer of the Near blockchain. Aurora runs on Near and takes advantage of its many unique features, including sharding and developer gas fee remuneration.
Aurora provides an Ethereum layer-2 experience and has a broad ecosystem of DeFi dapps, including Bastion and Trisolaris, which account for more than $740 million of Aurora’s $972.6 million TVL. It is essential to mention Aurora because activity here feeds back to Near regarding its value and utility.
Why developers choose Near
Before we dive in, it’s essential to understand why projects have chosen to build on Near. One primary driver is that Near is the fastest way for dapp builders to get to market and do things that they didn’t expect were possible from a blockchain. Near interoperates with Ethereum with the ease of a layer-2 via the trustless Rainbow Bridge. All this while providing a flexible account model that can hide the blockchain from users until they’re ready. They establish this by using something Near calls progressive onboarding. It gives them a full-stack suite of tooling and a way to keep 30% of transaction fees generated by their contracts.
These features don’t just solve the cost and scaling problems facing the industry today but allow developers to create sustainable dapps and experiences that no other chain can support. In addition, these would of course be dapps that genuine users can use.
Two years from its mainnet launch, we dive into the dapp ecosystem on Near to discover which applications are driving the lion’s share of activity and value, helping Near become one of the most relevant blockchain solutions on the market.
Near ecosystem hype
DappRadar tracks 27 dapps on Near spanning all the major categories including DeFi, Exchanges, Collectibles, Games, and Marketplaces. A lot of the core DeFi activity happens on Aurora, a network DappRadar doesn’t currently track. However, we can dive into the dapp ecosystem on Near to see which services drive users into their dapps.
By applying the user filter on the Near dapp rankings on DappRadar, we can instantly see which dapps have attracted 1,000 or more unique active wallets over the last 30 days, letting us zoom in on what is hot right now.
NFT and digital collectible marketplace Paras leads the pack regarding user activity, with more than 17,000 wallets interacting with its smart contracts over the last 30 days. Paras started with digital art cards inspired by real-world trading cards with an overriding belief that every single physical art form needs to be stored and digitized to keep it future-proof.
Paras wants to produce and develop crypto-native IPs potentially tailored and designed for mediums such as comics, games, and toys. They are giving utility and use cases for digital assets that could create more value for collectors and creators.
Another marketplace with a difference is NEARnames, which is not a traditional NFT marketplace. Instead, it acts like an affiliate system that lets current Near users bring new users aboard by giving them a personalized account name and then sending them a post including instructions to help them get started in the Near ecosystem.
Ref Finance provides the monetary backbone of Near and facilitates token trades, and takes full advantage of Near’s low $0.005 per swap fees and one-to-two second finality. Using the Rainbow Bridge, which lets users move crypto assets between Near and Ethereum, traders can utilize the billions of dollars in ERC-20 assets from Ethereum and, eventually, from any chain, including BSC, Matic, Cosmos, and more.
Below these three leaders, we see five DeFi protocols, all vying for the same eyeballs, it would seem. However, we see that each has its merit upon closer inspection. Meta Pool is attractive as it lets NEAR token holders leverage their holdings by allowing them to earn traditional staking rewards and participate in DeFi protocols simultaneously. A process that’s become known as liquid staking.
When users deposit their NEAR tokens into Meta Pool, they receive stNEAR, which can then be used in other DeFi platforms, as collateral for loans, for example, while their NEAR earns up to 10% staking rewards. This service has helped Meta Pool capture more than $120 million in TVL, accounting for around 15% of the total TVL in Near.
Burrow launched recently and has only been active for around a month at writing. Moreover, it compliments Meta Pool unlocking liquidity for interest-bearing assets, particularly layer 1 staking derivatives such as stNEAR and stETH. Burrow is a decentralized, non-custodial interest rates platform that enables users to supply assets to earn interest and borrow against them to unlock liquidity.
Burrow is similar to Aave, Compound, and other pool-based protocols. Users of Burrow can deposit stNEAR as collateral, then borrow more NEAR to create a leveraged staking position, or borrow a stablecoin to make a self-repaying position. The synergy between Meta Pool and Burrow shows how complex DeFi legos start to click into place once an ecosystem works collaboratively. Early results for Burrow look very promising as it attracted almost 3,000 wallets that completed more than 83,000 transactions in less than 30 days.
NEAR Crowd offers us a glimpse into another alternative dapp that sits outside the most viewed categories. NEAR Crowd is a service that allows people to earn NEAR tokens by completing small tasks provided and funded by a centralized entity, called the requestor.
NEAR Crowd significantly limits the requestor’s power and moves the power to the community instead. In particular, while the Requestor specifies what needs to be done in each task, the community decides whether each job is completed correctly according to this specification. This is achieved by creating a set of rules, checks, and balances that are enforced by a smart contract deployed on Near. It’s straightforward to see how such a system could one day be extended to deal with internal business issues such as HR or workflow and replace apps such as Trello.
Lastly, we have two DeFi protocols achieving over 1,000 unique active wallets in the last 30 days. Jumbo Exchange gives users an AMM DEX that offers a cheap, seamless way to trade tokens. At the same time, Skyward Finance’s mission is to enable fair token distribution and price discovery for projects built on Near Protocol, further connecting the dots within the ecosystem and encouraging native dapp and token growth.
NEAR legos click together
What’s clear is that the Near dapp ecosystem is that it’s composed of complimentary legos that are now all starting to click together. Last month, Bastion closed a $2 million seed round at an undisclosed valuation. At the same time, Near has attracted a wave of DeFi and investment activity of late, with Tiger Global leading a $350 million raise for the layer-1 blockchain earlier this month.
All this activity has pushed the native NEAR tokens value 226% higher over the last 12 months and its TVL is within touching distance of $1 billion. In comparison, activity on Aurora is consistent and should not be discounted from the bigger picture.
The above does not constitute investment advice. The information given here is purely for informational purposes only. Please exercise due diligence and do your research. The writer holds positions in various cryptocurrencies, including BTC, ETH, and RADAR.