NEAR Protocol (NEAR) Listing Analysis

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About NEAR Protocol

Overview of NEAR Protocol

The NEAR Protocol is a decentralized platform designed to make applications available. The network runs on a Proof of Stake (PoS) consensus mechanism called Nightshade, designed to provide dynamic scalability as well as stable handling rates.

NEAR Protocol public blockchain project analysis
Source: near.org

Main Team of NEAR

The project technical team includes 3 ACM/ICPC Programming Competition gold medalists and many ICPC contestants, 3 senior developers who have worked for Google many years, a PhD in machine learning, several masters in machine learning and several former MemSQL developers responsible for fragmentation. The technical team has strong coding ability, and subsequently recruited the co-founder of ConsenSys’s former blockchain project and other blockchain talents. The marketing and operation team includes a number of entrepreneurs from prominent Wall Street investment company backgrounds. Team development ability is strong, also equipped with a certain marketing talent.

cryptocurrency development team launch blockchain project bitcoin
Source: CypherHunter

VC Fund Back up NEAR

NEAR has disclosed three major financing activities. The first of these financing occurred during the open token sale (ICO) conducted in July 2019, raising a total of $12.1 million. In this round, 11 mainstream investment institutions are involved, including Coinbase Ventures, MetaStable Capital. In April 2020, the second financing was led by a16z in the form of token private placement. The sale raised $21.6 million, involving more than 40 investment companies. In August 2020, NEAR launched a public token sale to investors. The offering raised $30 million. NEAR is funded from both traditional venture capital investment companies and crypto investors around the world, including mainstream investment institutions such as a16z, Arrington, D1 Ventures. Since 2019, they have raised nearly $63.7 million from more than 40 different companies and 1,500 individual investors.

investor and token fund support on cryptocurrency and blockchain projects Bitcoin Ethereum NEAR
Source: Messari.io

Number of Fans on Each Social Media

cryptocurrency data decentralized blockchain project social network
Source: CoinGecko

About NEAR Protocol Token-NEAR

Token Economics Overview

NEAR functions as a utility token. Its main functions include: 1) as Gas expenses; 2) as an exchange medium; 3) staking and entrustment; 4) as storage expenses. The current overall allocation of tokens is reasonable. The team counts only 14.5%. Any single supporter cannot hold more than 3.5% of the total initial issuance, and all have a corresponding warehouse locking mechanism, most for 24 months. This means that investors who financed tokens early in 2017 need to wait 2-3 years to get some liquidity and the price of the token was between $0.25- $0.32. The future value of its tokens is more reflected in the adoption of the overall network, which requires many developers, institutions, enterprises and other ecological contributors to join. More applications running on NEAR can attract more users to their platform and increase demand for tokens.

cryptocurrency token price supply economy model
Source: near.org

NEAR Token Allocation

The NEAR Protocol launched its mainnet on April 22,2020, and created 1 billion NEAR tokens. 5% additional supply is issued annually as block reward, with 90% allocated to verifiers (total 4.5%) and 10% is allocated to the protocol reserve pool (total 0.5%). 30% of the transaction fees were paid as rebates for contracts interacting with the transaction, and the remaining 70% were burned.

cryptocurrency token allocation value inflation
Source: near.org

NEAR Token Unlocking Schedule

All the general tokens in the creation block will be unlocked within 60 months, with more tokens from community grants and the initial release of the project. The specific annual circulation and total supply relationship are shown in the table. Overall, the unlock cycle of NEAR tokens is relatively long, and the overall distribution of tokens and the corresponding lock warehouse and release time are reasonable.

NEAR Token unlock schedule blockchain project
Source: near.org

Token Use Case

NEAR has the following use cases:

  • Cost for processing transactions and storing data.
  • Users can stake the NEAR token to run the network validator node.
  • It is used for network governance voting to determine how the network resources are allocated as well as the future technical direction of the protocol.

Node Staking Volume

cryptocurrency staking token volume
Source: near.org

Top 10 Active Accounts(in the last 14 days)

cryptocurrency active address token staking
Source: near.org

Value Analysis of NEAR

Industry Prospects

The biggest problem with Ethereum today is its scalability. The congestion in Ethereum was a hindrance to its development. High cost for Ethereum is a double-edged sword. On the one hand, it shows that Ethereum is the current worthy king of the public blockchain, attracting a large number of assets and activities. On the other hand, the high costs will prevent them from moving to a larger group, and the high cost is unbearable for most users.

To address this problem, Ethereum mainly relies on Layer 2 and sharding techniques. Layer 2 is making some progress, but it will take a longer time. The real maturity of the ETH2.0 takes time. The biggest contradiction of Ethereum in the future is the contradiction between the growing demand for scalability and its development progress.

Value Points of NEAR

NEAR adopted a sharding design for capacity expansion, which is similar to that of Ethereum 2.0. The main difference is that NEAR does not use a beacon chain but has a single chain containing the block. Each verifier maintains only the state corresponding to one sharding they validated the transaction. On cross-sharding calls, NEAR dynamically adjusts inter-sharding network resources to reduce the cost of cross-sharding transactions. Compared with Ethereum 2.0 and Polkadot, its overall sharding design is easy to implement.

Ecology of NEAR

At present, the NEAR mainnet has been transferred to the community autonomy. The foundation has completely withdrawn from the operation of the nodes, but can still support different nodes through proxy certification. Currently NEAR has passed the votes for the validator and the delegate validation node. When the main network moves to the second stage, the transfer restrictions will be lifted. Anyone can create accounts on the NEAR platform, participate in validation, and publish applications.

Future Potential of NEAR

Since ETH 2.0 has a long way to go, it is the window period for NEAR. If the sharding technology is implemented, it will develop its own ecology. NEAR uses a unique sharding design to address the current scalability problem of the public blockchain and reduce Gas costs. It provides a range of developer-friendly tools to attract developers, enterprises and other ecological contributors to their platforms. The future value is more reflected in the adoption of the overall network. This requires a lot of developers, institutions, enterprises and other ecological contributors to join. More applications run on NEAR, more users promote the improvement of the overall network value.

blockchain project ecology cryptocurrency development rank
Source: near.org

Potential Risk Analysis of NEAR

Competitors’ Analysis: Ethereum & Polkadot

Compared with public blockchains such as ETH, and DOT, NEAR is the one using sharding technology to achieve innovation in reducing fees and block congestion. NEAR’s sharding technology enhances its opportunity to gain advantage. In addition to solving scalability, NEAR’s sharding technology also tries to solve combinability problems, cross-sharding communication delay problems, cross-sharding transaction costs, etc. With these core issues, NEAR is attractive to dApp, and even DeFi.

Potential Risks of NEAR

  • Ecological development problem: With the continuous improvement of ETH 2.0, although NEAR has a developer-friendly environment and a good user experience, the current ecology of Ethereum and Polkadot is relatively mature. As a public blockchain project, NEAR also needs to depend on the overall ecological development of the project. Only when more developers and enterprises enter the NEAR ecology can the project develop and grow.
  • Technical difficulty and risk of project realization: there are many public blockchains, most of them hold high the banner of improving scalability and reducing Gas fees, but few who can stably accommodate high trading volume after landing. The actual development of NEAR in the later stage still depends on the realization ability of the team.
  • Competition Risk: In mainstream public chain projects, Ethereum is currently having a strong ecology and the barriers are increasing. Polkadot’s ecology is also growing. In the face of Ethereum and Polkadot and other new public blockchain projects, it is unknown whether NEAR can gain a place in the track of subsequent competition.

Risk Warning

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