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Source: Chain Tea House
Author: Jasur
Since April, there has been a growing news about the Near Protocol, including the recent completion of a $350 million funding round and the upcoming launch of the stablecoin USN.
Chain Tea House also published an article the day before yesterday to introduce usn in advance (upcoming launch of an annualized 20% algorithmic stablecoin USN, "the future belongs to NEAR"? USN will be the algorithmic stablecoin of the Near ecosystem and will provide an annualized yield of 20% after release, benchmarking Terra's UST.
The good news has driven the near market cap to rise, but it is worth noting that the Near Protocol has been low-key for most of its existence, although technically, it has always been a potential competitor to Ethereum, and the sharding expansion that can only be achieved after the Ethereum 2.0 upgrade, Near has done even better.
That has to think, near, which was launched in October 2020, why is it only now starting to be mined by the market, and is the launch of USN a clarion call for progress or a cry of despair?
The Clarion Call?
NEAR began in 2017 with a machine learning project called NEAR.ai, initiated by Alexander Skidanov and Illia Polosukhin. At first, they did not want to directly study a public chain, but wanted to deploy their projects on the right chain, but found that no chain could meet their needs.
So they started their research in August 2018, and on October 13, 2020, the Near Protocol went live.
Near belongs to the Layer 1 blockchain and uses POS Proof of Stake in terms of consensus mechanism like other post-public chains. But unlike other chains, Near introduces a unique solution to the scaling problem. Nightshade allows Near's transaction processing power to scale linearly with the number of shards. As a result, as adoption grows, Near will always be able to meet the needs of the transaction.
Near is very good in technology, as far as the TPS of public chain performance is concerned, as of January 2022, Near's transaction processing capacity per second has reached 100,000 transactions, solana is 65,000 and Poka is 1,000 in the same period, and Ethereum can achieve the same transaction volume after completing 2.0 upgrades in 23 years.
In addition, Terra has not yet begun, Cosmos Evmos, Solana's Neon are working hard to achieve EVM, Near has already been implemented through Aurora. This makes it easy for developers to deploy smart contracts from Ethereum to NEAR. Thanks to NEAR's sharded scaling technology, users no longer have to spend high transaction fees or have to endure long confirmation wait times.
In terms of developer motivation, both developers and the NEAR Foundation are actively involved in the NEAR community. According to Electric Capital, Near is the public chain with the most full-time monthly active developers in any Layer1 blockchain, and the number of developers has increased by 4 times in the past two years, which guarantees the construction of the Near future ecosystem.
Near is favored by capital, and in addition to the recent completion of a $350 million financing, Near is often in the top three lists of many top crypto capital holdings. NEAR is Alamedas' largest position outside of Bitcoin; Near is also in third place in DCG's latest position.
A cry of despair?
From the perspective of technology, development, ecology, capital, etc., Near Protocal seems to be better than Ethereum 2.0, which has not yet been implemented, but this is not the case. Near Protocal's excellent technical aspects have very serious problems.
Inflation Token Model People tend to choose cryptocurrencies for inflation aversion, but Near Protocal's NEAR is an inflation token. Since 2020, NEAR circulation has more than tripled. In addition to the annual 5% inflation used to incentivize validators, upfront contributor token unlocking is also much faster than other projects.
Although NEAR also has a burn mechanism, 70% of the transaction fees from it will be burned. But to get inflation at 0 percent, the network must process more than 1 billion transactions a day, and deflation requires 1.5 billion transactions. Otherwise, the supply online will only get higher and higher.
Bleak fundamental data on 1 billion transactions? This is astronomical for the current Near, which has been trading below 820,000 per day over the past two months, with the highest number of transactions occurring on January 16 this year, reaching 1.7 million.
May still lack stablecoin as a medium, Near In addition to the low transaction volume on the chain, other public chain fundamental data including TVL, number of contracts, user volume, etc. are not as good as other public chains. Especially in the public chain ranking, near is placed in the Others in almost all data.
Solana tends to be labeled as the most centralized public chain, but Near centralized is even more serious, with only 100 validating nodes in Near as of today's data, compared to 73 in January, 54 last year, and Even 1462 for Solana.
And 36% of the initial tokens are distributed to the core team and supporters, and only 12% are available to the community. Only node-identity units can vote on governance proposals, a node seat requires 106159NEAR, nearly $1.7 million at the current price of $16, and ethereum 2.0 has a minimum threshold of 32ETH, which is only $96,000.
summary
When listing the various advantages and disadvantages, it seems that it is difficult to choose whether NEAR is a good project for a while, and even begin to doubt the motivation of the major crypto capital to reposition NEAR.
Yes, Near has extremely strong performance and can throw ETH1.0 a few streets at will; yes, Near will launch USN, which will greatly help the NEAR ecosystem to build the corresponding DeFi project; yes, many capitals are optimistic about Near.
But for a public chain project, the most important thing is how he compares with other public chains. As far as the current data is concerned, the fundamentals of Near are still hidden in the "Others", and most people can't even say that there are any well-known projects under the Near ecosystem, and only the eighteenth market capitalization can appear in the public eye.
Near really needs to fight a turnaround battle, perhaps because of this tragic situation, Near has to release the good news of USN more than ten days in advance, or perhaps it is because of this tragic situation that the USN annualization is going to be 20%. But whether this battle can be won is still a big question mark.