Near Protocol price increased 65% last month, moving up to 17th place in terms of coin market capitalization. So I did a little research on Near Protocol, then I created a wallet and performed DEFI transactions.
Founded in 2020, Near Protocol is a decentralized application platform aimed at providing developers and users with ease of use. It works with a proof-of-stake consensus algorithm and supports smart contracts. The distinctive feature of this blockchain is the sharding mechanism that also exists on Ethereum's roadmap. Through sharding, Near Protocol splits blockchain data into more manageable chunks.
To use the Near protocol, it is necessary to create a web-based Near Wallet first. Near has adopted a progressive understanding of security. An account can be opened only through a code sent to an e-mail address. On the other hand, 0.1 Near is required to use the account. We can easily send Near to our account by purchasing from Binance and choosing the Near network. If we are going to keep a significant amount in the Near account, it would be appropriate to apply security measures such as connecting a Ledger hardware wallet or creating a passphrase. Because otherwise someone hacking our e-mail can easily access our funds.
DEFI applications in the Near ecosystem with over $100M LTV are Ref Finance, Burrow, and Meta Pool. Ref Finance is a DEX. Burrow provides a lending service by the connotation created by its name. Metapool enables liquid staking, which is one of the rising trends in the crypto space.
I preferred Ref Finance because the financial opportunities it provides are more attractive. To use the application, it is necessary to first convert Near to wrapped Near(wNear). No fee is required for this operation. The returns of the liquidity pools in the application are satisfactory, but of course, I do not know how long these rates of return will continue. For example, the return of the ETH-BTC liquidity pool is 35%. The return of the USDT-USDC-DAI stable coin pool is 18.5%. Attractive APRs to those who do not know the 20% return provided by HBD on the Hive blockchain :)
Near's transaction fees are extremely low and the transaction speed is also quite good. Near compares to Solana in terms of speed, I think the experience Solana provides is slightly better.
Like many blockchains that claim to rival Ethereum, Near has a bridge with Ethereum. It is possible to transfer between Near and Ethereum networks via Rainbow Bridge, but the 16-hour transfer time seems a bit long to me. It seems more logical to transfer liquidity between blockchains using Binance as a bridge. In this case, of course, more than one swap operation is required.
NFT marketplace called Paras is one of the most used applications of the Near ecosystem. Like many blockchains, the Near ecosystem has Punks.
Near Protocol coins can be staked on the native wallet. The stake return is around 10%. According to the calculation made by Messari, Near's inflation is still at the level of 36%. Near staking will be an investment with limited profit potential in this regard. Near-USDC LP pair on Ref Finance provide 60% returns. It would be more appropriate for investors who believe in Near's potential to make such a choice. On the other hand, we should keep in mind that the DEFI option is less secure compared to staking on the blockchain.
Conclusion
Near is a blockchain with developers with bright resumes and they have a unique approach to consensus. By using sharding technology, they offer users the opportunity to make fast, secure, and inexpensive transactions, and they are constantly improving their technologies. Near coin is used for transaction fees as well as payments made about keeping data on the blockchain.
According to Messari data, only 16% of Near Protocol's 2050 supply has been issued. Considering the number of coins that will be on the market in 2050, Near still ranks 8th in terms of market cap.
Although Near has an exciting technology, I do not find it attractive to invest in Near coin due to its token economy. Of course, there is a possibility that the competitive advantage of sharding technology will make the token economy insignificant. For now, my preference is to wait and see.
Thank you for reading.
Cover Image Source: near.org
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