In this educational guide, we’re going to explore the altcoin and blockchain named NEAR Protocol (NEAR). We’ll cover its fundamentals and planned roadmap, so you can use it to make your own price prediction.
What is NEAR Protocol and how does it work?
NEAR is a native blockchain and decentralized development protocol run by the NEAR Foundation. NEAR offers some technological advantages over today’s other popular blockchains, such as sharded architecture and higher throughput.
NEAR used to be a machine learning project before it became a blockchain development platform. It was started by co-founders Illia Polosukhin and Alexander Skidanov in 2017 to explore the automation of programs from a human specification. The team then branched to explore programmable smart contract platforms as well as crypto payments, soon realizing that the state of blockchain technology at the time did not allow for either to happen at a high capacity.
NEAR was designed to be developer- and user-friendly for onboarding new users to crypto, with some key innovations to build decentralized applications (dApps) to scale to mass adoption. NEAR has been live since April 2020, and its network validators unlocked token transfers in October 2020. The main bridge from Ethereum to NEAR Protocol is called the Rainbow Bridge, which launched in March 2021.
The consensus mechanism NEAR uses is proof-of-stake (PoS) consensus for verification of its ledger and network. NEAR uses a horizontal scaling approach and its consensus splits the network into parallel “shards,” which significantly increases the network’s processing capacity over other networks such as Bitcoin or Ethereum’s current mainnet. This is because shards allow the computation on the network to be dynamically distributed.
Other key innovations in NEAR’s technology are dynamic re-sharding, Nightshade, Doomslug, fees given as developer rewards, and token balance-based storage. Once sharding goes live on NEAR, the network will regularly adjust the number of shards supported by the network based on user demand. This dynamic sharding allows the network to only pay for the needed scale at any one given time.
Nightshade refers to a new sharding approach NEAR uses to reach consensus and settle cross-shard transactions. Doomslug is NEAR’s new block production technique that enables the network to achieve finality after one round of communication. NEAR also distributes 30% of any transaction fee to the owner of each transaction’s called contract, which incentivizes early application development on NEAR. NEAR token holders have the right to store data on the network as well, with 10KB of data allowed per 1 NEAR token.
NEAR Token
The NEAR token itself is a native token that runs on the NEAR Protocol network as a native currency. The token is used to make payments for transactions on the blockchain, as well as for voting.
NEAR can be staked to receive rewards in NEAR for contributing to security of the network. NEAR’s use of PoS provides Sybil resistance from DDos attacks as well.
The NEAR network also burns some transaction fees, which means that higher usage of the network will lead to more NEAR tokens being burned, driving up their value in the long term.
Token Distribution
NEAR tokens are inflationary and initially there were 1 billion tokens at genesis. These tokens were allocated to individuals and organizations on an ongoing basis during the rollout of the NEAR mainnet in April of 2020. However, inflation, transfers, and vesting schedules of the NEAR token did not begin until the final phase of the mainnet rollout, which was in October of 2020.
NEAR has also had four private sale funding rounds taking place from September of 2017 to June of 2019, one Series A funding round in March of 2020, and one public community token sale in August of 2020.
NEAR’s inflation rate is fixed and ongoing, with the network issuing inflation rewards at a rate of 5% per year. From these rewards, 90% go to validators, and the remaining 10% go to the protocol treasury.
NEAR also burns 70% of all transaction fees, which means that real inflation (rewards minus fees burned) could be less than 5%, depending on the level of network activity. The other 30% of a transaction fee is returned back to the smart contract called by the transaction to incentivize developers.
NEAR Protocol (NEAR) Price History & Technical Analysis
As of the time of writing, in April 2022, the price of NEAR is at $16.47, with a market capitalization of $11 billion USD.
The total value of NEAR grows as the user adoption of NEAR Protocol continues to grow by both developers and users as per Metcalfe’s Law. Also note that as more NEAR tokens are burned from transaction fees as a result of activity on the network, the real inflation rate is lowered, and this can have some deflationary effects on the token.
Metcalfe’s Law states that the value of a network is directly related to the number of users of that network, so if NEAR continues to innovate with its technological advantages such as sharding and more, the NEAR token will continue to do well.
What Expert Analysts say about NEAR Protocol:
- Wallet Investor says, “Based on our forecasts, a long-term increase is expected, the price prognosis for 2027-04-10 is 63.646 US Dollars. With a 5-year investment, the revenue is expected to be around +284.03%. Your current $100 investment may be up to $384.03 in 2027.”
- NewsCrypto says, “Our long-term NEAR price prediction for 2022 is bullish. It has a huge possibility of overtaking its current all-time-high (ATH) of $7.56 this year. However, it may reach $12.6 soon, reaching $20 if investors have planned that NEAR is a good investment in 2022.”
- DigitalCoinPrice gives a bullish NEAR coin price prediction: “As per the forecast data analysis, the price of NEAR is expected to cross the level of $21.02. By the end of the year, NEAR Protocol is expected to reach a minimum fee of $20.00.”
NEAR Protocol Partnerships
NEAR has forged a lot of strong partnerships since inception. Mot recently in 2022, NEAR has partnered with blockchain forensics firm Elliptic to enhance on-chain security. The DJ and producer deadmau5 also partnered with NEAR to launch an NFT partnership with Mintbase and NEAR. NEAR also partnered with the famous sailing event SailGP to create a new sports DAO. Sweatcoin, a London-based tech company, has partnered with NEAR in April 2022 to help create a new movement economy.
In 2021, Aurora, the Ethereum scaling solution that allows projects built on Ethereum to utilize the cutting-edge technology of NEAR, also partnered with ConsenSys to bring MetaMask, Infura, and more Ethereum tools to NEAR. Near also hosts at least 20 dApps on its protocol as of April 2022, and this selection is expanding as more developers join NEAR Protocol to build, given their incentivization.
Other partnerships during 2021 include those with Octopus Network, Mask Network, and TessaB-Blockchain.
NEAR Protocol Price Prediction: 2022-2026
NEAR first saw significant price traction during January 2021 alongside the rest of the cryptocurrency markets, setting a peak of almost $6 in February, and then going on to a peak of $7.6 in March of 2021. The summer of 2021 saw NEAR’s price go below $3 again and hold the support area at $1.
Once the cryptocurrency markets became bullish again near the end of 2021, NEAR exploded in the fall of 2021 to reach over $13 by October and over $17 by December. Moving into 2022 proved volatile for NEAR as well, with price swinging as high at $20 to as low as $7.8 with the overall shifting price action of the crypto markets.
As of the time of writing, the price of NEAR remains near its all-time highs and looks very strong. On the weekly chart shown above, there are higher lows and higher highs that are very apparent in the price action, meaning NEAR continues to follow an uptrend.
As long as the NEAR price remains above the $7.8 area, it is likely that NEAR will remain strong and continue to set new all-time highs until the trend changes. The reason the $7.8 area is so crucial for NEAR is because this significant area became support during the latter half of 2021 and was previously a resistance zone in the beginning of 2021.
Hence, for NEAR to remain healthy in its uptrend, we want to see the price stay above $7.8.
It’s uncertain to say when investors can expect the previous all-time-high to be breached, but it looks likely to happen during 2022 itself. It is also possible that a greater economic contraction will occur that leads to overall losses in the cryptocurrency markets. If a contraction occurs and the NEAR price loses the $7.5 area, we expect it to take even longer for a new high to be reached.
NEAR Protocol Price Prediction 2022
Some analysts predict that NEAR will see beyond its previous all-time high during 2022 itself, since the price action is currently so strong and the protocol continues to see growth in users as well as the growth of the NEAR Rainbow bridge. NEAR’s Nightshade sharding technology launched in late 2021 which has been instrumental in helping the adoption and price of the NEAR token grow.
We think it is reasonable that if bullish price pressure for NEAR remains despite the overall lull in the crypto markets, NEAR can see $25-30 or higher in 2022.
NEAR Protocol Price Prediction 2023
If NEAR remains highly used and sees even higher influxes of developer and user adoption, and the crypto markets remain bullish, NEAR can see a target of potentially $35 by 2023.
NEAR Protocol Price Prediction 2024
The overall growth of the cryptocurrency markets will contribute to NEAR’s growth, as well the greater trend of blockchains that are competing with Ethereum. It should be noted that the growth of Layer-2 scaling solutions as well as sharding technology from the upgrade of Ethereum 2.0 has the potential to eat into NEAR’s competitive growth, but the dynamics and timeline of this is uncertain to predict.
The market capitalization alone remains at $10.9 billion in April 2022, and a reasonable 2-4x to reach $20-40 billion in market cap by 2024 would put the NEAR price at $31-$44 price range or higher by 2024.
It’s not unreasonable to see NEAR hit these prices or higher by 2024 with continued innovation and development. Of course, this is also provided the overall crypto market remains bullish and we can avoid an economic downturn and bear market overall.
NEAR Protocol Price Prediction 2025
2025 is still far away at the time of this writing and longer term blockchain and Layer-1 blockchain trends are impossible to predict. However, the growth of user adoption of blockchain, crypto, and the market’s need for greater throughput solutions that NEAR solves over Ethereum will only increase.
We predict we will see NEAR at $50-60 or above by 2025, but it’s possible the token could become relatively irrelevant if Ethereum 2.0 is a blaring success, or a new Layer-1 and Layer-2 ecosystem takes hold of the market and development on NEAR ceases.
NEAR Protocol Price Prediction 2026
The crypto market overall could be worth $10T or even as high as $15T in total market capitalization by 2026. Depending on regulations and the overall economic cycles of the economy, we may see NEAR as high as $70-$80 by 2026, provided development and innovation of NEAR continues.
None of these predictions are financial advice, and are educated guesses as to where NEAR’s price may be at each time interval. It should be noted that any black swan events such as a catastrophic failure of the NEAR consensus, a hack, a cease in development, or other black swan events could impact these predictions significantly.
NEAR Protocol (NEAR): Conclusion
NEAR protocol is one of the strongest cryptocurrencies on the market today in terms of price action, and offers some significant technological advantages over other blockchains such as Ethereum and Bitcoin which help increase usability for both developers and users alike.
NEAR continues to hold price near its all-time highs and is actively seeing user growth, new partnerships, and more key innovations coming online such as sharding and the growth of its Rainbow Bridge that are poised to encourage further growth of NEAR Protocol and its token.
Of course, the long term outlook of any cryptocurrency is hard to say for certain, however provided that NEAR sees continued development and user growth, as well as developer growth thanks to its incentives and growing dApp ecosystem, it is likely to remain a strong choice of investment for the foreseeable future.
Some may be hesitant to commit their money into an asset for an extended period of time due to the extreme volatility and risk of the cryptocurrency markets. Plus, it is impossible to say for certain which blockchain will win the scaling wars given the rise of Layer-2 blockchains as well as Ethereum 2.0 coming online. So, NEAR investors should keep tuned to any market news about upcoming technological developments and catalysts.
FAQs
How is NEAR Protocol gaining traction?
NEAR is gaining traction thanks to offering a high throughput blockchain during a time of high Ethereum gas fees, offering developer incentives, offering an easy to use bridge from Ethereum which brought more liquidity onto the NEAR network, and as a result, its price continues to remain elevated near its all time highs, despite the overall lull in the greater cryptocurrency markets.
Investors and market participants were interested in its token, NEAR, due to the innovation the protocol offers, the unique deflationary and other token economic forces NEAR offers, and many other reasons that will contribute to the growth of the NEAR blockchain.
Where can I buy NEAR Protocol?
NEAR can be purchased and traded only on many exchanges including Binance, KuCoin, Gate.io, Huobi, Bitfinex, Bybit, and others.This means that both US and international investors can invest in NEAR.
In comparison to other cryptocurrencies, how can NEAR Protocol secure privacy?
As far as a blockchain protocol goes, NEAR is a public blockchain so is no exception. All transactions are recorded in the NEAR ledger of transactions. Privacy is not guaranteed, especially in comparison to other cryptocurrencies or blockchains that are especially known for securing privacy, such as Monero.
However, there are some projects that are building privacy-preserving technology in the NEAR ecosystem, namely Panther. This may lead to some privacy for DeFi users, however users of NEAR or any other public blockchain should not expect complete financial privacy, but rather partial and pseudonymous privacy.
Is it possible to stake NEAR Protocol?
Yes, NEAR can be staked for NEAR token rewards that are given to stakers and validators contributing to the upkeep of consensus of the Near Protocol.
Why is NEAR Protocol on the rise?
NEAR has been on the rise most notably since 2021, thanks to the growth of crypto and DeFi as a whole, which led to large rises in Ethereum congestion and gas fees. This made many market participants seek out alternative Layer-1 and Layer-2 blockchains, of which NEAR is a strong contender thanks to its strong technological advantages which allow for high throughput and low transaction fees.
There are many other reasons, such as NEAR’s offer of $800M in grants in bids for DeFi mindshare in October of 2021, developer incentives, its functioning Rainbow Bridge, and more.
Is NEAR Protocol completely anonymous?
No, NEAR is not fully anonymous to use, since it functions on a public blockchain.
Is NEAR token considered a currency?
Yes, the NEAR token is considered a currency that is used on NEAR Protocol for the purpose of payments for transactions. It can be bought or sold for fiat or other cryptocurrencies and its value may fluctuate.
Is it possible to generate profits with NEAR Protocol?
Yes, assuming the NEAR coin increases in price over time with the continued development of the Near Protocol, its partnerships continue to expand, and if more users and developers are onboarded onto the network with more liquidity additionally coming onto its Rainbow bridge from Ethereum and other blockchains.
All of this combined will lead to greater user adoption and transaction activity on NEAR protocol, which contributes to more NEAR coins being burned, and higher demand for NEAR.
However, this is not guaranteed due to the uncertain future of Layer-1 and Layer-2 scaling solutions that can affect the investment and the overall cryptocurrency markets.
All investors must do their own research, due diligence, and ensure that they are comfortable with the amount of risk they are taking. All cryptocurrencies are extremely volatile and risky. Always proceed with caution.
Why do people believe in NEAR Protocol?
Many analysts and investors believe that NEAR is a strong contender for a Layer-1 blockchain that compares favorably to Ethereum thanks to its sharding capabilities, unique consensus mechanism, fees given as developer rewards to incentivize dApp development, its strong NEAR Rainbow bridge that brings liquidity over from the Ethereum network, and many other features. Its price remains very strong despite the dipping price of bitcoin and Ethereum at the time of writing.
Is NEAR Protocol supply limited?
Yes, the NEAR token supply is capped at 1 billion NEAR coins. However, it is currently uncertain as to whether or not this may be subject to change as a result of future governance proposals and emissions from inflation.
How does the NEAR Protocol team investigate suspicious or fraudulent transactions?
It is not clear how the NEAR Protocol team investigates suspicious transactions. Any fraudulent or suspicious activity can be noted on the NEAR Protocol blockchain explorer, https://explorer.near.org/, since all activity is performed on a public ledger. Blockchain forensics agencies such as Elliptic and Chainanalysis can use methods to surveil public blockchains such as NEAR protocol.
DISCLAIMER
This is not financial advice, only observations and speculation. All investors should do their own research and due diligence. The crypto markets are extremely volatile and losing your investment is possible.
