Near Protocol (NEAR) stands out in the crowded field of blockchain technology, offering a decentralized platform designed to host applications with both user and developer-friendly features. As investors and enthusiasts look to diversify their portfolios, a common question arises: Is Near Protocol a good investment?
This extensive blog aims to explore the long-term prospects of investing in Near Protocol, offering insights into its technology, ecosystem, and market position.
Investment potential of Near Protocol
When analyzing whether Near Protocol is a good long-term investment, it’s best to take a multifaceted approach. So, let’s take a look at some important factors that shape the trajectory of the asset. Also, understand the broader context by exploring our thorough analysis of the future of crypto in the next five years.
NEAR price analysis and market performance
Here’s a detailed analysis of the yearly price performance of NEAR. Take a look:
Technical analysis of NEAR – Image via TradingView
2023 performance overview
The price of NEAR has fluctuated alongside other altcoins, suggesting its movement is tied to overall market trends. This relationship highlights the importance of understanding broader market influences when evaluating the asset’s potential volatility or stability. Consequently, diversifying investments becomes essential.
Moreover, the pattern of recovery post-rejection suggests that while NEAR is subject to market fluctuations, it has a capacity to regain value. This is an essential aspect to consider for long-term growth.
Gain a deeper understanding of market cycles by reading about what altcoin season is and what traders can expect.
Technical indicators
- Relative Strength Index (RSI): The RSI spent most of the year below the 50 line, indicating weaker momentum, but moved above 50 by October’s end, signaling increasing strength and buyer interest. It ventured into the overbought territory, registering at 80.99 by the end of the analysis. This typically suggests a potential forthcoming price correction as such high values are unsustainable in the long term. However, it also indicates strong current buying momentum.
- Chaikin Money Flow (CMF): Dominating the zero line between March and June and climbing above it from mid-October, the CMF value of 0.40 suggests strong buying pressure overpowering selling pressure. This is a positive sign, indicating that investors are actively investing in NEAR, potentially boosting its price.
- Bollinger Bands: Observing the Bollinger Bands, there was a period of contraction as the price underwent rejections and pullbacks from bearish pressure. However, starting from mid-October, the bands began to expand, and the price candles eventually crossed the upper Bollinger Band. While this suggests a higher risk, it also indicates a dynamic market that, if navigated well, could offer significant gains.
Quantitative metrics
- 2023 appreciation of +203.89%: NEAR started out the year at just $1.276 and, at the time of writing, exchanged hands at $4.253. This significant appreciation suggests strong past performance, which could position it as a potentially lucrative investment. However, past performance isn’t always indicative of future results, especially in the volatile crypto market.
- Short-term price increases: Over the past 30 days, Near Protocol’s price marked a 108.92% rise. Over 60 days, it further yielded a 235.68% increase. Lastly, over 90 days, its increase totaled a substantial 245.72%. This implies that investors looking at short-term horizons have seen substantial returns, especially those entering at the start of these periods.
- Market position: NEAR has established itself within the top 50 cryptocurrencies, ranking 21st with a market cap of around $4.2 billion. This ranking signifies a strong market presence and acknowledgment within the crypto community, potentially contributing to its stability and prospects for growth.
- Volume: A high 24-hour volume of around $660.68 million indicates active trading and liquidity. This is important for any investor looking for entry or exit points.
- Supply: NEAR’s supply isn’t capped and tends to grow over time. The protocol typically inflates the supply at approximately a 5% rate. Notably, Near Protocol burns 70% of these transaction fees. If the network’s daily transactions exceed approximately 1.5 billion, NEAR could transition from an inflationary to a deflationary token, reducing the total supply and potentially increasing its value.
For detailed insights and future outlook, delve into our latest NEAR price prediction.
Major achievements of Near Protocol in 2023
Near Protocol achieved quite a lot in 2023. Some of its major milestones include:
- Mainstream adoption: Near Protocol saw substantial growth, with four of DappRadar’s top ten apps built on it and daily active users exceeding a million. This indicates a strong move towards mainstream adoption of the Open Web.
- Blockchain operating system (BOS): Launched in February, the BOS provides a decentralized open web stack for developers to create more discoverable and resilient apps. It simplifies building and deploying on-chain frontends across networks.
- User growth: Near Protocol reported seven million monthly active accounts and over 35 million total accounts, with an average of two million transactions per day, indicating significant ecosystem engagement.
- FastAuth onboarding: FastAuth allows users to create accounts quickly using only an email, enhancing the onboarding process for users and developers.
- NEAR QueryAPI: This infrastructure offers NEAR blockchain indexers, storage, and GraphQL endpoints, simplifying the developer experience and removing the need to manage cloud infrastructure.
- Ethereum alignments and collaborations: Lastly, Near Protocol has been working on various initiatives, including partnering with Polygon Labs and Eigen Labs, to improve the modular Ethereum ecosystem and offer cost-efficient solutions.
Future NEAR roadmap for 2024
Looking forward, Near Protocol has envisioned some great plans for its future.
- Chain abstraction: Firstly, the platform will focus on making blockchain and infrastructure increasingly invisible to users and developers. This will be akin to how cloud services work today. Additionally, it will include account aggregation, enabling users to transact across all blockchains seamlessly.
- Protocol improvements: NEAR plans to launch Phase 2 of sharding, enhancing performance significantly and moving towards stateless validation. This will be coupled with the introduction of zkWASM to further decentralize validators.
- Artificial intelligence (AI) integration: The ecosystem is looking to integrate AI-driven governance and AI-augmented Web 3.0 experiences, focusing on minimizing risks and decentralization and moving towards the concept of user-owned AI.
The potential of Near Protocol as a viable investment- Image via Near
Near protocol: Fundamental analysis
Here are the core features and technologies that power the Near Protocol:
Sharding
Near Protocol uses a sharding technique called “Nightshade” to achieve scalability. Sharding is a method that divides the network into several smaller pieces or “shards” that process transactions and store data in parallel.
Moreover, the Nightshade sharding is dynamic, meaning it can adjust the number of shards as needed based on the network’s load. This ensures that the network remains efficient and scalable over time, adapting to increases or decreases in demand.
Consensus mechanism
Near Protocol operates using a proof-of-stake (PoS) consensus mechanism called “Doomslug.” PoS allows validators to stake their NEAR tokens to participate in the network consensus and earn rewards. Doomslug is designed to provide fast finality and high throughput.
Usability
The platform focuses heavily on user experience, with features like human-readable account names instead of just cryptographic wallet addresses. It aims to make interacting with decentralized applications (dApps) as easy as traditional apps.
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Developer friendliness
Near Protocol provides a robust environment for developers, including a WebAssembly (WASM)-based runtime for smart contracts. This allows developers to write contracts in familiar languages like Rust and JavaScript.
Cross-chain interoperability
The platform is built to interoperate with other blockchains through a bridge called “Rainbow Bridge.” This bridge allows for the transfer of tokens and communication between NEAR and Ethereum, expanding its ecosystem and usability.
Progressive security
To protect against attacks as the network scales, Near Protocol implements progressive security measures. This includes things like adaptive thresholds for validators and economic incentives to maintain network integrity.
Community and governance
Near Protocol places a strong emphasis on community involvement and decentralized governance. Token holders can participate in decision-making processes, influencing the development and changes to the protocol over time.
Risks and considerations of investing in Near Protocol
When considering an investment in Near Protocol or any cryptocurrency, it’s essential to understand the risks and considerations involved. Here are some key points to keep in mind:
- Market volatility: Cryptocurrencies, including NEAR, are known for their price volatility. Prices can dramatically increase or decrease over short periods, influenced by regulatory news, technological advancements, market sentiment, and more.
- Technology risks: While Near Protocol’s technology is innovative, it is also relatively new and untested at the scale of more established blockchains. Any unforeseen bugs or vulnerabilities in the protocol could affect its performance and trustworthiness.
- Evolving regulatory environment: The realm of cryptocurrencies is marked by a continuously evolving regulatory landscape. Amendments and shifts in regulations and laws can wield a substantial influence on the operation and value of digital assets like NEAR. The unpredictability in this sector poses a notable challenge.
- Adoption and competition: The triumph of Near Protocol hinges significantly on its embracement by developers and its success in drawing users to its ecosystem. It contends with numerous other blockchain platforms, all vying to address akin challenges. The fierce competition and the necessity for widespread adoption are crucial factors that render its long-term success uncertain.
Calculate your potential returns using our exceptional NEAR profit calculator, a handy tool for any investor.
NEAR token – Image via Near
The verdict: Is Near Protocol a good long-term investment?
In conclusion, investing in Near Protocol represents a nuanced long-term strategy contingent on one’s risk tolerance, market position, and technological advancements. Its technical indicators reflect growing investor confidence, while fundamental features like advanced sharding, user-centric design, and cross-chain interoperability highlight its innovative edge.
As with any emerging technology, a balanced approach, combining optimism with caution, is prudent when considering Near Protocol as a long-term investment.
