The NEAR Protocol is an alternative Layer-1 (L1) protocol, built as an open-source platform for decentralised applications. Founded in 2018 by Alexander Skidanov and Illia Polosukhin, NEAR is a sharded, proof-of-stake blockchain that prioritizes cheap and fast transactions, while remaining developer friendly.
Embedded within the NEAR ecosystem is Aurora, a DAO governed EVM-compatible scalability solution. Aurora is fully compatible with Ethereum, boasting a trustless bridge and leveraging ETH as its base currency.
In the past six-months, the $12.7B network has gained significant traction on a number of fronts. Decentral Park showcases some of the key metrics it tracks and provides insight for why…
NEAR is reaching its inflection point.
TVL Growth Rate
What this shows
Both NEAR and Aurora have exhibited strong total-value-locked (TVL) growth over the past eight-months, outpacing DeFi-wide TVL growth by 342% and 166% respectively. The EVM-compatible Aurora chain has accumulated significantly more value than its main chain NEAR. In $NEAR terms, both chains have seen steady, sustainable growth, particularly over the past three months.
Why this is important
NEAR and Aurora are showing TVL growth similar to that of more established DeFi ecosystems such as Ethereum, Solana and Avalanche in their inception. This proved crucial to the network effects of said ecosystems, and signals both NEAR and Aurora are laying the foundations required to compete with the most prominent DeFi protocols.
Aurora provides a route for NEAR’s ecosystem to tap into the ever-growing ‘L222 theme’. Aurora accumulating ~2X the value locked in NEAR demonstrates the power of EVM-compatibility in attracting capital.
The lack of volatility in TVL in $NEAR terms suggests this growth is organic and not event-driven, a favourable growth dynamic for sustainability over the short- to medium-term.
EVM Ecosystem Total-Value-Locked
What this shows
Honing in on the EVM-compatible chains, we can see that over both a three-month and year-to-date timeline Aurora has outperformed all other EVM-compatible chains in terms of percentage TVL growth. Aurora places third in three-month and first in year-to-date TVL growth in USD terms. This is particularly impressive for an ecosystem that came to fruition less than six-months ago.
Why this is important
Aurora is gaining momentum as the fastest growing EVM-compatible ecosystem, which is particularly important as anticipation of the L222 theme grows. Capital flooding into the Aurora ecosystem at faster rates than other EVM-compatible ecosystems offers deeper liquidity across DeFi markets and bolsters use cases within the ecosystem relative to other ecosystems, this should further drive future adoption
Non-EVM Ecosystem Total-Value-Locked
What this shows
In a similar fashion to Aurora in the EVM-compatible ecosystem, NEAR has significantly outperformed other non-EVM chains over the past 3-months and year-to-date from a percentage growth in TVL perspective. NEAR has boasted over 3X percentage TVL growth relative to other EVM-compatible ecosystems.
Why this is important
This is particularly important to see, as it shows that not only is the EVM-compatible chain within the NEAR ecosystem accumulating value, but that this growth is also being driven back to the native main chain. A strong main chain on which Aurora is secured is crucial for its future viability.
NEAR Eco TVL Rank
What this shows
The collective NEAR ecosystem, including the Aurora chain, has seen a meteoric rise from the 19th largest ecosystem by TVL to the 11th in less than three-months.
Why this is important
This is the largest TVL rank climb within the top 20 ecosystems over the past three-months. Growth in the value locked in the NEAR ecosystem relative to other ecosystems shows NEAR and Aurora growing in popularity amongst users. Not only this, but a larger TVL relative to other ecosystems strengthens the relative value proposition of the NEAR ecosystem, which has the potential to drive further adoption.
NEAR Eco dApps Coming To Market
What this shows
This chart shows the number of decentralised applications deployed to both the NEAR and Aurora ecosystems. The rate at which dApps have been deployed to Aurora has far outweighed that of NEAR. Currently, there are over five times more dApps on Aurora than NEAR.
Why this is important
This emphasises the importance of EVM-compatibility in attracting not only value, but also use cases within a DeFi ecosystem. Having an array of diverse and expanding use cases within an ecosystem is critical in attracting users and value.
NEAR Eco TVL Dominance
What this shows
This graph shows the percentage of NEAR ecosystem TVL in comparison to total DeFi TVL. NEAR ecosystem dominance has shown strong growth over the past eight-months, accelerating since March 2022 to 1.12% of the total DeFi ecosystem.
Why this is important
This recent growth places NEAR within touching distance of established smart contract blockchains such as Arbitrum (1.25%), Polygon (2.29%), Solana (3.05%) and Avalanche (5.41%). Despite this, the NEAR ecosystem still makes up only a small portion of DeFi and as such reserves room for growth. As dominance grows, NEAR will further cement its place within the relatively interdependent DeFi ecosystem.
Aurora TVL By dApp
What this shows
This chart displays TVL within the Aurora ecosystem broken down by specific dApps. Trisolaris dominance has been declining, as the Aurora ecosystem has grown significantly to a more balanced collective of protocols.
Why this is important
The importance behind this development is two fold, primarily, value being distributed in larger quantities and more evenly across a variety of protocols enhances their attractiveness to new users, and so will further drive adoption within the ecosystem. Secondly, this is also a sign that the Aurora ecosystem is maturing, crucial to the long-term sustainability of the network.
This diversification in Aurora TVL is no doubt driven by its EVM-compatibility, and the ease at which developers can either migrate over existing protocols from other EVM-compatible chains, or build in languages they’re experienced in.
NEAR Locked for stNEAR
What this shows
This graph shows the volume of $NEAR that has been deposited into the native proof-of-stake contract, in exchange for $stNEAR, in order to secure the NEAR ecosystem. NEAR staked has accelerated rapidly, growing almost 4X in the past eight-months.
Why this is important
The NEAR ecosystem becomes increasingly secure as future funds are deposited to validators. Said security provides comfort to both users committing capital to an ecosystem, and developers contributing to building said ecosystems.
Staking within an ecosystem demonstrates long-term alignment with the ecosystem, and as such can be used as a proxy for trust in the future of the network. The stNEAR growth, particularly over the past two months therefore signals strengthening sentiment on the future of the NEAR ecosystem.
NEAR Staked For Derivatives
What this shows
The percentage of circulating supply of the L1 cryptoasset deposited in liquid staking derivative protocols is higher for NEAR than Ethereum. Over 1.1% of NEAR’s circulating supply is used in Meta Pool while less than 0.4% of ETH’s circulating supply is deposited to the Beacon staking contract.
Why this is important
Ethereum’s lower percentage may be caused by the inability for investors to withdraw their principle until some time after ‘the merge’ occurs. This also demonstrates that other PoS networks are quickly tapping into a growing liquid staking derivative market - now valued at $500M+ (steady state).
DEX Trading Volume
What this shows
This graph shows the relative trading volume across five decentralised exchange (DEX) protocols, Trisolaris being Aurora native, Ref Finance NEAR native, while Osmosis, TraderJoe and SushiSwap represent non-NEAR ecosystem DEXs.
Both Trisolaris and Ref Finance have seen an uptick in growth over the past month, bringing them to slightly less than 10% of the relative trading volume.
Why this is important
DEXs sit at the heart of any DeFi ecosystem, and as such it’s incredibly important for both NEAR and Aurora to boast strong decentralised exchanges with deep liquidity for their future viability.
The growth depicted in the past month shows Ref Finance and Trisolaris in particular gaining significant traction relative to competitors. Deeper DEX liquidity strengthens the value proposition across the entire NEAR DeFi ecosystem.
DEX Utilization Ratio
What this shows
The utilisation ratio (UR) of decentralised exchanges is a ratio of trading volume to total value locked, and represents the efficiency of a decentralised exchange. Trisolaris briefly exceeded the UR of Uniswap, one of the most efficient DEXs within the whole of DeFi, while both Trisolaris and Ref Finance have been gradually closing in on Uniswap from a UR perspective.
Why this is important
Higher UR ratios not only signal high usage of a decentralised exchange relative to its value locked, but also favourable fees generated for liquidity providers, ceteris paribus. This chart signals strong usage within the core DEXs of the NEAR ecosystem, along with a catalyst for further capital to be deployed.
NEAR Bridge Activity
What this shows
This chart shows the total volume that has been bridged from the Ethereum ecosystem to both the NEAR and Aurora ecosystems utilising the Rainbow Bridge, as well as the daily volume of said assets bridged. TVL in the Rainbow Bridge has grown to exceed $1.3B in approximately six-months, while daily volume has been trending upwards over the past two-months.
Why this is important
Ethereum currently boasts the largest ecosystem, with a TVL of $79.87B. In order for the NEAR ecosystem to accumulate further value, it will either require inflows of new capital, directly from USD, or the transfer of assets away from alternative ecosystems.
This chart is particularly important as it confirms that users and capital are migrating, at an accelerating rate, to the NEAR ecosystem, a sign that its prospects relative to Ethereum are vastly improving.
Developer Activity
What this shows
Santiment’s developer indices such as developer activity and developer contributors count have been steadily increasing over the past 4 years.
Why this is important
Ecosystems are built by developers. Developer activity indices can be a useful (but imperfect) measure of how much the ecosystem is receiving commitment for creating a working product and these measurements may indicate how likely a project will ship new features.
Borrow To Supply Ratios (Lending)
What this shows
Bastion, a lending protocol on Aurora, has over $1.42B in total deposit value of which $893M is borrowed against. Bastion’s borrow to supply ratio is higher (62%) than blue chip names Aave (53%) and Compound (52%).
Why this is important
May indicate that demand is reaching supply with Bastion achieving signs of early product-market-fit aided by incentive mechanisms. Bastion’s higher borrow/supply ratio shows that a much more nascent lending protocol can provide a more efficient market than its longer-standing peers.
Daily New Addresses
What this shows
Daily new addresses for Aurora have reached 10k with more significant growth occurring in late March and April 2022. There are now more new daily addresses on Aurora than alternative-EVM chains like Fantom and Avalanche.
Why this is important
Daily new addresses can be used as a proxy for utility growth for an ecosystem. Addresses can also be a key input for modelling networks using Metcalfe’s law where the value of a network is proportional to the square of the number of its users.
Aurora Tx Count
What this shows
Aurora’s transaction (Tx) count over its first first few months was higher than other EVM-compatible ecosystems including Fantom, Polygon, and Avalanche when they launched. Tx Count has now hit 200k.
Why this is important
While a primitive metric, Tx count can be helpful in gauging approximate network utilisation and demand for block space. Aurora’s more rapid growth since inception for Tx count may be driven, in part, by different market structures and idiosyncratic liquidity incentives within ecosystems.
Active Contracts
What this shows
NEAR native active contracts are climbing to new all-time-highs (~1.5k). As a RUST ecosystem competitor, NEAR has consistently seen a higher active contract count than its peer Solana which has seen a more steady growth to 1k over the past year.
Why this is important
Smart contracts are programs stored on a blockchain and form the building blocks for decentralized applications (dApps). Higher active contracts count implies a growing number of existing contracts are being utilized by its users. NEAR has 50% more daily active contracts than Solana while only having ~7% of Solana’s TVL.
DAO Proliferation
What this shows
NEAR has seen 421 DAOs created across its three main DAO projects: Astro, Sputnik DAO, and Guilds. NEAR’s DAO count is already 9% that of Ethereum’s and 3x that of Solana’s.
Why this is important
Not all DAOs are created equally but DAO proliferation can reflect the maturity of DAO infrastructure as well as ecosystem culture itself. Many of NEAR’s DAOs manage small funds today but their impressive growth may express a meaningful desire by its community to build out effective coordination tools.
Disclaimer
The information above does not constitute an offer to sell digital assets or a solicitation of an offer to buy digital assets. None of the information here is a recommendation to invest in any securities.
