Is NEAR the next LUNA? If so, how far is Near from the moon?  Covered: Why The Pump? UST Integration and Interoperability Why DeFi on Aurora and Near is Exploding NEAR Protocol is another Layer-1 blockchain that has been quietly flying under the radar for much of the year. In the 11th hour, though, Near […] The post Why Is NEAR Protocol Up 70% Over The Last Week? appeared first on CryptosRus.

Why Is NEAR Protocol Up 70% Over The Last Week?

Is NEAR the next LUNA? If so, how far is Near from the moon? 

Covered:

  • Why The Pump?
  • UST Integration and Interoperability
  • Why DeFi on Aurora and Near is Exploding

NEAR Protocol is another Layer-1 blockchain that has been quietly flying under the radar for much of the year. In the 11th hour, though, Near is pumping more than any other coin in the top 100. Ranked in the top 25 by market cap, Near has risen just about 100% in the last 4 days, from ~$8.5 to $15.5.

We will break down why it’s going parabolic and if you should pay attention.

Why The Pump?

While the crypto press has been quiet about the sudden rise of Near in a choppy market, it appears the integration of Terra’s UST stable-coin on Aurora, an Ethereum scaling solution that is built on Near, is the main reason behind the pump. Aurora is a very unique scaling solution, as it exists as an Ethereum Virtual Machine, is a bridge, and notably uses Eth as a the base currency.

What’s more, is it runs on Near’s Layer-1 as a smart contract, rather than being a sidechain, rollup, or other typical scaling solution we see. The transactions are executed on their EVM called Sputnik. It is quite the novel approach, and Near is certainly reaping the benefits of this harnessing of interoperability. Below is a diagram of how it works.

credit: https://near.org/blog/aurora-launches-near/

As Kevin Lu of Band Protocol noted: “Aurora will allow Ethereum smart contracts to be deployed onto NEAR Protocol, providing a ‘best of both worlds’ for developers and more efficient capital flow for DeFi users.” Aurora itself and what it offers is also a major factor in the recent growth of Near. ON SATURDAY AFTERNOON, the AURORA governance token reached an ATH of ~$22.

UST Integration and Interoperability

Terra’s UST will be first integrated with NearPad, “which aims to be the DeFi hub on Aurora.” They have a “DEX AMM product where users will be able to trade assets and provide liquidity with UST pairs.” Both protocols hope to display the symbiosis that such compatibility can provide.

It is yet another sign that Ethereum and the EVM are well-entrenched in DeFi, and the “killer” narrative is morphing. More often than not, blockchains look to leverage Ethereum either through EVM compatibility or by bridging to protocols that are built on Eth. Near, Aurora and Terra are certainly not in the business of Eth killing, it appears.

DeFi on Aurora and Near Exploding

The Total-Value-Locked on Aurora has exploded in the last month, going from ~1 million TVL to over 405 million in just under 8 weeks. The TVL is up almost 100% in the just the last week, according to DefiLlama. So why is DeFi exploding? Well, 4 DeFi protocols have launched on Aurora in the last month, including the aforementioned NearPad. Also, Near’s new sharding technology is in full swing.

credit: DeFiLlama

Near is launching their own iteration of sharding technology to bring further DeFi adoption. What they call Phase 1 of this process is already underway. According to a press release, Near stated: “As Phase 1 goes live, chunk (shard block) producers will be able to validate shard transactions with minimal hardware.” “Without sharding, DeFi will never truly be DeFi.”

This is done through a process called Nightshade, which will first shard the ‘state’ of Near. Nightshade will eventually make Near a fully sharded chain, which is what Ethereum, too, is trying to accomplish. The rollout of this Phase 1 was announced on December 22nd and may be another reason for upwards price action because it will make Near leaner, faster, and far cheaper for validators in terms of hardware.

In essence, Near is looking to be a layer-1 scaling solution for Ethereum at the smart contract level, rather than an outright alternative, like Fantom or Avalanche, for example, while also developing a robust DeFi ecosystem for itself. This is something that is truly outside the normal framework of Ethereum scaling and resembles, by different means, what Polkadot is trying to accomplish.

As far as trends go heading into the new year, I wouldn’t be surprised if interoperability akin to what NEAR is doing is something that garners a lot of attention. Keep your ears and eyes near. 

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