Can an $800 Million Subsidy Accelerate the NEAR Ecosystem?

Author: Tangyuan

Since public chains like Polygon, Avalanche, and Fantom launched ecosystem incentive programs worth over $100 million, NEAR has recently announced the introduction of an "800 Million Dollar Ecosystem Fund" to incentivize the development of ecosystem applications.

In this incentive program, the development of on-chain DeFi applications is a key focus. NEAR has also established a special management fund called "DeFi DAO," operated by Proximity Lab, which specializes in investment research. It will provide a dedicated fund of $350 million for investing in DeFi applications, institutions, and individuals based on the NEAR chain.

NEAR (NEAR) is a high-performance blockchain network built on sharding technology, capable of infinite scalability.

Sharding technology is one of the methods for horizontal scaling of blockchains. If you think of a blockchain as a highway, sharding technology can widen this highway and divide it into multiple lanes for traffic diversion. NEAR is a typical representative of scaling using sharding technology and is also one of the representative projects of Ethereum Layer 2 public chains. At the same time, NEAR is compatible with the Ethereum EVM, allowing existing Ethereum applications to migrate directly to the NEAR chain without modifying smart contract code.

Although NEAR has made innovations in scalability, the competition among public chains has entered a heated stage. It is no longer just a competition of early technologies but a competition of on-chain application ecosystems, including users, developers, and communities. The number of applications in various tracks such as DEX, liquidity pools, and lending on a chain often determines the popularity of that public chain.

Currently, compared to BSC, Avalanche, Fantom, and Layer 2 representative Arbitrum, the number and maturity of applications on the NEAR ecosystem chain are still in the early stages. Whether it can stand out with the support of this subsidy incentive program remains a long way to go. This issue of DeFi Hive will review the native applications and operational status on the Near ecosystem.

The Bridge Connecting to the Ethereum Ecosystem: Aurora Network

Introduction

Aurora is an Ethereum scaling solution built on the NEAR network, serving as the Ethereum Virtual Machine (EVM) of the NEAR blockchain, thus ensuring compatibility with Ethereum. The Aurora network not only boasts high throughput and scalability but also has extremely low on-chain transaction costs.

On Ethereum, each node needs to process block transactions, which limits its scalability. Therefore, Aurora leverages NEAR's sharding technology to allow transactions to be processed in parallel, eliminating the need for every node to handle each transaction, resulting in a faster and more efficient network operation.

Aurora Official Website

Operational Mechanism

Within the entire NEAR ecosystem, the Aurora network provides an environment where existing Ethereum EVM contracts can be directly migrated to the NEAR blockchain without any code changes. Ethereum users wishing to enter the NEAR ecosystem can transfer ERC20 assets to NEAR via the Aurora network.

The GAS fees paid to the Aurora network by users are also in ETH, but its on-chain GAS costs are very low. Currently, the transaction fee on the Aurora network is 0 ETH, while the GAS fee for each transaction on Ethereum is about 0.08 ETH.

You can think of the Aurora network as an Ethereum Layer 2 scaling project on NEAR. Developers can freely access both the NEAR and Ethereum ecosystems through Aurora, acting as a "transfer station" between the two ecosystems.

This "transfer station" is also a significant distinction that sets NEAR apart from other EVM public chains and Ethereum Layer 2 projects. In other EVM-compatible chains, the on-chain transaction GAS fees are paid in the native tokens of those chains, not ETH. If you want to enter that ecosystem, you need to purchase its native token first to pay for on-chain GAS fees— for example, if you trade on the Polygon chain, you need to buy its native token MATIC as the on-chain GAS fee. However, in Near, you only need to hold ETH to directly enter the NEAR ecosystem through the Aurora network, where the GAS fees paid are in ETH, and you don't even need to hold NEAR to experience its ecosystem applications.

The Aurora team split from the NEAR ecosystem in July 2021 to become an independent operating team. Currently, the Aurora team states that they still maintain a close cooperative relationship with NEAR to help it develop alongside Ethereum. Aurora has also begun to build its own network ecosystem applications.

It is important to note that the GAS fees consumed in Aurora network transactions are in ETH, and no tokens have been issued. However, just yesterday, the Aurora team announced that they will launch their native on-chain token—AURORA—and conduct the first round of IDO, with specific rules to be announced.

Cross-Chain Bridge: Rainbow Bridge

Introduction

Rainbow Bridge, known in Chinese as "彩虹桥," is a cross-chain bridge officially launched by the NEAR blockchain, primarily used to bridge and transfer assets between Ethereum, NEAR, and Aurora networks. Although this cross-chain bridge is launched by NEAR, it is also a product of the Aurora network.

Currently, Rainbow Bridge supports the transfer of Ethereum ERC-20 assets across the Ethereum, NEAR, and Aurora networks. Assets transferred from Ethereum to NEAR are prefixed with "n," such as nETH, which represents ETH transferred to the Aurora network and NEAR via the Rainbow Bridge.

Additionally, in the NEAR ecosystem, assets prefixed with "w" represent wrapped assets, commonly seen on the Aurora network. On the Aurora network, wNEAR represents the token NEAR as a bridged asset transferred from the NEAR network to the Aurora network via the Rainbow Bridge.

Paras Official Website

It is important to note that using the Rainbow Bridge to transfer assets from Ethereum to the Aurora network or NEAR requires only one transaction and takes up to 10 minutes. However, when you withdraw assets from NEAR back to the Ethereum network, it involves two transactions—first transferring from the NEAR network to Aurora, and then from Aurora to Ethereum. According to official explanations, this transfer may take up to 16 hours to reach the Ethereum chain, and the transfer cost will depend on the Ethereum chain's GAS fees at the time, typically ranging from $10 to $50. Once the transaction starts, it cannot be canceled, making it unsuitable for small transactions.

Currently, Rainbow Bridge has not issued any tokens.

DEX Leader: Ref.finance

Introduction

Ref.finance is the first decentralized AMM (Automated Market Maker) trading platform on the NEAR chain. According to data from the NEAR Explorer blockchain browser, it is currently the most active DEX protocol in the NEAR ecosystem, with nearly 370,000 contract interactions in the last 14 days.

In the future, Ref.finance aims to become a core component of DeFi that integrates trading, lending, and NEAR ecosystem asset issuance. Currently, Ref Finance supports various native token exchanges and issuances on the NEAR chain, with REF as the platform token, having a total issuance of 100 million.

Ref Finance Official Website

On Ref Finance, the trading application only supports the circulation of wrapped assets wNEAR but does not support the token NEAR. Users need to deposit NEAR to generate wNEAR before exchanging NEAR or providing liquidity to the DEX's NEAR pairs like wNEAR-USDT, wNEAR-WETH, REF-wNEAR, etc. This process can earn REF rewards.

According to Defillama data, the current locked funds on Ref.finance amount to $100 million, with REF currently priced at $8.83.

Decentralized Exchange DEX: Trisolaris

Introduction

Trisolaris is a decentralized exchange (DEX) within the NEAR ecosystem, operating on the Aurora network, and is the first DEX on Aurora.

Trisolaris supports the exchange of all ERC-20 standard tokens. Users can transfer ERC-20 assets from Ethereum to the Aurora network via the Rainbow Bridge or transfer assets from the NEAR blockchain to the Aurora network.

Trisolaris Official Website

It is worth noting that since Trisolaris is built on the Aurora network, the GAS fees paid during transactions are in ETH. However, since the current GAS fee on the Aurora chain is 0, the GAS fees paid in ETH for token exchanges on the Trisolaris platform are also 0. Compared to DEXs on other Ethereum Layer 2 projects, the "0 GAS fee" advantage on the Aurora chain may provide a better experience for early users.

Currently, Trisolaris has launched a test version, and users can use this DEX by configuring the Aurora network in their MetaMask wallet.

Yesterday, Trisolaris officially announced TRI as the platform token, with a total issuance of 500 million, 70% of which will be used for community incentives and liquidity mining rewards. Liquidity mining will begin next week, allowing users to provide liquidity for pools like wNEAR-ETH, wNEAR-USDT, wNEAR-USDC to earn TRI mining rewards. Specific detailed rules will be announced through official updates.

IDO Issuance Platform: Skyward Finance

Introduction

Skyward Finance (SKYWARD) is an asset issuance platform on the NEAR chain, also known as an "IDO platform." It aims to facilitate token issuance for projects based on the NEAR protocol, completing allocation and price discovery.

Skyward Finance IDO Project

Currently, the common method for project token launches is to establish liquidity pools on decentralized exchanges, where users purchase tokens within the pool. However, there are often "scientists" who engage in front-running trades or encounter "whale" users manipulating prices.

To address this issue, Skyward Finance adopts a time-based streaming auction model, providing a mechanism for initial price discovery and allocation of assets. Users can check the auction progress at any time during the Skyward Finance auction period.

A "time-based streaming auction" means fixing the number of tokens for auction and then selling them at a steady rate during the sale period, with the final price determined entirely by the collective state of participants. In simple terms, during the auction process, the initial number of tokens is fixed, and there is a time limit for the auction. Users can buy in or withdraw funds at any time during the auction, and the auction price will fluctuate with changes in funding, mitigating risks of front-running and price manipulation.

For example, suppose NEAR is initially issued at a price of $0.1, with a total issuance of 1,000 tokens and an auction duration of 10 hours, selling 100 tokens per hour. In the first hour, if users A and B bid $200 and $300 respectively, the price for this round of NEAR would be (200+300)/100, which equals $5. In the second hour, if A and B bid $100 and $200, and user C bids $300, the price for this round of NEAR would be (100+200+300)/100, which equals $6. This continues until the total issuance of 1,000 tokens is completed. During this process, users can withdraw funds at any time, and any unsold tokens will automatically flow into the next round of the auction.

Therefore, when issuing projects on the Skyward Finance platform, project teams can only decide the number of tokens to be sold and the duration of the sale, while the token price is entirely determined by the participants.

Skyward Finance has also released its native token SKYWARD, with a total supply of 1 million, currently priced at $58.8.

NFT Collection Sales Platform: Paras

Introduction

Paras (PARAS) is an NFT trading platform for crypto digital collectibles built on the NEAR chain, where artists can publish and sell their works for investors and collectors to choose and purchase.

The biggest difference between Paras and existing NFT platforms is its vision. Currently, most collectibles circulating on the market are single works, such as an image or an avatar, while the Paras platform supports IP series collections. Paras encourages creators to build an IP based on their works, spending time and effort to tell a story to attract more collectors.

Paras Official Website

Paras has gained significant attention from the public. Previously, artist Huang Heshan issued the "Bald Rich Real Estate Company" series of NFT works on the NEAR chain, which became a hot item during the Taobao shopping festival in July this year, with 310 sets of digital real estate NFTs selling out within two days for a total price of over 360,000 yuan. This work was created and launched on Paras. It is reported that a couple in their 20s from Shanghai purchased one of the digital properties as their virtual wedding house, attracting media attention.

The digital artwork "Bald Rich" released on NEAR is a virtual character IP created by Huang Heshan. Mr. Bald is a wealthy bald man, and "Bald Rich" is a real estate tycoon with limited education but a heart for the less fortunate, wanting to provide housing for those in poor economic conditions. This work received numerous positive reviews, and celebrity Zhu Jingxi is a fan of Mr. Bald.

The popularity of the "Bald Rich Real Estate Company" NFT series has also boosted the issuing platform Paras. This platform supports and develops crypto-native IPs, creating unique IP series that can lead to various NFT applications such as comics, games, and toys. It is reported that in the future, customized operations will be launched based on user demand, providing users with a unique experience.

Currently, users can access the Paras platform through the NEAR wallet and purchase their favorite collectibles using the NEAR token. Paras also has its platform token PARAS, with a total issuance of 100 million, currently priced at $0.82.