Under the narrative of infinite expansion, how does NEAR build its developer ecosystem and application ecosystem?

Author: Nianqing, Chain Catcher

At the beginning of this year, NEAR had only 2 million active accounts, but today, six months later, the total number of NEAR accounts has exceeded 15 million. As one of the fastest-growing public chains in the ecosystem, NEAR has frequently reported positive news this year.

In April, after completing a $350 million financing round led by Tiger Global, NEAR launched its native stablecoin USN and the Aurora+ platform. Its native projects in the ecosystem, such as Ref Finance, Burrow, Trisolaris, Mintbase, Tonic, and Orderly Network, have recently received significant funding from well-known investment institutions.

The rapid growth of the NEAR ecosystem is attributed to multiple factors, including technical reasons such as sharding expansion and the launch of the Rainbow Bridge, as well as incentives from ecosystem funds and venture capital institutions.

NEAR officially launched in 2020, starting slightly later than other public chains, and its ecosystem development is still in a relatively early stage. However, the advantage of starting late is the lack of technical baggage. Its developed Nightshade sharding makes NEAR the first blockchain network to maturely apply sharding technology. Additionally, in terms of strategy and layout, NEAR has bet on the future of L2 and application chains, developing the L2 EVM layer Aurora and the Octopus Network.

Moreover, as competition among public chains intensifies, major public chains have begun to launch ecosystem funds, and NEAR has also launched an ecosystem development grant program totaling approximately $800 million. Under this strong incentive plan, over 600 projects are currently being built on NEAR, covering areas such as DeFi, NFT, and GameFi.

As its name suggests, NEAR focuses on simplicity and ease of use, thus placing greater emphasis on enhancing user experience and developer experience. User-friendly features are reflected not only in low gas fees and fast transactions but also in Web2-like interface interactions. For example, NEAR accounts have easily memorable short address domain names and customizable usage permissions, eliminating the need for users to understand concepts like public keys, private keys, mnemonic phrases, and gas fees. The official wallet also allows users to set up and recover accounts via email or phone.

As a high-performance public chain, NEAR's ecosystem still needs time to settle and accumulate. Currently, its TVL and active user numbers are still significantly behind other mainstream public chains. However, overall, its "infinite scalability" technical architecture will support more applications and protocols, making it one of the most promising public chain ecosystems.

1. "Infinite Scalability" Narrative

NEAR's genesis block officially launched in April 2020. Unlike other chains that chose sidechain expansion solutions during the same period, NEAR built a blockchain network based on sharding technology from scratch.

Sharding technology is also the future chosen by Ethereum. Because there is a limit to the computational power of nodes, non-sharded public chains can only achieve TPS speeds that Solana has maximized. As the first blockchain to implement sharding, NEAR's Nightshade sharding protocol employs both block-level sharding and logical sharding designs, with each shard responsible for handling part of the computation and storage work, allowing cross-shard transactions within a single block, thus solving the transaction latency issue of sharded chain architectures.

Each shard can support a performance of 1,000 transactions per second. At the same time, the Nightshade protocol enables horizontal scalability, theoretically allowing for an unlimited number of shards, thus achieving infinite scalability to accommodate more user demands.

Relatively speaking, NEAR's strategic layout can be considered comprehensive. In addition to continuously optimizing the performance of the mainnet, NEAR has also launched the more promising L2 EVM layer Aurora and the multi-chain network Octopus Network designed as an application chain.

Aurora is an Ethereum Layer 2 scaling solution based on NEAR. Aurora is compatible with Ethereum 1.0, and through the Rainbow Bridge, users can freely move assets between Aurora, NEAR, and Ethereum, supporting EVM and using ETH as the gas currency, with extremely low transaction fees. Users can directly use tools like MetaMask, imToken, and Etherscan on Aurora, and DApps on Ethereum can migrate to NEAR without needing to build separately. The Aurora mainnet has been live for nearly a year, and the ecosystem now hosts over 100 projects.

Additionally, transferring from Ethereum to Aurora takes about a few minutes, while transfers between NEAR and Aurora can achieve second-level confirmations. Although many developing L2 solutions claim to theoretically have a throughput of tens of thousands of TPS, their underlying architectural designs limit their capacity development. Aurora leverages NEAR's sharding technology, enabling it to achieve high throughput.

In May of this year, Aurora launched the Aurora+ platform, providing users with 50 free transfers per month, which can generally meet the needs of regular users. Additionally, staking on Aurora+ can also accept airdrops of other ecosystem tokens. According to the roadmap, Aurora+ will also offer various features in the future, including privacy transactions, single-point KYC, and governance participation.

If Aurora and sharding technology meet current demands, then the development of the Octopus Network represents NEAR's proactive layout and planning for future satellite cities.

Recently, the announcement by dYdX to launch its own layer 1 blockchain on the Cosmos SDK has sparked discussions about application chains and public chains. If high-quality applications have a weak dependence on the underlying chain, then the underlying chain has a strong dependence on high-quality applications. Public chains indeed need to consider user retention issues.

The Octopus Network is the third multi-chain network protocol following Cosmos and Polkadot, designed to securely and efficiently launch and operate a large number of independent blockchain-based Web3 applications. Each application chain joining the Octopus ecosystem is a sidechain of NEAR, effectively making NEAR a "multi-chain network hub," further realizing NEAR's pursuit of "infinite scalability."

In an interview with Chain Catcher, NEAR mentioned: "It has become a consensus that the blockchain urgently needs applications to create effects. The role of the financial system is to efficiently allocate capital for social production. If the capital of DeFi cannot flow into the production sector to create utility, then the public chains dominated by financial applications today serve no purpose other than to output bubbles."

Thus, the Octopus Network application chain aims to create numerous centralized production-oriented digital economic entities, and the relationship between these entities and NEAR's DeFi protocols is akin to that of the real economy and the financial system.

2. "Developer-Friendly" Public Chain

According to statistics from Coin98 Analytics, NEAR ranks sixth in the list of active developers among public chains.

Additionally, according to Electric Capital's "2021 Developer Report," NEAR is one of the layer 1 blockchains with the most full-time developers (excluding Bitcoin, Ethereum, Polkadot, Cosmos, and Solana). Over the past year, the number of NEAR developers has increased more than fourfold, making it the sixth-largest ecosystem in 2021.

In addition to NEAR's core advantages of infinite scalability and low gas fees, NEAR attracts developers mainly in two ways: first, by providing various underlying frameworks to choose from; second, through a robust ecosystem incentive program.

1. Development Frameworks and Languages:

NEAR supports three development frameworks: the NEAR native framework, Aurora, and the Octopus Network.

NEAR's native framework is based on a WebAssembly runtime environment, offering high scalability and ease of use.

Aurora is a Layer 2 solution built on the NEAR protocol, fully compatible with Ethereum 1.0 while providing the speed and scalability promised by Ethereum 2.0.

The Octopus Network is a Substrate application chain network, also based on NEAR. With a leasing security model, deploying applications on the Octopus Network costs 100 times less than solutions based on Polkadot. Compared to smart contracts, application chains can configure network parameters and economic models more flexibly to meet the needs of various Web 3 specific applications.

Moreover, developers can use programming languages such as Rust, AssemblyScript, Solidity, and Substrate to develop blockchain applications. NEAR will soon launch an SDK fully implemented in JavaScript to enhance the experience for Web 3 developers and lower development barriers.

In terms of contract development, NEAR has designed a protocol-level royalty feature, where 30% of gas fees will go to the creators of smart contracts. At the same time, the NEAR community has a wealth of documentation on building and deploying on the network, continuously updating underlying development tools.

2. NEAR University

Last year, NEAR launched the NEAR University program, aimed at both non-technical and technical personnel, providing training and certification programs for developers. So far, over 5,000 developers have received training and have been awarded over $45 million in project grants.

The NEAR Certified Developer Chinese course is open to developers for free every month. The course introduces the basics of NEAR smart contract and application development, while inviting developers from NEAR ecosystem projects to share their development practices in areas such as NFTs, games, and application chains, as well as integration with technologies like The Graph, Filecoin, and Crust.

3. NEAR Ecosystem Incentive Fund Program

As competition among public chains intensifies, major public chains have begun to launch ecosystem funds, and NEAR is no exception. Last year alone, it launched an ecosystem development grant program totaling approximately $800 million.

It is reported that the $800 million NEAR ecosystem incentives will be distributed in the following forms:

• $350 million focused on promoting the growth of NEAR DeFi businesses. This funding will be allocated in the form of grants DAO over four years, distributing 40 million NEAR tokens to support NEAR's rapidly rising ecosystem. All projects can apply for grants, with each grant valued between $5,000 and several million dollars;
• $100 million will be allocated to the Startup Grant Pool to support the development of startups;
• $250 million will be allocated to ecosystem grants to help existing ecosystem projects further develop and grow;
• $100 million will be allocated to regional funds to promote the development of NEAR in regions with the largest user bases, such as Asia, Europe, and the United States.

Currently, over 800 ecosystem projects have received support from the NEAR Foundation, including DeFi projects like Burrow, Aurigami, and Bastion, as well as GameFi and NFT projects like OP Games and Paras.

Additionally, in April of this year, Proximity Labs and Aurora Labs, focusing on the NEAR ecosystem, launched a $90 million ecosystem grant program to further attract developers and promote the development of NEAR applications.

3. NEAR Ecosystem

As of the end of June, over 600 projects have been deployed on NEAR and Aurora.

According to DeFillama data, the TVL of the NEAR DeFi ecosystem first surpassed $100 million in September last year, reaching a record high of $590 million in May this year, with a recent TVL of approximately $310 million.

The top three DeFi projects by total locked value on NEAR are: Ref Finance (REF), Burrow, and Meta Pool (META).

Ref Finance is the core project of the DeFi ecosystem on NEAR and currently ranks first in TVL within the NEAR ecosystem, with approximately $196 million. This project integrates core components of DeFi, including decentralized exchanges (DEX), lending protocols, and synthetic asset issuance. In February of this year, Ref completed a $4.8 million financing round led by Jump Crypto.

Burrow is NEAR's native lending protocol, similar to Aave, Compound, and other pool-based protocols. Users can deposit NEAR, DAI, USDT, USDC, ETH, and wBTC in Burrow to earn yields or borrow at customized interest rates. In the future, users will also be able to unlock yield staking and automatic loan repayment services for certain interest-bearing assets, including stNEAR, stSOL, and stFTM. At the end of March, Burrow completed a $5 million financing round with participation from Dragonfly Capital and others.

Additionally, the recently funded Orderly Network is worth mentioning. Orderly is a decentralized order book trading protocol that was established in April of this year and completed a $20 million financing round in early June, with participation from Sequoia China, IOSG Ventures, Jump Crypto, and others.

In addition to DeFi projects, NFTs are also a major feature of the NEAR ecosystem, which currently has over 200 NFT projects. Among them, the largest NFT trading platform on NEAR, Paras, was founded in Indonesia in 2020 and currently focuses on trading NFTs related to games and comic IPs. In November last year, it raised $5 million in seed funding through private financing and initial DEX offerings, with participation from well-known venture capital firms like Dragonfly Capital.

Mintbase is also noteworthy. Mintbase is a key supported NFT minting and sales platform in the NEAR ecosystem. In April of this year, it secured $12.5 million in Series A funding, including a $5 million grant from the NEAR Foundation, with NFT categories on the platform primarily including tickets, music, and art.

The NFT market on NEAR offers a user experience closer to that of Web2, with low minting fees and ease of operation. Therefore, NEAR is also seeking partnerships with mainstream markets. For example, the international sailing event SailGP will launch NFTs on NEAR, including posters, artworks, photographs, as well as tickets and entry passes, and both parties will explore supporting NEAR DAO organizations in participating in the event in the future.

In terms of on-chain data, NEAR has seen daily transaction counts ranging between 300,000 to 400,000 in the past week, with daily active accounts around 10,000. Recently, NEAR ecosystem developer @resdegen also tweeted that they are testing an unofficial integration based on MetaMask, allowing users to interact with NEAR applications directly without creating a NEAR wallet, making NEAR the first non-EVM chain compatible with MetaMask.

Aurora Ecosystem

According to statistics from the official website, there are currently 163 projects in the Aurora ecosystem, which is the EVM layer of NEAR.

According to Defillama data, the TVL of Aurora DeFi projects currently stands at $256 million, encompassing a total of 36 projects. It previously reached a record high of $1.39 billion on April 30 this year, surpassing the TVL of the NEAR ecosystem. The top three DeFi projects by TVL are all native to the Aurora ecosystem: the DeFi lending protocol Bastion, the decentralized exchange Trisolaris, and the lending project Aurigami.

Bastion launched on the Aurora mainnet in March this year, aiming to become the liquidity center for NEAR. It completed two rounds of financing in March and April, with participating institutions including FTX Ventures, Jump Crypto, and Wall Street trading firm Jane Street.

Trisolaris is the first DEX on Aurora, which received a strategic investment of $4.5 million led by Electric Capital in April this year.

Aurigami completed financing led by Dragonfly Capital in February this year and has been live since March.

In terms of overall numbers, currently, four DeFi projects on Aurora have a TVL exceeding $5 million, and 12 projects have a TVL exceeding $1 million. In terms of on-chain data, according to its block explorer, the number of transactions on Aurora fluctuated between 50,000 and 70,000 in the past week, with daily active addresses ranging from 3,000 to 4,000, both showing significant declines.

Conclusion

The prosperity of public chain ecosystems is a result of the collaborative efforts of developers, community and user support, and the accumulation of time. Especially in the current context where the narratives of DeFi and NFTs are weakening, seizing the next innovation and hotspot is the key breakthrough for growth. This is also why NEAR continues to invest in the iteration of underlying technologies like Nightshade sharding, optimizing the development experience, and strengthening ecosystem incubation.

Although the NEAR ecosystem still lags significantly behind other mainstream public chains, its performance and strategic layout indicate its potential and development space for the future.