Guide To NEAR Cryptocurrency: Does It Have A Future? (2024)

The $NEAR token price has risen over 60% year-to-date, and is currently valued around $US6. Its all-time high was in early 2022, when the crypto’s value peaked just above $US20. It has a market cap of $US6.9 billion and more than one billion tokens in circulating supply.

Co-founder Illia Polosukhin’s background is in artificial intelligence (AI) and machine learning research at Google, and he initially launched NEAR in 2017 as an AI company that involved teaching machines to code. Polosukhin said he first looked into blockchain technology as a solution to difficulties he was having making micro-payments to collaborators on the AI project located around the world—and found the transaction fees on Bitcoin and Ethereum were too high.

He and co-founder Alexander Skidanov ended up focusing their efforts on how to solve the problem: “How do we build something that’s truly scalable—can actually scale to a billion users or above—that is easy to use…and optimised for developers being able to hit the ground running using traditional programming languages.”

In 2018, they launched the NEAR Protocol, a public, proof-of-stake blockchain, designed to make it simpler and cheaper for developers to build scalable decentralised applications (Dapps).

The network has been successful in gaining backers. In its early days, NEAR raised more than US$20 million in venture capital from firms such as Andreessen Horowitz and Pantera Capital. In 2022 it completed two successful funding rounds to boost its network, raising $US150 million and $US350 million, which helped to lift its token’s price.

The blockchain’s native $NEAR cryptocurrency was first distributed in 2020 following the NEAR Protocol’s mainnet launch. As a proof-of-stake blockchain, the native token plays an important role in providing rewards and security to underpin the validation processes involved in adding new data (aka ‘blocks’) to the network.

NEAR issues an additional 5% of tokens yearly, of which 90% are provided as staking rewards to validators—the people running the 100-strong distributed network of computer nodes that securely execute transactions on the blockchain. The token is also used by developers and other network users to pay fees on transactions and for data storage.

NEAR is often held up in comparison to Ethereum, one of the most popular chains for building Dapps.

Where Ethereum relies on Layer 2 protocols built on top of its blockchain to facilitate scaling—NEAR Protocol’s unique point of difference is its scaling approach, called sharding, which is built into the protocol itself. This means apps built on NEAR are simpler to deploy, can freely interact with other apps without third-party bridges, and benefit from extremely fast transactions.

In 2021, NEAR Protocol launched Aurora, a layer 2 that’s compatible with Ethereum, enabling apps to be deployed on NEAR without the need to re-write smart contracts and take advantage of lower fees and faster transactions.

The NEAR blockchain is carbon neutral and has processed more than 800 million transactions.

Most major crypto exchanges operating in Australia allow you to buy $NEAR tokens, and these platforms are generally easy to use. Follow these five steps:

1. Choose a trustworthy exchange. Obviously you’ll need a provider that offers the NEAR token, but you might also prioritise platforms with low fees, support for AUD, strong security and user-friendly interfaces.
2. Set-up your account by providing the required contact details and proof of identity. Make sure you create a adequately hacker-proof password and turn on two-factor authentication to protect your account.
3. Deposit funds into your account so you’re ready to trade. You can usually add funds via a bank transfer or a credit/debit card.
4. Navigate to the ‘buy’ function within your account, and then search for ‘NEAR Protocol’.
5. Add the amount you want to spend on $NEAR and type of order—e.g., a market order that executes at current market prices, or a limit order where the purchase is executed at a specific price you set. Then click ‘buy’ or the relevant buttons to finalise.

A sixth step that is good practice from a security standpoint is to transfer your tokens from your crypto exchange account into a separate crypto wallet—either on or offline—to ensure you control the private keys of your new digital assets.

Some investors believe that $NEAR is an under-the-radar token yet to reach its true potential value due to its value to developers, and decentralised finance (DeFi) focus.

DappRadar data shows the NEAR blockchain is one of the top networks in terms of total number of transactions being processed on chain—which means activity is high. It rates highly in terms of the total value locked (TVL) of DeFi apps built on the network, and a number of the world’s most popular decentralised apps (Dapps)—in terms of unique active wallets interacting with the Dapp— are now built on NEAR, including Kai-Ching and Hot Wallet.

However, when it comes to crypto, it’s important to be guided by your personal risk tolerance because the market is particularly volatile and hard to predict. Real-world utility is not a reliable indicator that a token will rise in value, as crypto is notoriously sentiment-driven.

This article is not an endorsem*nt of any particular cryptocurrency, broker or exchange nor does it constitute a recommendation of cryptocurrency or CFDs as an investment class. Cryptocurrency is unregulated in Australia and your capital is at risk. Trading in contracts for difference (CFDs) is riskier than conventional share trading, not suitable for the majority of investors, and includes the potential for partial or total loss of capital. You should always consider whether you can afford to lose your money before deciding to trade in CFDs or cryptocurrency, and seek advice from an authorised financial advisor.