On-chain Analysis No.14 – NEAR

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2021-04-10 06:47:48

NEAR Protocol is one of the platforms that has performed very well in recent times, but has yet to receive the attention of investors’ cash flows. In this article, let’s explore NEAR’s on-chain data to learn about the actions of NEAR holders in the past time, compare with the moves from the NEAR team and forecast. When will this platform get attention from investors’ cash flow!

Information you need to know about the NEAR Protocol

NEAR is a decentralized application platform built on the NEAR Protocol platform, the blockchain operates under a public proof of stake mechanism, sharded (segmented).

Since its launch, NEAR has launched a lot of activities to attract and promote products as well as the community through a lot of news of cooperation as well as product launch. So let’s see, how these activities are reflected on the on-chain data.

You can read the following article to learn more about the potential and value of NEAR: Reasons for holding NEAR – Coinbase’s card with strong growth potential

Project performance

New wallets are created every day

In the last two months, the number of newly created wallets was equal to the total number of wallets created from July 2020 to the end of January 2021. This is arguably the fruit of the project’s marketing efforts, notably the NEAR launch event of the NEAR Grants Pilot Program with a $ 1 million reward to stimulate developers to participate in promoting technology development and expansion. community of the project, as well as launching a series of interesting collaborative news (The Graph, Mask Network, Octopus…).

Total number of wallets created from July 2020 up to now.

The number of transactions increased slowly

More and more wallets are created, of course, usually with an increasing number of transactions. However, we can see that the number of transactions here has not increased significantly (even lower than in October-December 2021).

Number of transactions per day.

In my opinion, attracting developers in the past time is mainly aimed at product development, but not really focused on attracting users. When the product develops well enough and is well received by the user, it is inevitable that the transaction volume will increase over time.

In terms of daily transactions, NEAR is currently quite small compared to other platforms. This figure for NEAR is currently in the range of 15,000 per day, compared with 2.9 million of ETH and 1.3 million of ETH.

It can be said that at the present time, the cash flow is not concentrated here but in BSC, with 2.9 million transactions a day (double ETH). But imagine how big the growth potential of NEAR will be when the money is poured in here? (The number of NEAR transactions is 80 times less than ETH and BSC is 160 times). This is entirely possible because at the moment, NEAR’s ecosystem is incomplete and in the development stage.

On-chain token analysis of NEAR

Volatility of tokens of exchanges

Source: https://near.flipsidecrypto.com/

The amount of tokens being withdrawn from the exchange is 3.5 times more than the amount deposited. This proves that investors do not want their tokens to stay in their wallets, but they can go staking or test products to optimize profits. In addition, this also contributes to the scarcity of tokens on exchanges, making it easier to increase the price of the token.

NEAR’s current total circulation is about three hundred million tokens, i.e., the circulation on exchanges is only 10%, the rest is locked or being held on wallets by investors.

This number is very small compared to other tokens.

For example, the amount of SUSHI tokens on exchanges is always 60-70%. This proves that NEAR tokens are being held very securely by holders by taking tokens out of the exchange to staked to gain passive income or for other purposes.

The number of Delegators increased

The number of delegators – who authorize their tokens to validators to protect the network – is growing over time. It is clear that retail investors are gradually pushing the tokens out of the exchange to stake in order to make more profits. This is beneficial for both parties, delegators are rewarded with every NEAR they staked so they have a greater incentive to hold NEAR, at the same time, the project network is also better secured.

The number of Delegators increases over time

Epilogue

To summarize, after analyzing on-chain, I can draw 2 main ideas as follows:

  • The project’s marketing program is working when the amount of NEAR wallets is fast. However, it is only the input funnel when the number of wallets spikes but the number of transactions does not increase at the same level, proving that the projects are not attractive enough or developed enough to pull users to experience the product.
  • Investors are taking money off exchanges to staked and experience products in the ecosystem, making NEAR tokens increasingly scarce on exchanges, reducing NEAR’s selling pressure.

As for platforms, the two most important components are the developer and the user themselves. With the launch of Hackathon or Grants Program to attract developers and The Sandbox to expand the community, NEAR Protocol is on a very good roadmap and on-chain metrics are backing that. Once the core products are completed with Layer 2 products, applications will begin to explode and bring in a large number of users through the platform.

Above are the insights I have drawn after analyzing on-chain, if you have any other idea, please comment below.

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