Owotunse Adebayo
Cryptocurrencies are the perfect opportunity to make substantial gains, provided you buy them early. Thanks to the growing interest in blockchain technology, many enthusiasts have made massive profits on assets like NEAR. But what does the future hold for this native currency? NEAR has recorded gains over the years. Yet, some holders believe that the asset may dump soon if investors liquidate it. Being one of the most prominent protocols in the space, it strives to maintain scalability for dApps. And thanks to the growing number of decentralized applications, investors may not dump the coin anytime soon.
What is NEAR Protocol?
Join the Chat Discord
NEAR Protocol is a decentralized platform that supports dApps, and that has a scalability solution, which it leverages to remain scalable. Scalability is a known concern in the digital asset space. Many blockchain networks struggle with scalability because of the growing demand for blockchain-related services. While many blockchains support smart contracts today, Ethereum is the first to have this capability. The Ethereum mainnet makes it possible for developers to build on top of another platform. We can say this paved the way for the many smart contract-capable blockchains that we have now.
Striving to become a suitable alternative to Ethereum, it leverages a proof-of-stake consensus mechanism. Experts believe that this mechanism is an environmentally-friendly alternative to proof-of-work, which consumes much power. And because of the growing demand for decentralized applications and the need for a scalable platform, many developers build dApps on the NEAR blockchain. Decentralized applications are like regular applications with some slight differences. DApps are usually built on top of a blockchain without centralized control. Control for this application is generally distributed over networks, helping it maintain transparency and decentralization. DApps have allowed users to access new blockchain-related, such as blockchain-based gaming, decentralized finance, and NFTs.
NEAR Protocol’s Technology
NEAR is powered by blockchain technology, making it possible to remain decentralized. One of the most important things this platform hopes to improve its scalability. Many blockchain-based platforms that run smart contracts struggle to maintain scalability, especially with congestion. Yet, applications like blockchain gaming and decentralized finance protocols need a scalable blockchain to run smoothly. Without this, users may find it challenging to access services when needed. They also need a scalable platform to cut the cost of settling transactions.
Ethereum is one of the platforms with scalability issues, mainly since it is one of the most preferred platforms for applications. This makes settling transactions on Ethereum expensive and slow. Ethereum advocates have pushed for layering solutions for this chain to reduce the cost of transactions, pending the creation of Eth 2.0. The team behind this chain assured users that the upcoming upgrade would work on scalability to cut costs for users. While many developers have built projects on Ethereum, others have also created applications on Solana and NEAR—two blockchains that also support decentralized applications. What makes these new blockchains different from Ethereum is their scalability. NEAR is a reasonably scalable POS platform that hopes to increase its capacity in the future.
To increase speed and reduce cost, the team behind NEAR hopes to introduce sharding as a scaling solution. When the demand for a blockchain becomes significant, it starts to take on a considerable workload, which may affect speed. Sharding is a popular scaling solution that targets the layer 1 network. This solution reduces the blockchain’s workload by splitting the network into shards. When this happens, the network becomes more scalable—as nodes increase, the network’s capacity increases. Because it uses a POS consensus mechanism, users can stake their assets to become transaction validators. People who stake their tokens earn passive income from this venture because they get interests, depending on how many tokens they stake and the years they plan on staking their NEAR token.
How Does NEAR Protocol Work?
It is safe to mention that NEAR is a layer-1 blockchain, which means it’s the main blockchain—similar to Ethereum or Bitcoin. This makes it possible for developers to build and deploy applications on it. Yet, applications may suffer when the platform is not scalable, making it necessary to push for a suitable solution to increase speed while cutting transaction costs. Older blockchains like Bitcoin and Ethereum are some of the slowest and most expensive to use networks in the space. And because they leverage POW, they consume a lot of energy, making the mechanism unsustainable. NEAR’s proposed solution to this predicament is sharding. Since sharding will break the chain into a smaller segment, it will make it easier to handle more workload. NEAR’s unique infrastructure makes it one of the few platforms pushing for scalability. This creates a conducive environment for decentralized applications.
What Is NEAR Token?
NEAR token is the blockchain’s native currency—used to settle transactions and pay for gas. The cryptocurrency also has some interesting use cases. You need to pay using the token to store data on the chain. Also, if you want to participate in staking, you need to hold some of the tokens. Staking makes it possible to validate transactions since it runs on a POS consensus mechanism. Governance is another reason holding NEAR is helpful for participants. If you want to participate in governance, you need to hold this token. Because of the need for decentralization, many projects embrace governance so that every holder can take part in contributing to society.
NEAR Price Prediction – Will NEAR crypto crash?
Many things have happened in the blockchain space in the past months. Digital assets have struggled to keep their prices up, and NEAR enthusiasts fear that this token will fall soon. This belief is speculation and not grounded on any solid fact. Investors who locked their NEAR token during the early years have made over 500% returns on their capital, suggesting that they may want to unlock their holdings to secure profits. Many investors locked their NEAR when the price was around $0.0375 five years ago. The digital asset has grown with its current price at $13.20.
With the price growing larger, investors fear that users who locked their assets may liquidate them, causing a price fall. Yet, no statistics suggest that the investors will dump the coin. A coin with huge potential as NEAR is likely to become more valuable in the future, making it unlikely to dump. If you are holding NEAR tokens, you should understand that investors have personal investment strategies, some of which may involve liquidating assets at particular price points. However, this does not suggest that NEAR will dump. This is especially since from a technical perspective, NEAR token simply retraced to its average uptrend line as shown in the graph above.
NEAR has a lot to offer the digital asset space, so selling the token may make you miss out on future price growth. While the digital asset space struggles to regain stability, it will be best to look long-term when investing in cryptocurrency.
Conclusion
Some investors speculate that NEAR would dump due to the unlock. However, this is mainly speculation, which is not based on facts, so you should do your research before taking a step. Asides from the research, you should also ensure you are investing with funds that you can afford to lose only.
You might also like
