NEAR - 7. Weekly Report - Redux
Each week, the NEAR Foundation publishes data to help the NEAR community understand the ecosystem's health as part of their Transparency Report. We want your help in making the NEAR ecosystem even more transparent. How can you improve on the existing NEAR Transparency report? Explain which metrics should be taken into consideration and why. Then, analyze those metrics over the last several weeks and draw your own conclusions on the health of the NEAR ecosystem.
What is NEAR?
NEAR is a decentralized, open-source, and permissionless blockchain protocol that enables developers to quickly and easily build and deploy applications. Built on a sharded Proof-of-Stake consensus mechanism, the NEAR protocol provides the scalability, security, and performance needed for mainstream adoption. NEAR’s mainnet launched in April 2020 and its native token, the NEAR token, was released on the Ethereum network in May 2020. NEAR’s goal is to make blockchain technology accessible to everyone. The team has taken an “everyday use” approach to blockchain development, focusing on making blockchain technology more accessible and user-friendly. The team has done this by creating an intuitive and easy-to-use platform that allows developers to easily create, deploy, and scale applications. The NEAR protocol also provides developers with tools and resources to build secure, reliable, and scalable applications. NEAR is designed to support a wide range of use cases, from DeFi to gaming, and it also provides developers with financial incentives to develop and maintain applications. The NEAR token is the native token of the NEAR protocol and it’s used to pay for transaction fees, access features, and to facilitate activities on the network
What is proof of stake?
Proof of Stake (PoS) is a consensus algorithm used by some cryptocurrencies to validate transactions and produce new blocks on the blockchain. Unlike Proof of Work (PoW) consensus algorithms, which rely on miners to validate transactions and generate new blocks, PoS relies on individual users to stake their coins and validate transactions. Stakers are rewarded with a portion of the transaction fees from new blocks. The stakeholder also receives an inflation reward for staking. This method reduces energy consumption, as it does not require energy-intensive mining, and allows faster and cheaper transactions.
What is Staking?
Staking in cryptocurrency is the process of holding coins or tokens in a cryptocurrency wallet to support the operations of a blockchain network. By staking coins, holders are able to earn rewards, in the form of newly minted coins, for their contribution to the network. The amount of reward depends on the amount of coins staked, the staking duration, and other network parameters. Staking also helps secure a blockchain network, as it requires holders to prove ownership of coins in order to be rewarded.
Methodology//Definitions
Each week, the NEAR Foundation publishes data to help the NEAR community understand the ecosystem's health as part of their Transparency Report. We want your help in making the NEAR ecosystem even more transparent. How can you improve on the existing NEAR Transparency report? This is the link to the current transparency report: Explain which metrics should be taken into consideration and why. Then, analyze those metrics over the last several weeks and draw your own conclusions on the health of the NEAR ecosystem. Some metrics that should be taken into consideration in order to make the NEAR Transparency report even more transparent are:
- Number of active stakers: This metric provides an indication of the number of people actively participating in the staking process and using the NEAR platform.
- Amount of tokens staked: This metric provides an indication of how much of the total supply of tokens is currently being held in staking.
- New user activity: The amount of new users per day is a good indication of network health
- Stable swaps on DEXs: Stablecoin swaps are also a key indicator of network health. The bottom of the dashboard shows various metrics surrounding stablecoin swaps on DEXs on the NEAR network
==All statistics/measures are shown beginning December 25th, 2023==
Analysis
- While the number of active daily wallets remained stable over the last 3 weeks, large spikes on January 10th, 11th, and 12th saw days of 10 million and more users actively trading on the platform
- The median number of active wallets was slightly larger than the mean number. This shows a negative skew in the data
- That said, there are over 55 million wallets using the NEAR network since Dec 25th, 2022
- ==The rate of growth is fairly limited, and outside of a few outliers such as Jan 10th, 11th, and 12th, there are no real signs of upward growth in the last 3 weeks==
Net flows- analysis
- When comparing the net number of users staking, there is only 1 day in the last 3 weeks that shows a day where more users were unstaking than staking
- Similarly, January 14th was also the only day that showed more unstaking transactions than staking transactions. This brings to light the high correlation between the 2 metrics
- ==An interesting takeaway from the net AMOUNT of NEAR staked is that a majority of days are positive- but just barely. If not for December 28th, there would only be 1.5 million more NEAR staked than unstaked- this is not a good sign at all for the network. Typically when there is a singular day of high activity like this, it can be accredited to the activity of a single user. This puts the network at risk of being overly reliant on an individual, or a small group of users==
- In general, roughly 65-75% of the activity on the network favors staking>unstaking actions
Conclusions//Takeaways
The outlook of NEAR crypto looks positive. Despite the lack of stakers, the growing number of users on the platform is a good sign for the network's future. This indicates that the platform is gaining traction and that more people are becoming aware of the advantages of NEAR crypto. The NEAR protocol has a strong focus on scalability, which is essential for any cryptocurrency. This scalability allows the network to handle more transactions and users, which is essential for its long-term success. Additionally, NEAR has a strong focus on security, which is another key factor for the success of a cryptocurrency. The growing number of users over the last three weeks is a good sign for the network's future, as it indicates that more people are becoming aware of the advantages of using the NEAR protocol. As more people join the network, the likelihood of the network becoming more successful increases. Therefore, the outlook of NEAR crypto looks good. With the increasing number of users, the network is likely to gain more traction and become more successful in the long run. Additionally, with its focus on scalability and security, the network is likely to become more resilient and dependable.
New user activity- analysis
- A positive sign of growth is seen in the first visual- the number of new users per day appears to be growing over time, with a combined 4.5k new since Christmas
- When comparing various measures surrounding stableswaps, it appears that the number of stable swaps is growing over time
- ==This can be deciphered from the number of transactions involving stable coins, and the count of unique users swapping either USDC or USDT==
- Additionally, the total volume of stablecoins has increased dramatically in the last few weeks- a sign of a healthy economy
NFT Sales- Analysis
- NEAR has yet to be established as a network for NFT sales
- Although NFTs can be a KPI for network health, that is not necessarily the case. As for NEAR, it appears unlikely as their NFT sales numbers are so incredibly low
- ==Given that NEAR is designed as a community-run cloud computing program, I would suspect that 99% of these NFTs sold aren’t art works, but rather keys to access certain information- hence the low numbers==