Digital Assets

Near Protocol arms itself in the blockchain race with $350M funding round

By Victor Lei
near protocol

Near Protocol is arming itself with $350M in funding to compete in the race to become the next smart contract giant — one led by the OG smart contract platform, Ethereum.

The most important race of the decade

Picking the right horse might land you with the next or. Hundreds of others are competing, but here’s the leader chart by fees earned (7-day average):

  • Ethereum — $24M.
  • Binance Smart Chain — $1.8M.
  • Avalanche — $1M.

Last year, Solana exploded in popularity due to its fast and cheap transactions ($0.00025). Cardano was a retail investor favorite but has struggled to gain market share.

These newer blockchains promise similar things: Faster transaction speeds and cheaper fees.

Here’s another: Near Protocol — which uses proof-of-stake — has quickly grown into a $10B giant and its token has risen 138% in the past year.

Near’s tech has investors excited

Near was the 3rd most-held asset held among crypto funds in the last quarter of 2021. Near’s blockchain uses a process called “sharding,” — which makes transaction fees cheaper and speeds faster.

How vital is sharding? Enough for Ethereum to have it on their product roadmap — expected in 2023.

  • Last week, Near announced a $350M investment by the investment firm Tiger Global and other heavy hitters.
  • Last October, announced $800M in grants to incentivize developers to create apps on their platform — the largest grant to date offered by a layer one blockchain.

Fight for developers: The more apps running transactions on their platform, the more fees these blockchains earn. Near differentiates itself by being easy to use.

  • Near makes it easy for Web2 developers to build on Near — incorporating industry-standard tools from Microsoft and other tech giants.
  • Most existing blockchains require developers to code in blockchain specific coding languages (e.g., Solidity) — but Near supports several traditional coding languages (e.g., Java, Go, Rust).

Read Partner of Pantera Capital Paul Veradittakit explains Near’s features (warning, highly technical).

Investors: What’s missing? Transactions and apps.

Big funding rounds mean little unless they lead to more developers, apps and transactions on Near’s network.

  • In 2021, the number of developers on Near’s platform grew second-fastest among mid-sized blockchains (behind Solana)
  • But Near is still new, and the available apps and transactions on its network are limited.

Investing in any of these protocols carries a big risk. Competition among blockchains is hyper-competitive, and many of these could likely go to zero.