The NEAR Protocol is making waves in the cryptocurrency world, with its native token, NEAR, experiencing a remarkable 57% price surge recently. After dipping to $3.41 on September 6, the token soared to an impressive 8-week high of $5.36 by September 24, currently trading at $5.21. This surge has been fueled by significant developments in the NEAR ecosystem, most notably the implementation of sharding.
Sharding Implementation Enhances Scalability
On August 12, NEAR Protocol completed its much-anticipated NEAR 2.0 update, successfully implementing blockchain sharding on its network. This makes NEAR only the second blockchain, after Elrond, to achieve sharding in production.
Sharding allows the blockchain to divide its workload across multiple groups of nodes, known as “shards.” This innovative approach enables linear scalability, effectively addressing the blockchain trilemma by enhancing scalability and security without sacrificing decentralization. As a result, NEAR positions itself as a more efficient and cost-effective alternative to Ethereum for decentralized applications (dApps). Industry experts believe this will drive an increase in developer and user adoption within the NEAR ecosystem.
Growing Network Activity and Total Value Locked (TVL)
In addition to the technological advancements, NEAR Protocol is witnessing a surge in network activity. On-chain data indicates a 42% increase in daily transactions from August 25 to September 24, alongside a 30.8% rise in new address creation during the same period.
This uptick in activity has had a positive impact on the total value locked (TVL) within NEAR-based protocols, which has grown by 34%—from $183.7 million on September 7 to $246.5 million by September 24, according to DeFiLlama. Such growth is indicative of increasing confidence and engagement within the NEAR community.
Rising Futures Open Interest
Another indicator of NEAR’s growing prominence is the surge in interest for NEAR futures contracts. Derivatives data from Coinglass reveals that open interest in these contracts has jumped from $114.9 million on September 7 to $279.2 million on September 24, marking the highest level since June 7. This increase suggests a wave of new capital entering the market, bolstering buying activity and market sentiment.
NEAR/USD Technical Analysis
From a technical standpoint, NEAR’s recent price action signals strength. The token has successfully broken above its descending trendline and is currently trading above key moving averages, including the 50-day, 100-day, and 200-day exponential moving averages (EMAs). A relative strength index (RSI) reading of 70 suggests that buyers have taken control of the market, with analysts eyeing resistance levels at $6 and the June high of $6.45. However, traders should remain vigilant, as a daily close below the 50-day EMA at $4.40 could signal a shift in momentum.
In summary, the NEAR Protocol’s recent developments, particularly the implementation of sharding, combined with growing network activity and rising futures open interest, paint a promising picture for the future of NEAR and its ecosystem.
