Capital is successively chasing the Near ecosystem. Which applications are worth paying attention to?

Source: Hive Tech

As April begins, the public chain Near is becoming increasingly active. On April 6, it announced the completion of a new round of financing of $350 million to promote further growth of the Near ecosystem; there are also reports that Near will launch a native algorithmic stablecoin, USN.

The new round of financing for Near was led by traditional investment fund Tiger Global, with participation from several crypto investment institutions including FTX Ventures and ParaFi Capital. Not only has this public chain secured funding, but several applications within its ecosystem have also recently received institutional investments, including the decentralized trading application Trisolaris, the lending application Burrow, and Bastion, highlighting the capital attraction of the Near ecosystem.

Near (NEAR) was created to solve Ethereum's scalability issues, launching a high-performance blockchain network built on sharding technology that can scale infinitely. This public chain is a typical representative of using sharding technology to enhance blockchain scalability.

More than the financing, what has drawn the attention of the crypto community is Near's stablecoin plan. This plan was first disclosed by the crypto media Crypto Insiders, whose founder Zoran Kole wrote that NEAR will launch the native algorithmic stablecoin USN on April 20, which will offer an APR of about 20%, similar to the stablecoin UST on the Terra chain (LUNA).

In response, Near's official team has not commented, but the community and market have begun to stir. The native token of the Near chain, NEAR, surged to a high of $20, with a 69% increase over the past 30 days. This increase is particularly remarkable in the context of an overall decline in the crypto asset market, with NEAR oscillating at high levels, currently around $16.

Following the rise of NEAR, the value of locked crypto assets on the Near chain (TVL) has also increased, now reaching $1.46 billion, with a 169% increase over the past 30 days, ranking first among many Layer 1 public chains in TVL growth.

In addition to the news-driven increase in Near's TVL, more importantly, this public chain broke through its previous development bottleneck at the end of 2021 with the launch of the Aurora network. This scaling network built on the Near blockchain has changed the limitations that Near faced in 2021 due to its incompatibility with Ethereum, such as difficulties in DApp migration and poor funding access.

Currently, the Aurora development team operates independently. Since it is EVM compatible, developers can migrate applications to the Aurora network without changing code, thus joining the Near ecosystem. As a result, the technical foundation of the Near ecosystem has formed a parallel structure with the main chain and the Ethereum-compatible Aurora network, facilitating interaction between Ethereum and other EVM-compatible Layer 1 networks and the Near ecosystem, including developers and DApp users.

What applications have developed on the Near chain over the past two years? What progress have they made?

Liquid Staking Protocol MetaPool

Metapool (META) is a liquid staking protocol within the Near ecosystem, similar to Lido in the Ethereum ecosystem. Its functionality lies in helping nodes or users complete NEAR staking while enhancing asset liquidity and improving users' asset utilization.

Like many public chains, the Near chain also adopts a PoS (Proof of Stake) mechanism, where validating nodes need to stake the underlying token NEAR to gain validation qualifications, ensuring the stability and security of block production. Nodes can earn block rewards (NEAR).

Generally, the more tokens staked, the higher the credibility of the validating node. Therefore, institutions with financial and technical strength often operate validating nodes. When ordinary users want to share in the rewards from validating nodes, they often need to delegate their held tokens to the validating nodes. This requires users to operate the delegation process on smart contracts themselves and to assess the reliability of the nodes, increasing users' operational and knowledge costs.

Additionally, once users stake tokens with nodes, they cannot redeem them during the staking period, nor can they circulate them, and the only income they receive is a fixed share of block rewards. In the larger DeFi blockchain financial system, this reduces the efficiency of users' asset utilization.

Metapool addresses these pain points by allowing users to stake NEAR in the protocol to earn staking rewards, with the platform matching users' staked NEAR to validating nodes. Staking users receive a 1:1 staking certificate stNEAR, which allows them to earn staking rewards and participate in DeFi applications on the Near chain. When users want to unstake, they simply need to exchange stNEAR for NEAR in the liquidity pool provided by Metapool, "stNEAR---NEAR."

stNEAR is released to users at a 1:1 ratio with NEAR. Since stNEAR can be viewed as NEAR within the ecosystem, it supports DeFi scenarios such as exchanges or lending, effectively releasing NEAR's liquidity and enhancing NEAR's asset utilization. Additionally, staking NEAR itself can also earn rewards from Metapool. Currently, users staking NEAR on the Metapool platform receive an annualized yield of 11%.

Staking NEAR can earn an annual yield of 11%.

META is the native governance token of the Metapool platform, allowing holders to vote on the protocol's staking reward distribution ratio. In the early days, users could earn staking yields as well as the native token META rewards on Metapool. However, in February of this year, the META portion of the staking rewards was suspended, and currently, only users providing liquidity for the asset pool related to stNEAR exchange (stNEAR---NEAR) receive META rewards.

According to Defillama data, the current value of NEAR staked on the Metapool platform is $126 million.

One-stop DeFi Platform Ref.finance

Ref.finance (REF) is the first decentralized AMM (Automated Market Maker) trading application on the Near main chain, launched in April 2021, and officially supported by the Near Foundation.

Ref.finance aims to build a one-stop DeFi platform that integrates trading, lending, and asset issuance within the Near ecosystem. The platform launched a stablecoin exchange pool feature in December 2021, allowing users to quickly exchange stablecoins with minimal slippage and fees.

Ref.finance

Unlike previous DEXs, Ref.finance has optimized the asset exchange path. It has an "aggregated trading function" built-in, integrating trading data from DEX liquidity pools on Near and Aurora. Through its smart path feature, the application automatically finds the best exchange path for asset exchange users, including splitting a single transaction across multiple pools or including multiple implementation processes in a single transaction.

For example, when exchanging 100 NEAR for USDC, to continuously help users find a low-slippage exchange path, this transaction might be split into two parts, where 90 NEAR is first exchanged for DAI, and then DAI is exchanged for USDC, with the path being NEAR-DAI-USDC; while the other 10 NEAR might first be exchanged for USDT, and then USDT is exchanged for USDC, with the path being NEAR-USDT-USDC.

REF is the native token of Ref.finance, with a total issuance of 100 million. Currently, users can earn REF rewards by providing liquidity to the platform's liquidity pools.

According to Defillama data, the current TVL of the Ref.finance application is $208 million, with REF currently priced at $4.

The Largest DEX by Trading Volume Trisolaris

Trisolaris is the largest decentralized trading application (DEX) in the NEAR ecosystem by TVL and trading volume. It operates on the Aurora network and is the first DEX on that network. This DEX primarily supports the exchange of native assets on the Near and Aurora networks and allows cross-chain transactions of assets from all EVM-compatible Layer 1 chains to the Aurora network.

Trisolaris page

It is important to note that since Trisolaris is built on the Aurora network, the GAS fees paid during use are in ETH, meaning that users only need ETH to enter the Near ecosystem, lowering the participation threshold for the Near ecosystem.

On April 3, Trisolaris secured a strategic investment of $4.5 million led by Electric Capital, with the official statement indicating that the funds will be used to expand the team and continue investing in key products.

According to Defillama data, the current TVL of the Trisolaris application is $289 million.

Liquidity Pool Lending Platform Burrow

Burrow (BRRR) launched on March 29 and is a decentralized lending platform on the Near mainnet, where borrowers and lenders transact through liquidity pools. The interest rates for each loan and borrowing are determined based on the supply and demand of the liquidity pool, similar to the lending protocol Compound on Ethereum.

Burrow enhances user capital utilization by releasing the liquidity of "yield-bearing assets." "Yield-bearing assets" can be simply understood as assets that generate income, typically obtained from locking native on-chain assets. You can think of it as a deposit certificate or receipt obtained from locking native assets, and some refer to it as the tokenization of "yield-bearing bonds."

Burrow allows users to first convert their "base assets" into yield-bearing assets, supporting the use of yield-bearing assets as "collateral" to borrow other assets, thereby improving capital efficiency through the circular lending of yield-bearing assets.

For example, if a user holds NEAR, they can first stake it on the Metapool platform to obtain stNEAR, earning approximately 11% interest annually; then they can deposit stNEAR into Burrow to earn interest income or use stNEAR as collateral to borrow other assets.

Burrow deposit and loan income situation

Like the lending application Aave on Ethereum, Burrow employs an "over-collateralization" method to maintain the safety coefficient of assets and keep it within a healthy range. For each asset's collateralization rate, Burrow introduces the concept of asset volatility, meaning that each asset has its own characteristic price volatility range, and the volatility is calculated based on this price volatility range. When other factors are stable, using assets with higher volatility as collateral results in lower capital utilization.

On March 29, Burrow announced its launch on the Near mainnet and the next day completed a round of financing of $5 million, with investors including Dragonfly Capital, ParaFi Capital, and IOSG Ventures.

Currently, Burrow supports users depositing NEAR, stNEAR, ETH, USDC, USDT, DAI, and wBTC to earn interest or use as collateral to borrow needed assets.

As of April 21, Burrow has a total deposit of $432 million and a total loan of $281 million.

Lending Application Bastion

Bastion is a lending application built on the Aurora network, where lending rates are determined by the supply and demand of the liquidity pool's assets.

It is similar to Compound, where users deposit crypto assets and receive a deposit certificate called cToken. cToken is also a form of yield-bearing asset. Over time, as the interest income of the underlying asset increases, the value of cToken rises. When users exchange cToken back for the underlying asset, they will receive more of the underlying asset than they initially deposited. When borrowers want to borrow other funds, they need to first deposit crypto assets to convert them into cToken, then use cToken as collateral to borrow the required assets.

Although Bastion's lending mechanism is similar to Compound, it has improved user experience in terms of product functionality. It has launched a stablecoin exchange pool, supporting low-slippage exchanges of stablecoins, cTokens, wrapped assets, and staked assets. Users can perform lending, trading, and other processes on the Bastion platform.

Users depositing assets on the Bastion platform can earn interest income and can also pair their deposit certificates cToken with similar assets to provide liquidity and earn trading fees.

For example, if Xiao Ming holds NEAR. In previous lending protocols, Xiao Ming could deposit NEAR to obtain a deposit certificate cNEAR. At this point, cNEAR could either be used as collateral to borrow other assets or be held to earn interest income from the deposited NEAR. However, on the Bastion platform, Xiao Ming can first exchange NEAR for the staking certificate stNEAR, then deposit stNEAR into Bastion to obtain cstNEAR. The cstNEAR held can be paired with similar assets related to NEAR, such as cstNEAR-stNEAR, cstNEAR-cNEAR, cstNEAR-NEAR, etc., and then provide liquidity for these asset pools to earn liquidity rewards.

In this way, Xiao Ming's base asset NEAR is "used in multiple ways," simultaneously earning staking rewards, deposit interest, and trading fees, thereby improving capital utilization.

Bastion operational data

Bastion launched on March 7 and announced on March 23 that it had completed a round of financing led by ParaFi Capital, with participation from DCG.

Less than three weeks after its launch, it received capital support, and many users believe this is mainly due to the issuance method of Bastion's native token BSTN. Bastion did not adopt the traditional "airdrop" method commonly used by DeFi protocols but instead used a "Lockdrop" method, where users need to lock assets into Bastion for a period of 1 to 12 months, after which they can receive BSTN rewards and reclaim their original assets. The longer the lock-up period, the more BSTN they receive. This airdrop method significantly curbed opportunistic users and allowed time for the platform to accumulate TVL.

After launching the lockdrop airdrop, Bastion attracted a large amount of capital, creating a "vampiric" effect on other lending applications, briefly pushing it to the top of the TVL rankings among Near ecosystem applications.

Currently, the total value of deposits in Bastion is $428 million, and on April 21, the application announced the launch of BSTN, which will begin trading on Trisolaris the next day.

Lending Platform Aurigami Finance

Aurigami (PLY) is a lending application running on the Aurora network, allowing users to earn deposit interest or borrow crypto assets, with lending rates also changing based on the supply and demand of the liquidity pool's assets.

In the Aurigami application, depositors receive a deposit certificate called auToken when they deposit crypto assets, which is also a yield-bearing asset that allows users to withdraw their deposited assets as needed. Additionally, auToken is tradable and transferable. Borrowers wishing to borrow assets on Aurigami need to deposit supported assets as collateral, which also follows the over-collateralization lending model.

Aurigami lending data

Aurigami is one of the earlier lending applications in the Near ecosystem. On February 6 of this year, the application announced that it had received investment support from well-known crypto venture capital firms such as Polychain Capital, Alameda Research, and Coinbase Ventures, although the specific amount was not disclosed.

Moreover, from April 22 to May 6, Aurigami will launch a super reward program worth $2.5 million in NEAR (approximately 145,000), where users depositing crypto assets on the platform can earn NEAR rewards in addition to interest income, with different reward distribution weights for each lending pool.

This initiative seems to be a countermeasure against later entrants in the lending space, Burrow and Bastion. This indicates that the competition for TVL among lending applications on the Near chain will continue.

Currently, Aurigami's total deposit value is $200 million, and total borrowing value is $97 million.