Is NEAR clinging to its thighs as the price of coins declines while serving Ethereum Rollups?

Author: Vanguard 0

In the world of cryptocurrency, every action is interpreted as a strategic move or a desperate struggle.

Recently, the NEAR Foundation announced the launch of NEAR Data Availability (NEAR DA), an initiative aimed at providing data availability services for Ethereum Rollups, which on the surface appears to be a bold expansion of blockchain data processing capabilities. However, behind this seemingly aggressive step lies a more complex question: is this a wise strategic adjustment, or is the NEAR Foundation devaluing itself in the crypto space?

The following text will break down this event.

NEAR's New Move Shrouded in Doubt, Is a Crisis Looming?

The current market performance of NEAR Protocol is not optimistic, with its price dropping to $1.46, a decrease of 2.07%. This market dynamic may reflect investors' uncertainty regarding the NEAR Foundation's latest initiative.

NEAR Asset Price Trend Chart

The launch of NEAR DA ostensibly meets the market's demand for processing large amounts of Ethereum data, especially for auxiliary chains or second-layer solutions (L2). The initial user base includes reputable names in the industry such as Starknet's Madara, Caldera, and Movement Labs. However, is this enough to prove that the NEAR Foundation's new initiative is an upgrade rather than a devaluation?

Official Theme Poster for NEAR DA Launch

In this rapidly changing crypto economy, every organization is seeking its meaning and value. Although NEAR DA may have technical advantages, strategically, it seems to be acknowledging to the market that they need to maintain relevance by supporting the Ethereum ecosystem. Does this dependency strategy imply that the NEAR Foundation has chosen a safer path in competition with industry giants, but one that may lack independent innovation?

At this point, we can't help but question: is the NEAR Foundation's latest move a keen insight into market demand, or a reluctant compromise with reality? Is it a well-considered strategy, or a self-deprecating stance? As we delve deeper into the article, we will explore multiple dimensions of this question.

Why Is NEAR So Insecure About Its Own Bets on the Ethereum Ecosystem?

The NEAR Foundation, as a non-profit organization, bears the important responsibilities of maintaining the functionality of the NEAR protocol, funding ecosystem development, and overseeing governance. As a first-layer blockchain, the NEAR protocol aims to support creators and developers, providing a community-operated computing platform, which means its network is maintained by a distributed setup. However, the decision to launch NEAR DA seems to reveal a weakening of its confidence and innovative capacity in the cryptocurrency field, especially when it chooses to rely on the Ethereum ecosystem rather than developing its own unique technological path.

This move indicates the NEAR Foundation's dependency on market leaders. In an industry where innovation and independence are core values, this strategic shift may be seen as a signal of a lack of independent innovation. This dependency not only undermines the NEAR Foundation's image as an independent and leading cryptocurrency entity but may also lead to a decline in its competitiveness in the market.

NEAR Protocol Banner Background Image

The market's reaction to NEAR DA further reinforces this viewpoint. The decline in NEAR Protocol's price may reflect the market's distrust and dissatisfaction with the NEAR Foundation's strategic shift. This price trend suggests that investors and market participants may have lost confidence in the NEAR Foundation, believing it cannot provide the innovation and unique value needed to compete with market leaders.

Moreover, the NEAR Foundation's choice to support the Ethereum ecosystem instead of focusing on the development of its own ecosystem may be seen as uncertainty about its own technology and market position. This strategic retreat may imply that the NEAR Foundation's influence and status in the cryptocurrency field are declining, lacking sufficient resources or vision to maintain or enhance its market position.

Overall, the NEAR Foundation's decision to launch NEAR DA can largely be viewed as a self-devaluation. This strategic shift reflects uncertainty about its own capabilities and a search for a safe but potentially uninspired path in the face of fierce market competition. Such an approach may negatively impact the NEAR Foundation's long-term development and market position.

Credibility Crisis Emerges, Does NEAR Urgently Need to Publicly Announce New Strategies to Mitigate Negative Impact?

After discussing the NEAR Foundation's strategic decisions, we must mention the controversies it faced earlier, which have had a profound impact on its image and market trust. The incident disclosed by Wintermute founder and CEO Evgeny Gaevoy on the X platform, in which the NEAR Foundation and Aurora refused to fulfill a redemption commitment involving 11.2 million USN related to FTX, has brought a serious credibility crisis to the NEAR Foundation. Wintermute's threat to take legal action if the NEAR Foundation continues to refuse to fulfill its commitments has further exacerbated this crisis.

The new CEO of the NEAR Foundation, Illia Polosukhin, co-founder of Near Protocol, responded by explaining the reasons for rejecting Wintermute's redemption request. He pointed out that Wintermute's redemption request was inconsistent with the goal of protecting affected individuals in the NEAR ecosystem and raised significant KYC/AML concerns. However, this explanation may not have fully alleviated market doubts about the NEAR Foundation's integrity.

In this context, the NEAR Foundation may feel the need to reshape its image through new strategic initiatives to restore its reputation and trust in the market. The launch of NEAR DA may be one of the attempts made by the NEAR Foundation in this regard. By collaborating with mainstream blockchain ecosystems like Ethereum, the NEAR Foundation may hope to demonstrate its commitment to industry collaboration and technological advancement. This collaboration could not only enhance the NEAR Foundation's visibility in the tech field but also help it establish a more positive and cooperative image in the market.

However, whether this attempt will be successful remains to be seen in the market. While collaboration with Ethereum may somewhat enhance the NEAR Foundation's image, it may also be perceived as a reflection of uncertainty about its original technology and market position. If the market views this collaboration as an excessive reliance on external support rather than a strategic complement, then the NEAR Foundation's efforts to reshape its image may not yield the expected positive results.

Challenges and Opportunities Coexist, Will NEAR's Future Shine Again?

The challenges currently faced by the NEAR Foundation are not only about technological innovation and market strategy adjustments but also a test of its ability to maintain independence and innovative spirit in a fiercely competitive cryptocurrency market. The launch of NEAR DA and collaboration with the Ethereum ecosystem, while seemingly a strategic choice to respond to the current market environment, may have negative implications for its long-term sustainable development due to this dependency and lack of independent innovation.

The future of the NEAR Foundation will depend on whether it can effectively respond to market challenges and credibility crises while maintaining technological leadership and market competitiveness. However, the current situation indicates that the NEAR Foundation faces severe challenges in these areas. It needs to rebuild and maintain trust with investors, partners, and community members while continuing to innovate technologically. This is not only a strategic challenge but also a long-term struggle regarding brand image and market position.

In this ever-changing cryptocurrency world, every step taken by the NEAR Foundation will be closely monitored. However, given its recent decisions and actions, the future of the NEAR Foundation is filled with uncertainty and challenges. Whether it can successfully overcome these challenges and re-establish its leadership position in the cryptocurrency field remains an unknown.