The Narratives are NEAR

Although DeFi activity never took off on Near, likely due to weak differentiation compared to Ethereum and rollups, the project’s focus on onboarding consumer-facing dApps is paying off. Within the past three months, Near has consistently ranked within the top three chains in terms of daily active addresses. Usage has been growing, which ought to be sustained as Near continues rolling out chain abstraction-related solutions. This is something that the market is likely overlooking at the moment.

With Celestia’s native token, TIA, performing extremely well in Q4 2023, Near’s data availability solution as a beta play caused NEAR to re-rate upwards. However, one should expect the “DA wars” narrative to continue heating up in 2024 as EigenLayer’s EigenDA is expected to enter the market and more chains utilizing Celestia’s solution go live. As such, in addition to Near beginning to onboard data availability customers, NEAR is likely to continue experiencing positive price action, with investors looking to get exposure to the data availability vertical.

Speaking of EigenLayer, the project has received a vast amount of attention, and it’s likely that another 2024 narrative will form around protocols utilizing restaked ETH. Near’s Fast Finality Layer could become a focal point of this category, offering a unique and value-added solution.

Having said that, both Near’s DA and settlement solutions are unproven and in their early stages, with information about the implementations being somewhat scarce. This isn’t to say that the market shouldn’t pick up on them as the associated narratives accelerate, but will likely require developer teams to execute further in order for Near to achieve sustained momentum.

There are also several adjacent, albeit not as strong, drivers that could materialize during the year. Near is striving to introduce AI components, such as AI-driven governance, with several AI-related projects launching within the ecosystem. The hype around the combination of AI and crypto will undoubtedly increase in 2024, and Near could benefit from this. Moreover, the Near Foundation recently reduced its headcount by 35 persons, or ~40%, primarily across its marketing, business development, and community teams. Near has historically focused on too many things at once, and the reduction was made with the intention of concentrating attention on a narrower and higher-impact set of activities. Ideally, the aforementioned leads to more concise execution and communication by the project, helping the market understand Near’s renewed value propositions. The foundation has made it clear that its financial shape is intact and that there is ample runway, with over $285M of fiat in the treasury.

Near has long been overlooked by the market as it was never able to create a vibrant DeFi ecosystem. Be that as it may, the project has pivoted to become more consumer- and infrastructure-focused while continuing development, creating differentiated solutions for which there will be an increasing amount of demand as rollups continue to proliferate. This is something that the market has slowly started to notice, and this trend will likely accelerate as Near plays into the data availability and EigenLayer narratives that are expected to become some of the main themes of 2024.