Solana (SOL 6.03%) was one of the hottest cryptocurrencies of 2021, emerging from relative obscurity and evolving into a crypto that Bank of America called "the Visa of the digital asset ecosystem" by January 2022. Despite being down from the lofty highs it hit in November 2021, Solana boasts a $27 billion market cap, making it the eighth-largest cryptocurrency by valuation.
Solana got to that point on the back of a war chest of venture capital funding, a wave of development and apps with a passionate community of users behind them, and low fees combined with high transaction speeds. NEAR Protocol (NEAR -0.50%) is a cryptocurrency that also enjoys many of these same hallmarks and thus looks like it could become the "Solana of 2022."
Speed and performance
At a time when Ethereum (ETH -0.39%) user, or gas, fees were causing crypto users to look for other solutions, Solana took center stage with its high speed and low costs that amounted to a fraction of a cent. Like Solana, NEAR offers impressive throughput, enabling 100,000 transactions per second.
NEAR also boasts almost instant transaction finality, or completion. As anyone who has nervously waited for several minutes for a transaction to show up in their account using Bitcoin (BTC 0.07%) or Ethereum can tell you, this is an attractive feature. Like Solana, NEAR's fees are negligible at less than $0.01.
NEAR has attracted an impressive influx of investment from some of crypto's biggest venture capitalists and funds in 2022. It started with a $150 million funding round led by Three Arrows and Jump Crypto in January, which was followed up with a $350 million funding round led by Tiger Global in April. Cryptocurrencies like NEAR can use this funding to spur development on the platform and attract more users.
Development and community
Just as Solana had a wave of new applications in 2021, NEAR is experiencing a surge of development. Last summer, non-fungible tokens (NFTs) first became available on Solana as platforms like Magic Eden emerged as active marketplaces. NEAR also enables NFTs, and platforms like Mintbase and Paras have popped up on NEAR Protocol. While NFTs on NEAR have not attracted the same level of cachet as those on Solana or Ethereum, the infrastructure is in place for if and when they attract more attention.
Beyond NFTs, NEAR is home to Ref Finance, a growing decentralized exchange (DEX). Volume on Ref was often less than $5 million a day as recently as February and March of this year. On April 30, volume hit an all-time high of $112 million. While this was an outlier, trading volume is increasing.
The next Solana
While the crypto market has been challenging in 2022, projects like NEAR Protocol keep plugging away and building up their ecosystems. The launch of the USN stablecoin on NEAR Protocol should help to attract even more users to the network. NEAR exhibits many of the attractive features such as high speed, low fees, significant funding, and thriving development that made Solana one of 2021's biggest winners. For those reasons, NEAR should be well-positioned to become the Solana of 2022.