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Why Was a Cryptocurrency Called "NEAR Protocol" Skyrocketing Today?

What happened

The price of NEAR Protocol (CRYPTO: NEAR) was skyrocketing on Wednesday, up a whopping 28% over the previous 24 hours, according to CoinMarketCap. Pushing the price higher was higher demand from investors as evidenced by its heavy trading volume. As of this writing, trading volume was up more than 125% from this time yesterday.

So what

It's not clear what exactly catalyzed the higher trading volume of NEAR today. But here's one possibility: MoonPay has a cryptocurrency trading app with around five million users. Today, MoonPay announced that it was allowing its users to buy NEAR tokens worldwide.

Image source: Getty Images.

There are cryptocurrencies that aren't available on major cryptocurrency exchanges. Interested investors can still get tokens, but they need to do so natively by participating in the project. This limits how many investors might buy tokens since it's more work, and there are people who prefer the simplicity of an exchange like MoonPay or Coinbase. By announcing support for NEAR, MoonPay made the pool of potential investors deeper, which could partly explain the increased trading volume today.

Now what

Many technology services are available to consumers for free, meaning you're the product. Companies collect your data and use it to monetize their businesses. Web 3.0 is a newer trend seeking to flip this incentive structure on its head. There are new web browsers that allow you to earn rewards for using, blockchain games that pay you to play, and more. And NEAR Protocol is a project seeking to facilitate this shift to Web 3.0.

Right now, NEAR is handling around 300,000 transactions per day, which is just a fraction of its capability. But the developers see a need to go ahead and transition to a more efficient system called Nightshade. It's still in what it calls "phase zero," meaning it's not quite ready for mainstream adoption. But phase one is scheduled to begin early next year, and phrase three is expected to be implemented before the end of 2022.

According to an official blogpost, phase three "is not the final phase of evolution for NEAR Protocol. Rather, we hope it's just the beginning."

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Jon Quast has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.


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