Let’s not kid ourselves, the crypto space is filled with projects that claimed to do the impossible and ended up producing… you guessed it, moon dust. So, when I hear about a "rising star" in the DeFi world, I approach it with a healthy dose of skepticism. NEAR Protocol’s DeFi ecosystem is getting some buzz, and the question is: is it ready to disrupt the big boys, or will it fade into obscurity like so many others?

NEAR's DeFi: The Underdog Story

NEAR’s DeFi is definitely growing. We see lower fees, faster transactions, and a user experience that's supposedly less clunky than what you often find on Ethereum. That is really attractive, I think particularly when you cast your mind back to the gas wars of 2021. Who’s going to pay $50 in gas to trade one token for another.

Ethereum, BNB Chain, and Solana are the behemoths in this space. They’ve got killer network effects, great developer communities and very sticky existing user bases. NEAR is playing catch-up. It’s the opposite of that hipster favorite band with one amazing single making it into the hard world of stadium rock. Nevertheless, the potential is unlimited, but the journey is just beginning and it’s a long road dotted with dreams deferred.

I believe this is where NEAR has the clear competitive edge, with a strong emphasis on user experience and scalability. It is like comparing Android and iOS. We all love the Android ecosystem for its open-source flexibility, but we know it can be fragmented and inconsistent at times. iOS is very closed and very controlled, but in comparison to the competition has UX that is extraordinarily superior. NEAR is aiming to be the buttery Android of DeFi.

Jumbo's Rise, PembRock's Risks

Continuing with concrete examples, the article points to the Top 10 DeFi projects on NEAR. Ref Finance at #1? No surprise. It's the Uniswap of NEAR. Then you have Jumbo Exchange, turning more heads with its UX-driven approach and emphasis on “gamification.” Honestly, the gamification angle is intriguing. It’s like Duolingo, but for crypto trading. That, indeed, can lure an entirely different cohort of users. It is especially powerful in developing world contexts where informal capital rules the day.

Can Jumbo sustain that momentum? Gamification, as we’ve said, is awesome, but it’s not a silver bullet. That’s the thing—people want and need real value—not shiny buttons and points.

Then there’s PembRock Finance. Leveraged yield farming? Sounds like a recipe for punting inexperienced users into a blender. All those high APYs are seductive, but those liquidation risks are not theoretical. Until PembRock undergoes extensive independent clamp down audits and climate stress tests, I’d stay away from those investments. Imagine trying to race a Formula 1 car on a world-class track with no brakes. Fun until you crash.

  • Ref Finance: The Uniswap of NEAR. Solid.
  • Burrow: Lending/Borrowing. The Aave/Compound of NEAR.
  • Meta Pool: Liquid Staking. Core to NEAR's decentralization.
  • Jumbo Exchange: Gamified Trading. High Potential, High Risk.
  • PembRock Finance: Leveraged Yield Farming. Proceed With Extreme Caution.

Cross-Chain Dreams, DYOR Reality

AuroraSwap, NEARPad, Tonic, Spin.fi, OCT Finance… The list goes on to show how these projects enrich the ecosystem’s diversity. Of course, the most exciting development is the growing interest in making cross-chain swaps a reality. Picture this — without a bridge, you can seamlessly move your assets between NEAR, Ethereum and other chains. That is the future of DeFi.

Now here’s where I put on my “grown-up” cap. All this innovation comes with risk. Each and every DeFi protocol becomes an attack vector. Smart contract bugs, rug pulls, economic exploits…the threats are very much present.

It's a necessity. Read the audits. Understand the risks. Don't blindly chase APYs. Ask questions. The good rule of thumb goes, if it sounds too good to be true, it probably is.

NEAR's DeFi has potential. The lower fees, the prioritization of UX, the developing ecosystem all are encouraging things. It's not a sure thing. There are still uncertainties and risks. It will now have to demonstrate it’s able to continuously attract and retain users, and that its protocols are safe and sustainable.

So, is NEAR’s DeFi a flash in the pan? I don’t think so. But it's not a guaranteed success either. It's a work in progress. And like any major investment, it should be approached with cautious optimism and a healthy dose of skepticism. Don’t undertake something simply because it seems like the thing to do or everybody else is doing it. So… do your research, mitigate your risk, and never forget that in crypto, all bets are off.

That, my friends, is the true danger – and the true chance.