NEAR is carving out a niche in agentic AI applications.
It could keep growing, but investors should be wary after its recent rally.
NEAR (CRYPTO: NEAR), the native token of the NEAR Protocol, has more than doubled in value over the past two weeks. Let’s see why this potential challenger for Ethereum (CRYPTO: ETH) is gaining so much attention — and if it’s still worth buying today.
NEAR, like Ethereum, is a Layer-1 blockchain built for decentralized applications (dApps) and AI-driven agent economies. Both blockchains use the proof-of-stake (PoS) consensus mechanism, which means their networks are secured by validators who stake (lock up) their tokens rather than by miners using energy-intensive hardware.
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NEAR and Ethereum both support smart contracts for developing dApps and other tokenized assets. However, NEAR processes transactions much faster than Ethereum, because it splits its database and processing workload across parallel “shards” on its Layer-1 blockchain.
To achieve higher speeds, Ethereum bundles its transactions and processes them off-chain in fragmented Layer-2 “rollups,” which often require multiple networks, bridges, and native tokens. Therefore, NEAR promotes itself as a faster, more unified, and more streamlined alternative to Ethereum that only operates on a single layer.
Ethereum is still the largest platform for decentralized finance (DeFi) and tokenized real-world assets (RWAs). Still, NEAR is carving out a defensible niche as an infrastructure layer (via its cloud-based NEAR AI platform) for AI agents. As that ecosystem expands, so will the value of the NEAR token — which is used to pay gas fees and earn staking rewards on the blockchain.
NEAR’s recent rally was driven by surging market interest in AI agents, a broader rotation from Bitcoin (CRYPTO: BTC) toward smaller altcoins, the expansion of its ecosystem, its integration with other popular blockchains, and it cleared two major regulatory hurdles (with NYSE Arca and the SEC) toward the approval of its first spot price ETF (Bitwise’s NEAR ETF).
However, NEAR can’t be valued by its scarcity, since its supply is steadily increasing. The bulls believe it can be valued for its utility, but it still faces stiff competition from larger, faster PoS blockchains like Solana (CRYPTO: SOL). Its recent parabolic move was likely driven by market hype about AI agents, so it could pull back once that euphoria fades. The whales (large investors) also control a significant portion of NEAR’s circulating supply, so it could abruptly give up its recent gains if they decide to cash out on its recent AI and ETF-driven hype. So for now, I’d avoid NEAR (and other volatile altcoins) and stick with the blue chip tokens instead.
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Leo Sun has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin, Ethereum, NEAR Protocol, and Solana. The Motley Fool has a disclosure policy.
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