The NEAR Protocol, a decentralized and open-source blockchain, facilitates the creation and deployment of decentralized applications, commonly known as dApps. This layer 1 blockchain, which operates on a proof-of-stake consensus mechanism, endeavors to provide efficient and cost-effective transactions as well as smart contract capabilities.
Additionally, it is worth mentioning that the near protocol is highly scalable and can be integrated with other blockchains for cross-chain communication.
Key Takeaways
- NEAR Protocol is a dApp platform built on top of a proof-of-stake (PoS) blockchain. It is designed to be scalable, secure, and developer-friendly.
- The protocol uses a unique sharding mechanism to achieve scalability, which involves dividing the network into smaller groups of nodes called shards, each of which processes a portion of the transactions.
- NEAR is the native token of the NEAR Protocol used to pay for processing transactions and facilitating governance decisions.
NEAR Protocol is built with scalability in mind, given its ability to handle a high transaction volumes per second. It also has a pretty user-friendly developer experience, focusing on making it an easy platform to build and deploy dApps in.
How does NEAR Protocol work?
The NEAR Protocol is a blockchain platform that utilizes Proof of Stake (PoS) consensus and a sharding solution called “Nightshade” to increase its scalability. Sharding allows each node in the blockchain to only store a portion of the network’s data, which increases the number of transactions per second and decrease fees.
Nightshade divides the computing required to maintain the data into smaller “chunks” that are added to the main chain after processing. This architecture also allows for fewer security vulnerabilities, since nodes only need to maintain smaller sections instead of the whole chain.
Rainbow Bridge
The NEAR Protocol includes a feature called the Rainbow Bridge that enables users to transfer Ethereum tokens between the Ethereum and NEAR platforms with convenience. To transfer from Ethereum to NEAR, a user can deposit their tokens in an Ethereum smart contract. Afterwards, the tokens get locked, and new tokens are created on NEAR’s network that represent the original. Since the funds are locked via the smart contract, the process can be reversed when the user wishes to retrieve their original tokens.
Aurora
Aurora is a Layer 2 scaling solution for NEAR that allows developers to launch their Ethereum dApps on the network. It is built using the Ethereum Virtual Machine (EVM), and includes a cross-chain bridge that enables developers to easily link their Ethereum smart contracts and tokens with NEAR.
By using Aurora, developers can take advantage of the low fees and high transaction throughput of NEAR while still utilizing the familiar and extensive network of Ethereum applications.
NEAR Ecosystem
The NEAR Protocol community is made up of more than 550,000 members and has funded 125 DAOs (decentralized autonomous organizations) with a total of $5 million to support a variety of dApps (decentralized applications), including lending platforms, NFT (non-fungible token) trading platforms, gaming platforms, launchpads, and exchanges. AwesomeNear is a popular tracker and aggregator for dApps launched on the NEAR blockchain. Some of the most well-known NEAR dApps include
- Paras, an NFT marketplace that utilizes the decentralized storage platform IPFS and has its own token called PARAS;
- Flux, an open predictive market protocol using FLX tokens;
- Burrow, a lending protocol similar to Ethereum’s Aave; and
- Ref Finance, a token swap exchange similar to Uniswap.
NEAR Protocol Development
The development of NEAR Protocol is guided by a set of core principles, including decentralization, security, scalability, and usability.
One NEAR Protocol’s key goals is to make it easy for developers to build and deploy dApps on the platform. To achieve this, the NEAR team focused on creating a developer-friendly ecosystem, including a flexible programming language (Rust), a set of developer tools and libraries, and a range of documentation and resources to help developers get started.
NEAR Protocol designed to be able to handle a high volume of transactions per second. To achieve this, the NEAR team implemented various technical solutions, such as sharding and rollups, which help to improve the performance and efficiency of the network.
Apart from the technical development, the NEAR team is also involved in various community-building efforts, such as hosting hackathons and developer meetups and working with other organizations and projects in the space.
NEAR Token
The NEAR Protocol mainnet was officially launched on April 22, 2020, with an initial supply of 1 billion NEAR tokens. Each year, an additional 5% of the total supply is added to the network as epoch rewards, which are distributed among validators (4.5%) and the protocol treasury (0.5%).
Additionally, transaction fees are also handled in a specific way: 30% of the fees are paid as rebates to contracts that interact with a transaction, while the remaining 70% are burned. The NEAR token serves multiple purposes within the network such as: paying for the cost of processing transactions and storing data, staking to run validator nodes, and participating in governance voting to decide on the allocation of network resources.
NEAR JavaScript SDK
The NEAR protocol’s goal of making blockchain technology accessible to all continues to drive the development efforts of NEAR Collective and the community. In August 2022, the NEAR team announced the release of a JavaScript software development kit (JS SDK).
The NEAR JS SDK is expected to provide an opportunity for more than 20 million programmers who use the JavaScript programming language in Web2 to enter the blockchain and Web3 space. According to the NEAR team, this is ten times more than the global population of around 2.5 million programmers who use the most popular blockchain programming languages, Rust and Solidity. The NEAR JS SDK will make use of JavaScript’s ease of use and simplicity in developing smart contracts.
NEAR Protocol FAQ
Who Are the Founders of NEAR Protocol (NEAR)?
Erik Trautman, a Wall Street veteran and the founder of Viking Education, founded NEAR Protocol. His co-founders were Illia Polosukhin, who has over a decade of industry experience, including three years at Google, and Alexander Skidanov, a computer scientist who worked at Microsoft and later became the director of engineering at memSQL.
NEAR Protocol has a team of experienced developers that includes multiple gold medalists in the International Collegiate Programming Contest (ICPC). The team boasts of having individuals with experience in building sharded systems at scale, a solution NEAR Protocol is pursuing to improve blockchain scalability.
What Makes NEAR Protocol (NEAR) Unique?
NEAR Protocol uses its Nightshade technology to greatly improve transaction speed. Nightshade is a type of sharding in which sets of validators (network participants) process transactions in parallel across multiple sharded chains, increasing the overall capacity of the blockchain. Unlike traditional sharding, the shards in Nightshade produce “chunks” of the next block. This allows NEAR Protocol to handle up to 100,000 transactions per second with near-instant transaction finality due to a one-second block cadence, while keeping transaction fees nearly zero.
NEAR Protocol also simplifies the onboarding process of other blockchains by offering human-readable addresses and building decentralized applications with a familiar registration process. In addition, it provides developers with modular components to help them quickly start projects like token contracts or NFTs.
How is the NEAR Protocol secured?
NEAR uses a proof-of-stake consensus variation it calls Doomslug. Doomslug is a two-round consensus process in which a block is considered finalized as soon as it receives the first round of communication. This allows for near-instant finality by having validators take turns producing blocks, rather than competing directly based on the size of their stake.
What is the Circulating Supply of NEAR?
At the current time’s writing (January, 2023), there are around 850 million NEAR tokens in circulation. NEAR protocol price is determined by its market cap and circulating supply.
Final Thoughts
NEAR Protocol’s Layer 1 network brings immense scalability, but more importantly, it’s built and updated by its community. In the rulebook of crypto, the community sits at the very top. The same applies for the dua app ecosystem, connecting fragmented communities worldwide. Our matchmaking environment will soon integrate a financial layer with the upcoming DUA token. Learn more about DUA here and follow us on Twitter to stay updated!