NEAR Protocol

What Is Near Protocol (Near)?

The NEAR Protocol is a dApp platform that aims to be as user and developer-friendly as possible. Near's native token, NEAR, is utilized on the platform for paying transaction fees and purchasing storage space.

The Near Protocol is a layer-one blockchain system that helps developers to have a solid foundation for creating decentralized applications (dapps). Protocols like Near are considered competition for Ethereum, the most prominent layer one blockchain.

The success of a layer one network is measured by its ability to keep transaction costs and speeds steady even as traffic levels increase. Layer-one alternatives like Near focus on these two areas to address Ethereum's scalability and cost problems, which have plagued the platform in recent years.

Compared to Ethereum, the Near Protocol is a swifter and cheaper alternative. Even more crucially, it claims to handle 100,000 transactions per second. Solana, Ethereum's main competitor, processes fewer than 3,000 transactions per second. Ethereum's typical transaction volume is in double digits per second. Bitcoin generates fewer than ten.

NEAR Protocol is a decentralized Proof-of-Stake (PoS) blockchain that enables rapid, low-cost Defi transactions. NEAR competes with Avalanche, Solana, Cardano, Algorand, and Ethereum's latest version.

Here’s everything you need to know about Near Protocol (NEAR).

Who Created Near Protocol (NEAR)?

Alexander Skidanov and Illia Polosukhin, both native Ukrainians with computer science and mathematics degrees, founded NEAR in Zug, Switzerland. After making changes to the open-source Ethereum core in 2017, they began development on the NEAR Protocol. In August 2020, the mainnet NEAR was released.

Its headquarters are in San Francisco, as with many cutting-edge software companies. Skidanov and Polosukhin sought to improve upon Ethereum without resorting to Layer 2 scalability.

Near protocol raised a total investment funding of 533.7 Million through 8 rounds of financing in 2018. The last round of funding of $350M from Tiger Global happened in May 2022.

How Does Near Protocol (NEAR) Work?

Here is how NEAR works.

Proof of Stake

Proof of Stake (PoS) evolved as an alternative to the energy-intensive Proof of Work consensus technique. POS safeguards the blockchain against a 51% assault, in which a minority of miners can control the network and compromise its integrity.

As a more environmentally friendly alternative to PoW, NEAR implemented PoS on the chain.

Nightshade

NEAR's Nightshade is a handy tool. The Nightshade sharding technology is the backbone of NEAR. By splitting out the process of validating transactions and confirming them over numerous nodes, or "shards," the mainnet can handle less work.

Ethereum is an excellent illustration of the latter case because it processes all transactions on the mainnet despite plans to introduce Sharding with ETH 2.0. Because of this, investors have had to wait long periods for transactions to conclude and pay high gas prices.

Rainbow Bridge

Rainbow Bridge solves Ethereum's weak cross-chain interoperability. The Rainbow Bridge is a link between the Ethereum and NEAR blockchains that supports the trading of NEAR cryptocurrencies, ERC-20 coins, Wrapped tokens (such as WBTC, WETH, etc.), and stable coins like USDT, USDC, UST, etc. (BAYC, CryptoPunks, etc.).

Instead of moving assets between chains in one continuous transaction, the bridge locks the required number of assets on the sending chain and replaces them with tokens of equal value on the receiving chain.The bridge's secured supply spread among numerous entities makes them less vulnerable to theft.

Aurora

Aurora is a Layer-2 solution on the NEAR blockchain that helps developers to reach a wider audience and deploy their Defi apps on Ethereum-compatible platforms. It’s the chain's third and final distinguishing feature.

The Ethereum Virtual Machine (EVM) and a cross-chain bridge are the heart of Aurora, allowing developers to connect their Ethereum blockchain and assets quickly.

Aurora allows programmers to combine the well-known features of Ethereum with the low transaction costs and high throughput of the NEAR Protocol.

NEAR's rapid expansion in the Defi space is significant because of the aforementioned capabilities.

What Is NEAR Coin Used For?

NEAR is used to pay for storage and transactions. Additionally, token holders who contribute to network consensus by validating transactions can stake NEAR tokens. NEAR Protocol aims to build a functional and accessible platform for programmers and end users.

What Is Near Protocol (NEAR) Trying To Solve?

The Near Protocol is a decentralized platform that seeks to solve the scalability problem by providing the infrastructure for resource-intensive decentralized applications (dapps). To achieve this, the Near Protocol uses sharding, a type of database partitioning that breaks up large data sets into smaller pieces so they can be more easily manageable.

The Near Protocol can process transactions in parallel by sharding, significantly improving its scalability. Also, NEAR uses less energy because it doesn’t run on proof-of-work but instead on proof-of-stake.

This makes NEAR much more scalable than other protocols, such as Ethereum.

Additionally, NEAR's novel consensus algorithm, Nightshade, is designed to be more energy-efficient than Proof-of-Work. This makes NEAR more eco-friendly than other protocols as well.

What Makes Near Protocol (NEAR) Unique?

Here are features that make NEAR unique from other layer-1 blockchains:

High Speed

Transactions at NEAR are finalized within a second, much quicker than the 14 seconds required by Ethereum and the 10 minutes required by Bitcoin. It restricts the gas used in each block so that blocks are reasonably processed.

High Throughput

According to NEAR, its current highest throughput is about 100,000 transactions per second (tps), which is higher than Solana's 65,000 tps. However, because of the current lack of activity, the blockchain only processes between 5 and 20 tps.

Low Fees

NEAR ensures its platform is easily accessible to consumers and developers through low transaction fees. A typical transaction will only set you back a few cents. The fees pay the node holders, who execute the trades, just like in any other blockchain.

Interoperability

NEAR is compatible with the broader blockchain landscape thanks to the Octopus Network, Aurora EVM, and various cross-chain platforms to facilitate frictionless asset transfers from NEAR to other prominent blockchain platforms.

Human Clear Names

Account names in NEAR can be between two and sixty-four characters long, and they all terminate in the near tier-one domain (e.g., John. near). Therefore, unlike blockchains that rely on public key tags, conducting transactions on NEAR is much less complicated.

Developer friendliness: NEAR is as user-friendly as possible for programmers. It provides a complete software development kit (SDK) for rapidly creating contracts and can run code written in AssemblyScript and Rust, thanks to its WASM VM. It helps to lower the entry barriers.