NEAR Protocol is a blockchain that enables smart contracts, aiming to simplify the development of decentralized apps. It employs a sharding mechanism and utilizes Proof of Stake consensus to achieve both speed and scalability.
The NEAR platform facilitates cross-chain functionality, allowing developers to construct decentralized applications (dApps) through the Rainbow Bridge and Aurora – a layer-2 solution. In recognition of its carbon neutrality, NEAR was honored with the Climate Neutral Product Label in 2021.
What Is NEAR Protocol (NEAR)?
NEAR Protocol, co-founded by Alex Skidanov and Illia Polosukhin, is a layer one next-generation blockchain. The NEAR Collective created this blockchain with the aim of delivering an intuitive user experience and greater scalability. Furthermore, The NEAR Protocol white paper outlines their vision for a more accessible and sustainable business model for decentralized applications that would benefit developers.
NEAR Protocol adopts a more people-oriented approach towards its blockchain features to fulfill its mission. Furthermore, An example is the substitution of cryptographic wallet addresses with easily understandable account names. Furthermore, NEAR Protocol allows users to engage with smart contracts and dApps without possessing a wallet.
History Of Near Protocol (NEAR)
The NEAR Protocol was initially created in 2017 as a machine-learning platform by Illia Poloshukin and Alexander Skidanov. At its inception, the project went by the name Near.ai. Polosukhin holds a master’s degree in applied math and computer sciences from Ukraine and has gained experience as a software engineer at prominent tech companies like Google. Likewise, Alexander Skidanov possesses a master’s degree in computer sciences from Russia and has contributed his technical skills to industry giants such as Microsoft.
How Are New NEAR Created?
The NEAR platform utilizes a proof-of-stake mechanism to verify transactions. Validators participate by running nodes and staking their tokens as a deposit to ensure ethical behavior. In an innovative approach called “threshold proof of stake,” the platform holds a token auction and provides “seats” to validators. Furthermore, a given validator may assume one of several possible roles based on the minimum number of tokens they possess from the auction.
- Block Producer
- Chunk Producer
- Hidden Validator
Validators are periodically rewarded with NEAR tokens based on the amount they stake. However, the protocol limits the creation of new tokens to a maximum of 5% per year.
The NEAR Token
The NEAR blockchain operates with its native fungible token known as NEAR coin. This token has a maximum supply of 1 billion and serves three primary purposes:
- Facilitating payments for executing smart contracts
- Processing transactions
- Storing data on the platform.
In the staking process, individuals used to operate a validating node and were rewarded for their computational effort. As a governance token, NEAR plays a crucial role in determining the network’s development. Currently ranked #28 on Coin Market Cap, 1 NEAR carries a value of $3.07.
What Can You Build On NEAR?
The NEAR platform hosts its native token and provides a home for several other unique digital assets. These include additional tickets, stablecoins, and NFTs that can either be in-game collectibles or representations of real-world assets. Additionally, the NEAR platform offers a wide range of applications, encompassing games, DeFi, blockchain marketplaces, and crypto exchanges. Now let’s explore some of the most popular projects within the NEAR ecosystem.
Mintbase: The first NFT minting platform built on the NEAR Protocol is here. It allows users to easily create NFTs at a minimal cost, eliminating the complexities of other similar platforms.
ZomLand: This engaging and interactive NFT card game offers players the exciting opportunity to lead an army comprised of zombies and monsters, all while earning rewards.
Paras 2.0: Paras 2.0 functions as a versatile social NFT marketplace, empowering users to effortlessly create, trade, and collect an extensive range of digital collectibles.
Burrow: The non-custodial pool-based interest rates platform allows users to earn interest by supplying assets and access liquidity through borrowing against those assets.
Skyward Finance: A fully permissionless open-source launchpad empowers projects to safely launch their tokens, even without initial liquidity.
The NEAR blockchain is designed with an architecture that addresses a common challenge known as the “blockchain trilemma.” This term captures the difficult balance between scalability, decentralization, and security in blockchain systems. Unfortunately, achieving all three aspects simultaneously proves to be challenging, often resulting in compromises.
NEAR tackles the trilemma by implementing Nightshade, a unique “sharding” solution within its architecture. This approach allows for horizontal scaling, ensuring efficient performance and addressing the challenge at hand. Now let’s delve into what this means.
Sharding simplifies the computational workload on nodes by dividing the network into smaller fragments called shards. This ensures that each node only needs to execute the specific code relevant to its assigned shard rather than running the entire network code. As a result, the network’s scalability is enhanced, allowing for a higher transaction throughput.
Nightshade enables the shards to manifest as a unified chain of data while efficiently distributing the computational workload needed for data maintenance into manageable “chunks.”
Validator nodes handle the chunks by processing and adding data to the chain. This architectural design enhances security as it reduces potential points of failure, with participating nodes individually responsible for smaller sections of the chain. Through its sharding mechanism, the NEAR Protocol achieves an impressive processing capacity of approximately 100,000 transactions per second while maintaining negligible transaction fees.
NEAR Protocol enables network participants to seamlessly transfer ERC-20 tokens between Ethereum and NEAR using an innovative two-way bridge application called Rainbow Bridge. This process involves the secure locking of Ethereum tokens in a smart contract while simultaneously creating corresponding assets on the NEAR platform. Notably, this representation is fully reversible.
Aurora presents itself as a Layer 2 scaling solution, effectively combining NEAR’s scalability with Ethereum’s developer tooling. Operating on the NEAR Protocol, Aurora empowers the execution of Ethereum dApps within the NEAR ecosystem. With its EVM compatibility, developers can seamlessly run Ethereum smart contracts on the NEAR blockchain while enjoying reduced transaction fees.
Should you buy NEAR?
According to most evaluations, NEAR exhibits a strong bullish trend. It is potential for growth in both the short and long term. As the NEAR ecosystem expands, the value of the coin is expected to rise. Undoubtedly, the protocol stands out as one of the most exciting projects in the crypto industry. Investing in NEAR at this stage would mean actively supporting its development.
How To Buy NEAR Protocol (NEAR)
NEAR is available on most of the primary crypto exchange services:
Steps to purchase NEAR
- To purchase the coin, an account must be created on the exchange that offers it. The completion of your purchase may require identity verification.
- Next, you might want a NEAR or hardware wallet to store your coin securely.
- Then, you can purchase the coin either through an exchange or a wallet. The purchased amount will be displayed on the corresponding platform. If there’s a need to withdraw NEAR from the exchange wallet, please review the withdrawal instructions.
How to stake NEAR
NEAR token holders can participate in the delegation process to earn rewards. By staking their tokens, they contribute to enhancing the network’s security while reaping benefits. Delegating tokens involve users depositing and staking their assets within a specific pool, which a validator activates.
The NEAR protocol utilizes the PoS system to establish agreement among nodes in the network. Validators can participate by staking their NEAR tokens with PoS. Alternatively, token holders who opt not to run a node can delegate their stakes to preferred validators.
NEAR Consensus Mechanism
To achieve agreement within the network, NEAR uses a mechanism called Proof of Stake (PoS). Nodes that intend to validate transactions and create blocks must invest their NEAR tokens as a stake to be eligible for participation. Furthermore, The greater the stake they hold, the more influence they wields in reaching a consensus.
Token holders who do not wish to validate can delegate their stake to a validator node of their choosing. NEAR utilizes an auction system, selecting validators every epoch, which occurs approximately every 12 hours.
NEAR Node Types
The NEAR network consists of three distinct node types: Validator Node, RPC Node, and Archival Node.
Validator nodes play an active role in the NEAR blockchain. Some validators validate “chunks,” which are groups of transactions from a shard. On the other hand, other validating nodes generate blocks that include chunks from all shards. A real-time view of NEAR validator nodes can be accessed through the NEAR Explorer.
NEAR RPC nodes serve as providers of RPC services, offering public RPC endpoints to developers. NEAR encourages all participants to establish and operate their own RPC node, thus enabling them to deliver RPC services through an Open Source & Public Goods Grant.
NEAR archival nodes store the complete blockchain data, creating a historical archive of past states. Furthermore, These nodes are especially valuable for block explorers and businesses or dApps that require chain analysis.
NEAR Node Requirements
The NEAR platform has specific hardware requirements for effectively engaging with it using a validator node. These recommended hardware requirements are as follows:
- A minimum of 8 physical cores in an x86_64 processor (Intel or AMD) is required.
- Necessary CPU features comprise CMPXCHG16B, POPCNT, SSE4.1, SSE4.2, and AVX.
- The system should have 16GB DDR4 RAM.
- Storage capacity of 1TB SSD is recommended (NVMe SSD is preferred, although HDD suffices for local usage).
NEAR’s technical documents provide comprehensive information, including a cost estimation for setting up a validator node. Depending on the operating system in use, the expense can range from $180 to $330, with additional storage requirements.
NEAR Protocol — a potentially revolutionary project
In the crypto space, platforms that offer lower transaction costs and higher throughput play a crucial role. This becomes even more significant as mainstream adoption of crypto continues to grow. Developers who aim to create more efficient DeFi products are particularly drawn to NEAR’s attractive scaling solutions.
Furthermore, the future shines with promise for NEAR. However, can it surpass Ethereum’s dominance? Can it rival the popularity of the Polkadot? It may not be prudent to gauge its potential solely based on that. While NEAR has the potential to emerge as a frontrunner in the industry, it is crucial to focus on its present accomplishments.