NEAR Protocol is a platform that hosts decentralized applications by leveraging blockchain technology. It also consists of smart contract functionality which is widely compared among other popular cryptocurrencies.
There have been many technological advances in the blockchain market since its inception. The decentralized apps (Dapps) have created an environment where it has become resistant to censorship of centralized agencies or networks. They also made transactions easier for individuals who do not have much understanding of blockchain technology. However, many projects have faced problems in increasing their storage capacity which is required to store substantial amounts of data generated by dapps.
NEAR protocol is a development platform designed to overcome these obstacles with the help of sharding technology. Sharding breaks down large data into smaller bits which can then be stored in separate servers thereby increasing the data storage capacity of blockchains.
The shards on NEAR are different from blockchains such as Polkadot because in NEAR all shards are viewed as part of the same blockchain. NEAR achieves this by a Proof-of-Stake consensus mechanism called Nightshade.
They have also managed to boost scalability and reduce costs for developers and end-users of the platform.
There are several factors the sets Near Protocol apart from other blockchains in the market. So, let us try to understand what makes NEAR, highly scalable, interoperable, and cost-efficient compared to other networks.
NEAR aims to create an environment where developers can freely move assets and data between blockchains. They prefer their products to run on multiple blockchains at the same time.
Keeping all these aspects in mind they created a bridge between NEAR and Ethereum, called as Rainbow Bridge which helps in connecting Ethereum and NEAR blockchains. The NEAR team announced the launch of Rainbow Bridge on 6th April 2021.
With the induction of this bridge, Ethereum developers do not have to choose between the two blockchains and worry about interoperability.
The bridge created is decentralized in nature because anyone can deploy a new bridge or use an existing bridge without any additional permission from NEAR Foundation.
The transactions on the platform are validated appropriately by using the Proof-of-Stake mechanism which makes it difficult and expensive for an adversary to attack the network and validate false information. Validators earn block rewards in return for validating the transactions. There are three types of validators that are chunk producers, block producers, and hidden validators.
They are responsible to collect transactions for a shard, produce and communicate shard blocks, which are called chunks.
They ensure that data is available for other parties in the system while they receive transactions, produce chunks, exchange the chunks and parts of the chunks between each other.
These validators are spread among all the shards, and they provide security for the system by keeping a check on the block producers. They make sure the block producers are producing accurate blocks and the data is available accordingly.
The NEAR Wallet is NEAR Protocol’s non-custodial web wallet which uses local storage on the user’s computer to store private keys in an open file. This allows users to control their funds, data, and identity which is in line with the vision NEAR has about the decentralized web.
It also helps in expanding the NEAR developer community which creates a vibrant finance ecosystem.
The new block production technique introduced by the NEAR protocol is known as Doomslug. The affirmation we get that all well-formed blocks will not be revoked once committed to the blockchain is called “finality.” Doomslug makes sure that blocks achieve finality within seconds and is done by having validators take turns producing blocks rather than competing solely based on their stake.
Let us try to understand this with an example, so assuming Jelle is entering a store to purchase a coffee for himself and in return, he provides the shopkeeper with his credit card. Now the shopkeeper swipes the credit card and gives a confirmation thereby finalizing the transaction. The same thing goes with finality on a blockchain, but it includes validators and blocks in the process.
This is vital while designing a blockchain consensus protocol because it assures users that once their transactions go through, they cannot be changed or reversed.
The NEAR Foundation has initiated a program called as NEAR Grants Program (NGP), which will support projects that help in growing the NEAR ecosystem and its community. The total grant that will be provided will be $1 million.
Grain is one of the few projects that were successful in securing a $50,000 development grant from NGP for NEAR protocol compiler support, a NEAR SDK, feature bounties, and more. The development of smart contracts on the NEAR blockchain will be made possible with the support of the GRAIN language.
This will give NEAR developers an additional language to choose from while developing smart contracts. This will create enable developers with more tools that will help them write and maintain code in an accessible manner.
Vorto Gaming is a play-to-earn gaming platform that provides gamers access to an economy where they can earn and resell items to other players through its marketplace while playing games.
Vorto Gaming was able to secure a grant of $132,000 which will include 25,000 NEAR tokens and $10,000 to build on NEAR Protocol. The gaming assets on the platform are represented as NFTs which allow players to have ownership of the items.
Mintbase allows you to mint distinct types of digital assets as NFTs which can range from event tickets, crypto art, and so on. NFTs can be created by anyone and then can be readily available for sale, either on NFT marketplaces like Opensea or directly on the platform’s marketplace.
The reason it switched from Ethereum to Mintbase was comparatively higher gas fees. However, there are several other reasons as well and one of them being the Rust or AssemblyScript for smart contracts on NEAR which makes it easier for developers to write code.
NEAR protocol was built by two bright minds i.e., Alexander Skidanov and Illia Polosukhin. They met in 2018 through the Y Combinator start-up accelerator program. If you are not familiar with Y Combinator then for your information, it is responsible for launching some of the well-known projects in the tech and blockchain industry including Coinbase, Dropbox, Airbnb, Filecoin, and even Reddit.
Alex has previously worked as a software engineer at Microsoft and was the director of engineering at MemSQL. Illia was a part of Google’s research department and developed technologies that are now used in Google Translate.
The team now includes over 50 people from around the world. The mainnet of the NEAR protocol was voted for and launched in October 2020 and since there has been tremendous development on the blockchain. The network even aims to explore mobile phones to adjust the additional capacity for running nodes. The product development updates are on track with the roadmap.
NEAR is the native currency of the NEAR blockchain. There are 100 seats on each shard of the NEAR blockchain of which you need to have at least one to become a validator. The price of each seat is determined based on total amount of NEAR being staked in that shard. One can stake NEAR tokens to become a validator.
Also, the network fees are paid by burning NEAR tokens and it powers numerous NEAR smart contracts. The NEAR token holders can participate in the on-chain governance of the NEAR platform.
The project managed to raise $12.1 million even before they had built something concrete and later went on to raise another $21.6 million after launching their mainnet. Many projects on the Ethereum network have found NEAR to be a viable alternative because of its high fees and scalability.
NEAR can process somewhere around 100,000 transactions per second (TPS) and it has been able to grab the attention of major companies around the world. The blockchain is so technically sound that it helped developers to develop their products without any hindrance.
At the time of drafting this report, the NEAR coin had gained more than +70% and one of the reasons for that spike could be because of the engineering update of near-api-rs and new near-cli. Also, many gaming projects are being built on NEAR blockchain. It would be wise to let the price settle a bit before building a position. However, we feel that overall, NEAR has a lot of potential with the adoption it has been gaining in the market and the level of hype it could maintain in the market for itself.
The project is well managed and flaws if any are minute and not noteworthy.
It has been able to keep its cost 10x lower than Ethereum and it has partnered with more than +60 institutions worldwide. It has already gained the momentum it needs to succeed but only time will tell how well it can maintain the same.
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