Near Protocol, a smart contract-enabled blockchain just like Ethereum, was launched in 2020 to incentivise developers to create and launch more decentralised applications (dApps). The Near Protocol employs the process of sharding to achieve greater scalability with significantly enhanced processing speeds, the two major drawbacks of existing blockchains.
Sharding involves splitting the main blockchain into sub-chains or shards like the branches of a tree. Each branch or shard has its own independent processing capability with a dedicated set of validators (or nodes). By doing so, each shard only bears a fraction of the total load. Such an architecture decongests the main chain and spreads the load horizontally, leading to faster operating speeds.
NEAR is the native token of the Near Blockchain.
How does Near Protocol work?
The Near Protocol uses the Proof-of-Stake (PoS) consensus mechanism for transaction validation. This means users must pledge a certain number of NEAR tokens to the blockchain to become validators (or nodes) on the network. The pledged amount is locked in during that period, and the nodes earn rewards in the native token for devoting their resources towards transaction authentication.
The sharding solution used by the Near Protocol is called Nightshade. The blockchain uses the following solutions to power its operations:
Nightshade: This scaling allows the blockchain to grow endlessly whilst only storing a portion of the complete data on each shard. It allows the blockchain to attain fast transaction speeds by dividing the in-process data into ‘chunks’ and maintaining a single chain of processed data. The nodes scrutinise these chunks and then add them to the main chain upon completion.
Nightshade reduces a lot of potential security failures as the nodes on each hard do not access the entire data being validated.
Aurora: This is a layer-2 protocol built on the Near blockchain (layer 1). It is designed to allow coders to create apps and deploy them atop the existing infrastructure. Thanks to the Rainbow bridge, the apps are Ethereum backed but deployable on the Near Protocol. Aurora uses the Ethereum Virtual Machine (EVM) with assistance from Rainbow Bridge to link smart contracts across both chains. It also lets users reap the benefits of low fees and higher throughput capabilities of the Near network.
Salient features of Near Protocol
The Near Protocol uses the ‘progressive security’ approach, which means users need to offer some very basic personal details when joining the Near network. And they can provide the rest of the details when they initiate their first transaction on the Near network. This ensures that the interface is user-friendly and resembles most web pages.
Moreover, the Near Protocol uses a unique consensus mechanism called Doomslug, which boosts efficiency while ensuring that ‘finality’ is achieved within seconds of transacting. The final means that the associated data can neither be tampered with nor reversed by anyone on the network once it is added to the blockchain. Validators produce blocks by taking turns instead of competing amongst one another based on the number of tokens staked by each node.
The ease of developing apps means that it is possible to devote greater mental capacity towards building apps with advanced capabilities. Some apps can even sign transactions based on user approval without the need for a user’s physical presence.
Also, Near can achieve transaction speeds of up to 1,00,000 TPS (transactions per second) with instant finality. This also means that the transaction fees on Near are 10,000x lower than that of Ethereum.
Projects based on Near:
Mintbase: A platform focused on simplifying the issuing and selling of NFTs while making it much cheaper.
Paras: An NFT marketplace that curates high-quality creations of select artists.
The NEAR token is currently trading at $8.55 with a market capitalisation of $5.45 billion. Currently, 638.89 million NEAR tokens are in circulation, with an upper limit of a billion tokens.