NEAR Protocol is a scalable Layer-1 blockchain that aims to be as user-friendly as possible.
With the goal of achieving mainstream adoption, NEAR prioritizes accessibility and interoperability with other networks.
According to its whitepaper, “applications deployed to the platform should be seamless to use for end users and seamless to create for developers.”
NEAR also aims to tackle the Blockchain Trilemma of being scalable, decentralized, and secure.
Compared to Bitcoin and Ethereum, NEAR transaction fees are very low, just like other PoS networks.
It does not consume large amounts of electricity for validation and has been rated carbon neutral by the global climate solutions provider, South Pole.
What is the NEAR token?
The native token of the platform is the NEAR token.
NEAR Protocol generates new tokens at a rate of 5% of the total supply every year, a majority of which are given as rewards to validators.
Similar to Solana’s and Avalanche’s delegated PoS systems, staking validators who secure the network are paid in NEAR tokens proportional to their overall stake.
To offset the 5% inflation from token generation, NEAR also employs a fee burn mechanism in that 70% of all transaction fees are burned.
This means that the network becomes more disinflationary as usage increases.
Network security is maintained through slashing, which is a penalty system applied to a validator’s stake for inactivity, dishonest validations, and other malicious behavior.
Unlike other PoS networks, NEAR does not punish users who delegate their funds to a validator. If a validator gets slashed, users only stand to lose potential rewards instead of a portion of their delegated stake.
How does NEAR work?
The NEAR protocol’s approach to solving the Blockchain Trilemma involves a process called sharding.
This is a horizontal scaling feature that splits a single dataset across multiple databases.
In doing so, it allows for parallel processing and a more balanced distribution of the network based on the computational resources available.
Each partition or shard consists of its own data and can process transactions in unison with other shards, which then increases the overall network throughput.
Thanks to sharding, NEAR claims it can process up to 100,000 transactions per second.
While sharding is not unique to NEAR Protocol, the platform has built on this concept by introducing a dynamic re-sharding feature called Nightshade.
Unlike sharding on other platforms that have a static amount of shards, NEAR Protocol will regularly adjust this number based on user demand.
This enables NEAR to reduce the average cost of using the network while maintaining the potential for high throughput.
Nightshade would also be able to create and merge shards as required by the computational needs of the network at any given time, and it would have no cap on the total number of shards. Theoretically, this could let NEAR’s transaction throughput scale higher than Ethereum 2.0.
Central to its goal of achieving mainstream adoption, NEAR has boosted interoperability with existing networks through its Aurora Network.
Aurora offers compatibility with the Ethereum Virtual Machine (EVM), which makes it fully interoperable with Ethereum and its different wallets and tools.
This makes NEAR a familiar environment for Ethereum developers to work in while at the same time offering better scalability and much lower transaction costs.
In fact, while the base fee is denominated and paid in ETH, gas is currently subsidized (a.k.a. free) on Aurora.
Team Background
Launched in April 2020, NEAR is the brainchild of former Google engineer Illia Polosukhin and Microsoft developer Alexander Skidanov.
NEAR has a highly-skilled team of experienced developers, including several International Collegiate Programming Contest (ICPC) gold medalists and winners.
Prior to co-founding NEAR, Illia Polosukhin managed a team of deep learning and natural language understanding researchers as an Engineering Manager at Google Research.
He also previously worked at Salford Systems as a Software Engineer where he developed new tools for big data predictive analytics.
Two-time ICPC medalist, Alexander Skidanov started his professional career with Microsoft in 2009, then he joined memSQL in 2011 as an Architect and Director of Engineering.
He has also worked with OpenAI as a research engineer consultant.
Core maintenance, governance, and ecosystem funding of the NEAR Protocol are led by the NEAR Foundation, a non-profit organization based in Switzerland.
NEAR Inc., which is based in the U.S., focuses on R&D to propose iterations to the reference codebase of the NEAR blockchain.
Notable Investors: Coinbase Ventures, Alameda Research, Dragonfly Capital, Pantera Capital, Three Arrows Capital
Token Metrics:
- Holder Addresses: 21M on NEAR, 31K on Binance Smart Chain
- Liquid Supply: 841 M NEAR
- Circulating Supply: 812M NEAR
- Max Supply: 1.1B NEAR
- Inflation Rate: 20.51%
Notable Projects:
- Ref Finance: DEX, lending protocol, synthetic assets
- Meta Pool: liquid staking protocol
- OIN Finance: stablecoin platform
- Trisolaris: DeFi suite (swaps, staking, farming, bridges)
- DODO: DEX