The Near protocol is a blockchain platform that incentivizes a computer network that operates on dApps. This platform makes use of sharding to retrieve and scale data. Basically, this platform offers developers the option to launch and create dApps with the help of computer networks and nodes. Like decentralized storage systems, a distributed network of computers operates and maintains the Near platform.
In this article, you will learn about the Near protocol in general and find out how it works. Apart from that, you will also learn about the major features of Near and how each of these features benefits dApp developers. Furthermore, this article also discusses the major aspects of the NEAR coin. Finally, you will also learn about the major projects on the Near platform. Hence, to find out more, read on to the end of the article.
What Is Near Protocol? – A General Overview
According to Binance Academy, “NEAR Protocol is a layer-1 blockchain that uses Nightshade, a unique sharding technology, to achieve scalability. It was launched in 2020 as a decentralized cloud infrastructure to host decentralized applications (DApps). NEAR offers cross-chain interoperability through the Rainbow Bridge and a layer-2 solution called Aurora. Users can bridge ERC-20 tokens and assets from the Ethereum blockchain to the NEAR Protocol network.”
By bridging ERC-20 tokens and assets in the Near protocol network from Ethereum, users will have better access to higher throughput. This bridge is called the Rainboiw bridge. Furthermore, the transaction fees are low as well. Apart from that, the Near protocol also has the NEAR token, which is available to pay transactions and data storage fees.
In addition to that, the owners of NEAR tokens also have the option to stake their tokens on their NEAR Wallet. This way, they can receive rewards and can also vote on governance proposals.
The rise of the Near Protocol happened due to an increased demand for decentralized applications and non-fungible tokens. This is due to the fact that the major blockchain platforms like Bitcoin and Ethereum are facing various scalability challenges.
In recent times, the scalability challenges have been particularly noticeable on the Ethereum blockchain. For example, in many cases, there have been instances of higher gas prices and costs of transactions on the Ethereum blockchain. This happened due to heavy traffic, which is a big discouraging factor for both developers and users.
This is where the Near protocol helps crypto users and developers. It helps to address the major limitations of the Ethereum blockchain with the sharding mechanism. To learn more about how the Near protocol works, go to the next section of this article.
How Does The Near Protocol Works?
According to the Coin Telegraph, “Near Protocol is a decentralized application (DApp) platform that focuses on usability among developers and users. As a competitor of Ethereum, NearProtocol is also smart-contract capable and a proof-of-stake (PoS) blockchain. […] The native token, NEAR, is used for transaction fees and storage on the Near crypto platform.”
You can also use tokens to stake by the holders of the NEAR token, that is, the ones that wish to become the validators of transactions. This can also help in building a network consensus.
Currently, there has been a rise in decentralized applications in the crypto community. Nowadays, dApps are used in various areas like games and financial services. However, it is also a true fact that scalability is one of the major problems in most older blockchains.
Furthermore, this holds more true for blockchain platforms like Ethereum and Bitcoin. This is because most of these blockchains fail to handle a large number of transactions at the same time. In such cases, the speed of transactions becomes slow, and it also leads to further problems.
How Does The Near Protocol Solve Current Problems?
Near seeks to solve the problems of scalability with the process of sharding. With the help of the sharding strategy, Near breaks up the blockchain into smaller and more manageable ones. This helps to reduce excessive burdens on the network. These smaller blocks help to reduce computational load, which further increases transaction throughput.
The Near protocol makes use of the PoS system. The nodes that want to be transaction validators stake their NEAR tokens for participation consideration. Apart from that, token holders can also consider delegating their stake to their chosen validator if they do not want to operate a node.
As usual, the validators that have a larger stake in the platform hold a bigger influence on the consensus. They get chosen through an auction system at every 12-hour interval, which they call an epoch.
Furthermore, the Near platform’s cloud infrastructure also makes it possible to build DApps. Here, the cloud infrastructure combines serverless computing and decentralized data storage. Near makes use of hundreds of globally-located servers to offer this cloud service.
What Are The Major Features Of The Near Protocol?
Crypto.com explains – “In functionality, NEAR operates similarly to centralised data storage systems like Amazon Web Services (AWS), serving as the foundational layer upon which applications are constructed. However, in contrast to being governed by a single entity, NEAR is operated and maintained by a distributed network of computers.”
The following are some of the major features of the Near protocol that make it unique from all the major blockchains in the crypto world:
1. Sharding System (Nightshade)
In any blockchain, there are mainly three main functions – processing of transactions, communication of these transactions, and completion of blocks with each other. This helps to store the history of transactions in the network.
Hence, as the size of the network grows with time, it becomes more congested. Hence, it becomes more difficult for the blockchain to manage these nodes. This is why Near uses the sharding mechanism to allow growth in the capacity of the network.
Due to this high utilization of the network, it results in nodes splitting dynamically into many shards. This then helps to parallelize computing over these shards. As a result, this helps in the reduction of computational load in each node. With sharding, it is not necessary for a node to run the code of the entire network. It runs just the codes that are relevant to its shards.
2. Decentralization (Aurora)
To ensure decentralization in the platform, it is important to make the network permissionless. It means that the potential node operators will be able to join the network freely. Here, the platform uses a threshold proof-of-stake mechanism, which offers a fair and predictable character to the platform. As a result, powerful validators in the platform cannot pool. Also, it encourages wide-scale participation among the members of the network.
3. Usability-First Approach
The usability-first approach comes from the “progressive security” model. With the help of this approach, it is possible for developers in the platform to create a user experience that resembles web experiences.
Basically, the platform believes in the need for usability. This is because, the developers in the platform will create those apps only that offer more usability and value to their target users. Apart from that, Near also offers easy subscriptions, predictable pricing, simple onboarding, and simple usage. This helps users to get in tune with the platform fast.
4. Responsive Governance
The governance structure of the Near protocol allows rapid improvement. Furthermore, it also helps to retain the provision of helpful input and supervision towards the community. This ensures the independence of the protocol.
Near believes in retaining community-led creativity. As a result, this helps in better execution, faster decisions, and better representation within the network.
What Is The Near Token?
According to Crypto.com, “The NEAR token serves as the primary means for paying transaction fees and collateral for storing data on the blockchain. Stakeholders in the blockchain ecosystem, such as transaction validators, receive NEAR token rewards. Validators are rewarded every epoch, amounting to 4.5% of the total NEAR supply on an annualized basis.”
Here, the developers in the platform that create smart contracts also get a part of the transaction fees that their contracts generate. Moreover, the rest of the transaction fee is burned, which helps reduce the NEAR token’s scarcity.
Apart from that, the Near Protocol also has a treasury, which receives 0.5% of the total supply of NEAR tokens. This helps aim at reinvesting the ecosystem’s development. Additionally, the Near protocol also supports ‘wrapped’ tokens from other blockchains and NFTs. Furthermore, it also has an established bridge with the Ethereum network. This helps users to transfer ERC-20 from Ethereum to Near, as already discussed.
How To Buy Near Token?
The major token of the Near Protocol (NEAR) is available on all major crypto exchanges. To buy NEAR, you need to have a registered account with the platform and the crypto exchange from where you are buying. Furthermore, there are many crypto apps available that allow you to buy NEAR and also other top crypto coins with just a few clicks.
What Are The Major Projects Based On Near Protocol?
The following are some of the major projects that are based on the Near Protocol:
1. Mintbase
In the Mintbase platform, users are able to create and sell NearNFTs. The assets on the platform consist of crypto arts, event tickets, etc. On the platform, users are able to mint these assets as NFTs. Hence, it is possible to put them up for sale with the NearNFT marketplace or any other NFT marketplace.
The NFT minters are able to create a smart contract and limit the transfer of minted tokens. This helps in fraud and illegal transfer. Here, the platform focuses on creating different digital assets.
Earlier, this platform was present on Ethereum. It changed its platform due to the steep rise in the fees of Ethereum, which was due to network congestion.
2. Paras
Coin Telegraph explains – “Paras was designed to provide a unique solution: facilitating the validation and exchange of aging traditional collectible cards. Paras validates ownership via Near through fast inexpensive transactions. Simply put, it’s a digital card marketplace built on Near that seeks to reduce the burden on collectors to maintain their collectibles by ensuring that these do not wear out over time.”
In this platform, artists and collectors also have free access to the digital collectibles market. Basically, Paras wants to produce and develop crypto-native IP. This is because the platform believes that by creating new exclusive IPs, it will be able to tailor and design new experiences.
By doing so, the platform offers these digital assets to gain use cases and utility. As a result, these assets are able to create more value for collectors and creators.
3. NPunks
NPunks is a project of the type CryptoPunks, SolPunks, and TPunks. This platform is consistent with the Punks project.
According to Investopedia, these Punks are “considered a piece of art and a form of asset tokenization that’s highly valuable in the NFT marketplace. They sometimes sell for millions of dollars. There are 10,000 of these pixelated, punky-looking images that depict both male and female characters, as well as some that mimic zombies, apes, and aliens. Each punk is one of a kind.”
In this case, 10,000 NPunks will have their own rare traits. The collection of Punks will have 111 bots, 88 zombies, 24 apes, and 9 aliens.
The NPunks project also ensures fair participation. As a result, it offers everyone gets the chance to buy an NPunk. A buyer in the NPunks project is able to make a purchase randomly and also by keeping their identity a secret. However, the identity is given after the completion of the transaction. Later, the user is able to sell their NPunk in the secondary market after the minting of the NFT.
Final Thoughts
Hope this article was helpful for you to get a better idea of how the Near protocol works and its unique features. You can see that the sharding and decentralization aspects of the platform make it a faster and more secure platform than traditional blockchains. These factors make the platform a major option for future projects.
Do you have more information to add regarding the Near protocol? Consider sharing your ideas and opinions in the comments section below.
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