NEAR Protocol: Diving into the Heart of a Dapp-Centric Blockchain

The NEAR Protocol blockchain positions itself as a revolutionary platform aiming to simplify the interaction between developers and the general public in the field of decentralized applications (Dapps).

We will present the key elements that make NEAR an innovative blockchain. We will discuss its support for developers, its significant role in the advent of Web 3.0, as well as the special mechanisms Nightshade Sharding and Doomslug that power its operation. We will explore NEAR’s characteristics and its goal of becoming the leading platform for application development, making blockchain technology accessible to everyone. Without further ado, let’s begin!

Foundation of NEAR

🔹 Context and creation

In 2018, NEAR Protocol emerged under the initiative of Erick Trautman, an entrepreneur with a solid background on Wall Street and founder of Viking Code School. Through this project, the ambitious goal is to facilitate the transition to Web 3.0, marking a crucial step in the evolution of decentralized applications (Dapps).

🔹 The three components of the NEAR ecosystem

➮ NEAR University for developers

NEAR fully commits to young developers by offering NEAR University. This platform provides blockchain courses, ranging from intermediate to expert levels, aimed at training the next generation of talent in blockchain development. I’m not a developer, but we think it’s a really good initiative from the project.

➮ NEAR Academy for Dapps

The NEAR Academy focuses on practical learning of decentralized application development on the blockchain. It aims to equip developers with the necessary skills to design innovative and functional Dapps.

➮ NEAR Protocol, the blockchain itself

At the heart of this ecosystem, the NEAR Protocol represents NEAR’s blockchain. It offers a robust infrastructure for implementing DeFi protocols, managing decentralized autonomous organizations (DAOs), and creating and exchanging non-fungible tokens (NFTs). NEAR thus positions itself as a key player in the evolution of the blockchain landscape, providing a comprehensive platform for the development and adoption of decentralized technologies.

Technical Features

🔹 Blockchain Architecture

➮ NEAR as a Layer 1 blockchain

NEAR stands out as a Layer 1 blockchain, providing a fundamental foundation for decentralized applications. This position grants it high transaction execution speed, thanks to its design optimized for the direct processing of operations.

Some statistics:

• Average gas fee per transaction: $0.0001
• Average block time: 1.2 seconds
• Average number of transactions per day: > 1M : Link to NEAR Blockchain

We want to emphasize that Near maintains its average block time well. On December 1, 2023, Near experienced a stress test due to registrations, with a peak of transactions reaching almost 14 million and 59,738 blocks added. (This surpasses Avalanche, which reached a peak of almost 8 million transactions in one day, and approaches Polygon, which recorded 16.5 million transactions in one day with registrations).

If we calculate:

• Number of seconds in 24 hours / Number of blocks created in 24 hours We get the average block time on Near at the peak of the stress test. we will spare you the calculation; the exact result is 1.44.

We can conclude that at the peak of the stress test, the Near blockchain clearly held up without any issues.

➮ Proof of Stake (PoS) Method

By adopting the Proof of Stake (PoS) method, NEAR ensures fast transaction processing while eliminating the disadvantages associated with mining. This approach earned NEAR the “carbon-neutral” certification by South Pole in February 2021, highlighting its commitment to reduced ecological footprint.

🔹 Aurora Protocol and Rainbow Bridge

➮ Integration with Ethereum through Aurora

NEAR distinguishes itself with the Aurora protocol (@auroraisnear), a solution allowing developers to interact with the Ethereum (ETH) blockchain via the Ethereum Virtual Machine (EVM). This integration offers full compatibility between Dapps developed on Ethereum and NEAR Protocol , facilitating seamless token exchange between the two blockchains.

➮ Development of Rainbow Bridge for token transfers

The innovative Rainbow Bridge, powered by the Aurora protocol, facilitates token transfers between the Aurora, NEAR, and Ethereum ecosystems. This technological advancement contributes to interoperability between different blockchains, expanding possibilities for token exchanges and usage within an extended ecosystem.

☞ NEAR aims to become the go-to platform for DApp creation, and the project is on the right track.

Scalability and Interoperability

🔹 Scalability Challenges in the Context of DApps

DApps, continually expanding, have raised the crucial challenge of scalability for many blockchains. This challenge entails ensuring network resilience in the face of an exponential increase in users and transactions. There have been several stress tests on blockchains with registrations.

🔹 The Sharding Solution

➮ Horizontal Data Fragmentation

To address this challenge, NEAR adopts the sharding method, an innovative approach to horizontal data fragmentation. This method lightens the data load, thereby reducing the energy required for their manipulation while decentralizing the network.

➮ Comparison with Ethereum 2.0 Implementation

While Ethereum plans to integrate sharding with version 2.0, NEAR is ahead in implementing this solution, offering an earlier and more effective scalability perspective.

🔹 Nightshade Sharding

➮ Exclusive Protocol to Handle 100,000 Transactions per Second

NEAR distinguishes itself with its exclusive protocol, Nightshade Sharding. Unlike traditional sharding approaches, Nightshade models data processing as a single blockchain, with each block containing transactions from all shards. This ingenuity enables NEAR to handle up to 100,000 transactions per second, a significant technological feat.

➮ Network Optimization through Chunks

The use of Chunks, specific pieces per shard, optimizes the network by allowing each node to validate only the transactions of its shards. This segmentation not only enhances processing speed but also strengthens network security by reducing the complexity of data retrieval within a vast set.

Doomslug Consensus System

🔹 Block Creation with Doomslug

➮ Variant of Byzantine Fault Tolerance (BFT) Consensus

Block creation on the NEAR blockchain is orchestrated by the Doomslug consensus system. This innovative solution represents a variant of the Byzantine Fault Tolerance (BFT) consensus, a proven method in decentralized systems.

➮ Differences from other BFT systems, such as Tendermint

Unlike conventional BFT systems like Tendermint in the Cosmos Network, Doomslug optimizes the validation process by starting block verification from the first round of validator voting. In case of detecting a malicious user, the process restarts, thus eliminating potential vulnerabilities. This innovative approach significantly reduces interruptions in block creation, enhancing the efficiency of the NEAR network.

Utility of the $NEAR Token

🔹 Transaction Fee Payment Function

➮ Low Fees thanks to Proof of Stake

The NEAR token plays a crucial role as a means of payment for transaction fees on the NEAR blockchain. Thanks to the Proof of Stake (PoS) method, users benefit from minimal transaction fees, offering a cost-effective experience.

🔹 Validator Rewards and Token Delegation

Validators, or validator nodes, are rewarded in $NEAR tokens in proportion to the amount of tokens they hold. Users who wish to participate in securing the network can delegate their $NEAR tokens through validation pools, allowing them to earn rewards while contributing to network stability.

🔹 Governance Tokens and Voting Mechanism

Tokens are not limited to a transactional role. They also serve as governance tokens, allowing their holders to influence decisions related to the NEAR ecosystem. A voting system is in place, giving NEAR holders the opportunity to actively participate in shaping the project’s future direction.

🔹 Inflation Limit and Automatic Burn System

NEAR is committed to maintaining a token inflation rate of less than 5% through an automatic burn system. Approximately 70% of collected transaction fees are automatically burned, contributing to prudent token supply management and preserving the value of NEAR.

🔹 $NEAR Tokenomics

• The famous pie chart illustrating token distribution can be found in the following link: NEAR Token Supply and Distribution

• By visiting the link below, you’ll find the $NEAR token distribution schedule. In truth, the release is quite “clean” compared to Aptos $APT (it’s hard to do worse) : NEAR Token Distribution Schedule

• The total supply of $NEAR is infinite ∞ like Ethereum, with an inflation rate of approximately 5% at the time of writing.

• NEAR Protocol has a burning mechanism system where 70% of transaction fees are burned and 30% are redistributed to the smart contract that initiated the transaction.

Opinion on Near Protocol

🔹 Excellent User Experience (UX)

• The first thing that struck me is that Near doesn’t operate with traditional addresses (like: 0x…), but directly with customizable IDs (similar to Ethereum Name Service, ENS, on Ethereum). Upon first connecting to a wallet on Near, you’ll be prompted to create an ID of your choice, all for free (unlike ENS). We find this approach greatly simplifies transactions, eliminating the need to copy long and hard-to-remember addresses, with the risk of making mistakes. If you want to send funds to a friend, you simply enter their ID!

• Secondly, transaction fees are low, and the blockchain is fast.

• Thirdly, applications built on Near are well-designed and user-friendly, following a specific theme. This makes them appealing to use and facilitates understanding.

🔹 Sharding, the best technology for scaling?

From my experience, sharding is currently the technology that works best for scaling seamlessly. It’s a way to parallelize transactions and thus handle them at a higher rate. We think Near has integrated this technology well with its own twist, and so far, everything works perfectly. It’s no coincidence that sharding is part of Ethereum’s roadmap!

🔹 Near, the blockchain for DApps

Near aims to become the go-to blockchain for creating decentralized applications, especially with the BOS (Blockchain Operating System), which allows Near to position itself “above” other blockchains to provide an interface and interoperability, thus facilitating DApp creation. BOS Documentation Near Data Availability

In conclusion, NEAR Protocol excels in simplifying DApps through its educational ecosystem, innovative technical solutions, and high-performance blockchain.

Backed by significant fundraising, a competent team, and advanced features, NEAR is well-positioned to shape the future of blockchain with its commitment to scalability, interoperability, and decentralized governance.