NEAR Protocol

Near is a decentralized development platform built on a sharded, proof-of-stake (PoS), layer-one blockchain that launched its mainnet in 2020. The platform is designed to provide an environment for decentralized applications (dApps) by overcoming some of the limitations of competing systems (such as low bandwidth, low speed, and poor cross-compatibility). Near also features a community network of innovators, creators, and contributors and supports the development of its ecosystem through Near Foundation's grant funding efforts.

The platform is also designed to be accessible for those with no in-depth knowledge of the blockchain. It achieves this, in part, through a system of accounts and access keys to them. Regular users can access dApps built on Near using their usual registration process and may not even know they are working with the blockchain. The design intent behind this is for developers to reach a wider audience and improve useability for those already used to working with dApps.

Near provides various modular components to developers to help them efficiently get their projects operational. The following are examples of the implementation of non-fungible tokens (NFTs), smart contracts, and dApps. A complete list of examples and their code is located in Near’s official GitHub repository.

$NEAR (Ⓝ) is the native cryptocurrency used by the Near Protocol network and has several different functions. It provides network security and operates as a unit of account and medium of exchange for its own resources and third-party applications. In the long term, the cryptocurrency is planned to become a store of value used by individuals, as well as contracts and DeFi (decentralized finance) applications.

Ⓝ can be used to transfer value across Near applications and accounts. This monetary function enables the creation of applications that use Ⓝ to charge for various operations, access to data, or other complex transactions. Ⓝ is exchanged within the network in a peer-to-peer manner, without requiring trusted third parties to oversee transactions.

Ⓝ is used to price the computation and storage of the Near infrastructure offered by node operators. Additionally, applications and external parties can use Ⓝ as a unit of account for their application services or to measure the amount of the exchange when Ⓝ is employed as a medium of exchange.

Near has released an Ethereum bridge known as the Rainbow Bridge, allowing users to redirect their tokens from Ethereum to Near. Near also worked on implementing support for the Ethereum Virtual Machine (EVM), the software stack that Ethereum uses to run dApps. The intent of this project was to enable developers to redeploy their Ethereum applications to Near with little or no change.

The Near Collective community focuses on updating Near’s original code and ecosystem. According to the community, its aim is to build a platform that is “secure enough to manage high-value assets like money or identity and performant enough to make them useful for everyday people.”

Flux, a protocol that allows developers to create markets based on assets, commodities, and real-world events, and Mintbase, an NFT “minting” (creation) platform, are examples of projects built on Near Protocol.

Near Protocol was founded by Erik Trautman, an entrepreneur with a background in market analysis and founder of Viking Education. His cofounders were Illia Polosukhin, an artificial intelligence researcher, and Alexander Skidanov, a computer scientist. Near Protocol’s team of developers includes several International Collegiate Programming Contest (ICPC) gold medalists and winners.

Near uses its Nightshade technology to improve transaction throughput. Nightshade is a variation of sharding, in which individual sets of validators process transactions in parallel across multiple sharded chains, increasing the overall capacity of the blockchain. In contrast to other sharding techniques, shards in Nightshade produce a fraction of the next block, called “chunks.” As a result, Near can achieve up to 100,000 transactions per second and near-instant transaction finality owing to a one-second block cadence while keeping transaction fees close to zero.

The tokenomics of NEAR constitutes one billion tokens broken down into the following ownership categories:

• 17.2% - Community grants
• 11.4% - Operation grants
• 10% - Foundation endowment
• 11.7% - Early ecosystem
• 14% - Core contributors
• 17.6% - Backers
• 6.1% - Small backers
• 12% - Community sale

NEAR Protocol launched its mainnet on April 22, 2020, with 1 billion NEAR tokens created at genesis. Of its additional supply, 5% is issued each year to support the network as epoch rewards, of which 90% goes to validators (4.5% total) and 10% to the protocol treasury (0.5% total). Thirty percent of transaction fees are paid out as rebates to contracts that interact with a transaction, while the remaining 70% are burned. The NEAR token is used for the following:

• Fees for processing transactions and storing data
• Running validator nodes on the network via staking NEAR tokens
• Governance votes to determine how network resources are allocated

Near uses human-readable account names, unlike the cryptographic wallet addresses common to Ethereum. Near uses a variation of the proof-of-stake consensus mechanism called Doomslug. Doomslug is based on two rounds of consensus, where a block is considered finalized as soon as it has received the first communication round. This allows for near-instant finality by having validators take turns producing blocks rather than competing directly based on their stake.

The Near Foundation is a Swiss-based non-profit dedicated to protocol maintenance, ecosystem funding, and guiding the protocol's governance.