Near is a highly extendible protocol, which enables decentralized applications to run fast. It aims to organize a network of computers to operate a platform for Dapp developers. For the performance, it targets to provide 100k TPS based on 1 million nodes in long term. Theoretically, the shading number has no up limits.
As we all know, Ethereum is suffering from over-crowded, high gas price, and long confirmation time issues. It can only process less than 20 transactions per second on the main chain. Several solutions have been brought up, e.g. Layer 2 scaling technologies like channels, Plasma, and Rollups (including ZK rollups and Optimistic rollups). But they are not a solution for all the issues and have their limitation. Finally, Ethereum 2.0 introduces Proof of Stake and sharding that will dramatically increase the transaction throughput on the base layer. So Sharding can be considered as an ultimate solution for blockchain scaling, as it allows the workload to be shared among all the participating nodes, and make blockchain much less vulnerable to short-term traffic spike, as well as more scalable.
Near is a Proof of Stake (POS) blockchain built on Sharding, which is what the solution Ethereum 2.0 is chasing. We may say it is an advanced and one-stop solution in the market right now for network scaling, and that is why Near is so-called “the killer of Ethereum”. It implements sharding technology named Nightshade that split the network’s infrastructure into several segments so that nodes only have to handle a fraction of the network’s transactions, instead of asking the whole network participants to process data. NightShade combined all shards to produce a single block so that each block contains transactions from all shards and each block changes the entire state of all shards. No block can download the full state of the blockchain, as they only maintain the state of shards connected to them.
Schedule for NEAR’s development
The NEAR team will implement Night Shade in 4 phases.
In Phase 0, Simple Night Shade was deployed on 15th Nov 2021. It uses a mechanism to split a shard into several parts, which will serve as the base for future dynamic resharding. In this phase, because every shard is still validated by all validators, safety is still guaranteed. This mechanism allows the network to scale linearly with the increase of shards.
In Phase 1, a new concept called chunk-only producers was introduced. These producers only validate one shard, and only need to run on inexpensive hardware, while not sacrificing the safety of the network. According to the schedule, Phase 1 will be implemented in late 2022. Once finished, the network will have 200-400 validators and only block producers need to run more expensive hardware
In Phase 2, the network’s state and process will be fully sharded. And the cost of hardware will be further lowed down.
In Phase 3, the team will target to let the network dynamically split and merge shards based on resource utilization, so that NEAR will be almost infinitely scalable and able to overcome short-term usage spikes. This phase is expected to be delivered in 2023.
From the whitepaper, NEAR’s main character includes:
NEAR's proof of stake network is sustainable and certified carbon-neutral.
Almost infinitely scalable and resilient to short-term usage spikes through sharding.
Human-readable account names (alice.near instead of 0x71C7656EC7ab88b098defB751B7401B5f6d8976F)
Fast. around 1.2 second block production time.
1000x lower transaction fees for users.
30% of gas fees are paid out to smart contract developers.
Interoperable with Ethereum using Rainbow Bridge (first trustless bridge ever created).
EVM compatible with Project Aurora (Deploy your Solidity contracts with ease).
Free educational courses with live teachers at NEAR University.
Project funding available through our Grants Program.
Market cap and investors’ attention
On 6th April 2022, Near raised USD 350 million, more than double what it got 3 months ago. The investment is led by Tiger Global. The market cap as of 20th April reached USD 11.56 billion, according to Coinmarketcap.com. The price almost increased 3 times as of last year, which shows investors’ mania on the cryptocurrency.
NEAR Tokenomics NEAR protocol started its main network on 22nd April 2020 and created 1 billion NEAR tokens at times of genesis. Inflation is 5% per annum, in which 90% (4.5% in total) is allocated to validator and 10% (0.5% in total) is allocated to reserves. 30% of the transaction fee is paid out to smart contract developers, and the remaining 70% will be burned. NEAR is a native currency of the NEAR blockchain. It can be used in the three ways:
paying the cost of processing transactions and data storage
pledging the NEAR token to run the network validation node
used to vote on network governance to determine how network resources are allocated and the future technical direction of the protocol
Development on NEAR NEAR provides developers a complete SDK toolkit that includes a standard data structure, examples, and test tools for Rust and AssemblyScript NEAR Gitpad is also available for developers. NEAR wallet is designed to work seamlessly with a progressive security model that enables application developers to design more efficient user experiences.
Rainbow bridge To attract more capital inflow from Ethereum, Near developed an application named Rainbow Bridge, so that investors can move their Ethereum tokens back and forth between Ethereum and NEAR.
Aurora
Aurora is a Layer 2 scaling solution for users to launch their Ethereum dApps on NEAR’s blockchain. It is built using the Ethereum Virtual Machine (EVM) so that developers can seamlessly link their Ethereum smart contracts and assets.
Currently, Aurora ranked 14th among all the chains, with a TVL of USD 1.12 billion. There are 29 dApps so far implemented in Aurora, and major dApps include Bastion(a borrow and lending platform), Trisolaris(a mining platform), and Aurigami ( a lending protocol). Users can use the Rainbow Bridge to cross their assets to these protocols and invest in them. Trisolaris crypto TRI increased 1.65 times in the past month, which means investors are positive about the currency’s long-term development, as well as the whole ecosystem.
NEAR Protocol
With TVL of USD 488.19 million, NEAR protocol ranked 23rd among all chains. Because it is not EVM compatible, it only has 5 dApps so far. The top dApp Ref attracts USD 202.81 million and its cryptocurrency REF increased 2 times in the past month.
Weakness
So far, the ecosystem of NEAR is still developing and the number of dApp is still small compared with other competitors according to defillama.com. Solana has USD 6.84 billion TVL and almost 59 dApps. Avalanche has USD 15.47 billion TVL and more than 190 dApps. So to become a developed network, NEAR has a long way to go.
We have seen efforts made by NEAR to shorten the gap. Firstly, NEAR provides SDK and tools like Gitpod to help developers to develop new dApps; Secondly, NEAR announced the NEAR Foundation Grants Program to developers. So far it has awarded USD 8 million to more than 400 projects. We believe soon, dApps on NEAR will increase quickly.
Conclusion
NEAR is the next generation of blockchain, as it is built on Sharding and POS consensus. With sophisticated investors like Tiger Global’s endorsement, we have monitored capital inflow from Ethereum to this promising network. The number of dApps is still behind Ethereum’s and other competitors’, but NEAR has provided investors with essential functions like lending and borrowing, and farming. Although NEAR’s TVL and dApp number is relatively small right now, given time and careful incubation, we believe the situation will improve in the NEAR future.