NEAR Protocol is a Layer 1 blockchain platform designed to be fast, cheap and simplify the creation and deployment of decentralized applications (dapps). It competes with Ethereum, Solana and other Layer 1 blockchains. The platform’s key technological feature is its approach to sharding, dubbed “Nightshade,” which its developers claim allows the network to process transactions quickly and cheaply.

Establishment and Development

NEAR protocol was founded by computer scientists Alexander Skidanov and Illia Polosukhin in San Francisco in 2018, during a period when Ethereum’s congestion and scalability issues became prominent. Skidanov previously worked as director of engineering at MemSQL, while Polushukhinin worked for Google. In July 2019, The team secured $12.1 million in Series A funding from several high-profile investors such as Pantera, Multicoin, ACapital, Coinbase Ventures and Ripple’s Xpring.

In early 2020, NEAR raised a further $21.6 million in a token sale led by Andreessen Horowitz. It also launched its mainnet in 2020, initially as a restricted mode, while it underwent testing and security checks. It converted to community governance in October 2020, allowing validators to operate the network without central restrictions. NEAR's bridge to Ethereum, dubbed the Rainbow Bridge, launched in March 2021.

In April 2021, NEAR introduced Phase 1 sharding, enhancing scalability by distributing the network’s load across multiple shards. Later in 2021, Aurora, an Ethereum Virtual Machine (EVM) built on NEAR, was launched to provide Ethereum compatibility, allowing developers to run Ethereum dapps on NEAR.

April 2023 marked the launch of the NEAR Horizon Web3 accelerator program, which was designed to support startups and projects within the NEAR ecosystem.

How does NEAR work?

NEAR uses a proof-of-stake consensus mechanism to ensure energy-efficient and secure transactions. The NEAR token is the protocol’s native cryptocurrency, used to participate in network governance, secure the network and pay transaction fees similar to ether and solana.

NEAR Protocol's sharding mechanism, Nightshade, enhances the blockchain’s scalability and performance. Sharding works by dividing the network into smaller, manageable segments called shards. Each shard processes a portion of the network's transactions and smart contracts in parallel, thereby distributing the computational load and improving the overall efficiency of the network.

Nightshade takes this concept further by implementing a unique approach to sharding where each shard produces a fraction of the next block called a "chunk." These chunks are then aggregated into a single block, ensuring the network maintains a unified state. This method allows NEAR to process significantly more transactions per second than traditional, non-sharded blockchains.

NEAR Protocol’s approach to be user and developer-friendly

NEAR Protocol aims to provide a user-friendly approach to blockchain for its users. One method is by implementing human-readable accounts, allowing interactions using names instead of complex wallet addresses. Its web-based wallet simplifies access by enabling direct account management through a web interface, avoiding the need to download additional software. NEAR's Access Keys system streamlines account permissions, letting users efficiently manage their interactions with dapps and smart contracts.

For developers, NEAR offers extensive documentation and examples to ease the onboarding process for creating dapps and smart contracts on its blockchain. To lower entry barriers and spur innovation, NEAR provides these resources and hosts regular office hours via NEAR DevRel, where developers can seek guidance and support throughout development.

Furthermore, NEAR incentivizes developers by allocating 30% of gas fees to them, encouraging active participation and rewarding their contributions to the ecosystem.

Source : The Block Crypto News - Jul 25, 2024