What is NEAR Protocol (NEAR)? Your ultimate guide
With notable investors eager to back the project, and lots of interesting features, NEAR is making waves – but what is NEAR Protocol?
A Layer 1 blockchain, NEAR Protocol, has been attracting interest from investors since its official coin launch at the end of 2020. Designed as a community-run cloud platform, the protocol has a developed several technological solutions to solve the problems other blockchains tend to face, including slowness and poor interoperability.
Its designers claim it is a user-friendly platform featuring human-readable account names, and that NEAR’s goal is take crypto into the mainstream. As stated on its website, the project's mission is to create an ecosystem “secure enough to manage high-value assets like money or identity and performant enough to make them useful for everyday people”.
Before we do a deep dive into the crypto’s offering, let’s look at its origins.
Origins of NEAR Protocol
NEAR Protocol was founded by Illia Polosukhin and Alexander Skidanov in 2017 in San Francisco, California. Skidanov studied computer science at Ishevsk State Technical University in Udmurtia, central European Russia. He went on to work as a software developer at Microsoft before working for MemSQL for moreb than five years in the US.
Polosukhin studied applied math and computer science at Kharkiv Polytechnic Institute in Ukraine. He subsequently worked for Salford Systems as a software engineer before being recruited by Google as an engineering manager.
The protocol raised $21.6m in May 2020, providing sufficient capital to support the first stage of the MainNet rollout. Andreessen Horowitz, a well-known tech investor, led the funding round.
In October 2021, the NEAR Protocol cryptocurrency announced grants amounting to nearly $800m to support the development of the ecosystem further. The project, incubated by Y-Combinator, has received funding from big players in the blockchain scene including Coinbase Ventures and Pantera.
What exactly does Near Protocol (NEAR) do? Is the project unique? Let’s take a look…
How does NEAR Protocol work?
An important feature of the protocol is the speed with which transactions are verified and new blocks are added to the system.
Using a concept called Doomslug, blocks can be added to the ledger after only one round of validation. Compared to Ethereum, where users need to wait for around 35 validations before a block is fully confirmed and added to the blockchain, Doomslug, according to the company’s literature, speeds up the process dramatically, allowing many more transactions per second (tps) to be processed.
NEAR also uses a type of sharding called Nightshade. Sharding works by breaking the blockchain into smaller chunks. This means each shard is responsible for its own set of data. Nightshade allows NEAR Protocol cryptocurrency to process 100,000 transactions per second, significantly higher than both Bitcoin (five to seven tps) and Ethereum (15 tps).
Furthermore, each shard has 100 validator seeds, and when demand grows and the ecosystem needs to scale up, the project just adds another shard.
In a similar fashion to Ethereum’s Virtual Machine, the NEAR project has developed a Layer 2 blockchain called Aurora, which enables complete code interoperability. This means any code written for the Ethereum blockchain will work seamlessly on the Aurora chain. All developers need to do is copy and paste it into the Aurora programme.
Finally, unlike most blockchains, NEAR has focussed a lot on developing a user-friendly interface. Instead of having a wallet address, participants have a human readable name. This will no doubt make it more attractive and more accessible to non-tech people who want to get involved in crypto but are put off by how technical it looks.
What about NEAR coin, the native token of the protocol?
Let’s take a look…
What is NEAR Protocol coin used for?
NEAR is a utility token, allowing holders to get involved in the governance of the network as well as earn rewards by staking NEAR coins to the network. NEAR coins are secured via a delegated-proof-of-stake consensus model.
The protocol possesses an unusual governance structure. Instead of one decentralised autonomous organisation, or DAO, the governance of the network is divided into guilds. There are seven guilds in the NEAR Protocol (NEAR). Each guild represents a different department, including a marketing department and an engineering guild. Each guild works as its own self-contained DAO.
NEAR coin has a maximum supply of one billion coins and a circulating supply of 604 million coins. With each coin currently at $15.61, the NEAR protocol has a market cap of $9.4bn.
The NEAR Protocol cryptocurrency has performed phenomenally well over the past year. According to CoinGecko, the NEAR coin has gone up more than tenfold in value in the past year, and doubled in the past 30 days.
There is a maximum supply of one billion coins on the NEAR protocol and a current circulating supply of 604 million coins.
NEAR protocol is secured via a delegated-proof-of-stake model. Validators “stake” coins in order to secure the network and authorise transactions.