Similar to Ethereum, Near Protocol is smart contract-equipped blockchain technology. It was instituted in 2020 to provide developers with a platform to create more decentralized applications (dApps). The developers can launch serverless applications and smart contracts effortlessly and connect with open finance networks.
The goal of Near Protocol is to maximize scalability with much-enhanced processing speed through the process of ‘sharding’. Near protocol also uses a proof-of-stake consensus mechanism for the smooth process of the complete network. As of now, scalability and processing speed are considered to be the two major drawbacks of blockchain technology. Unlike other blockchain-based platforms which are built on the Ethereum Layer-1 solution, Near protocol is built from scratch. Also, it aims to become the easiest blockchain environment for developers and end-users, while simultaneously providing scalability and security to them.
NEAR helps web3 developers:
- Build decentralized application.
- Onboard users with rare experience. It can be used by non crypto savvy people also. You can be onboarded even if you have never used tokens, wallets, keys or any blockchain-based asset.
- Scale developed application consistently. The platform expands the capacity itself based on the traffic via sharding without any additional cost or effort.
Also, read – Beginners guide to ‘The Graph’ (GRT) protocol
How does Near Protocol works?
Near Protocol is based on a different architecture to nullify the issues by creating an utterly new blockchain from ground level. While it uses sharding technology, Near can break the chain of blockchain into smaller doable segments or shards. The process of sharding reduces the burden on the network by reducing computational load, providing better transactional speed.
When Nodes wants to become a transactional validator, they stake their NEAR tokens for consideration in participation. The token holders can choose any validator if they do not want to operate via nodes by deploying their stakes. Generally, the more stake the validator holds, the more influential it becomes in the consensus process. Meanwhile, an auction process is held to choose Validators at every 12-hour interval.
Moreover, Near protocol uses some unique solutions in its system to perform even better. Apart from sharding which is also known as ‘Nightshade’ in the protocol, NEAR uses Rainbow Bridge and Aurora solutions. Let us learn more about them
The process of sharding is a part of blockchain technology that allows each participant to break the blocks into small segments and store them in the platform’s data. It helps the blockchain to reach more scalable results efficiently while inducing lower transaction fees with a higher number of transactions.
The nodes handle the distributed blocks, which process the data and add the information to the main blockchain network.
One of the interesting benefits of Nightshade is that it allows much fewer potential threats to security. The participating nodes hold the responsibility for maintaining smaller sections of the chain.
NEAR protocol incorporates an application called ‘Rainbow Bridge’. It allows the participants to smoothen the transfer of Ethereum token ETH into NEAR tokens back and forth.
For instance: to move a token from ETH to NEAR protocol, a user has to deposit tokens in an Ethereum smart contract first. The platform locks the token and new NEAR tokens generated on the NEAR platform representing the original ETH ones. The users are free to reverse back to get original tokens through smart contracts.
Near protocol has built and uses a Layer-2 scaling solution called Aurora. The layer-2 solution is built on the Layer-1 blockchain technology of NEAR Protocol. Moreover, it helps developers to initiate their Ethereum decentralized applications to work on NEAR’s mainnet network.
Aurora uses Ethereum Technology, the EVM (Ethereum Virtual Machine), and cross-chain bridge enabling developers to link ETH smart contracts and assets mindfully. Furthermore, the developers use NEAR protocol to grasp higher productivity to gain low fees.
Projects Build on NEAR
Many projects have evolved on NEAR blockchain technology in the Web3.0 market. Also, projects like Mintbase and Paras use NEAR Protocol blockchain for untroubled programming. Mintbase focuses on untangling the issue related to the trading of NFTs on the platforms, whereas Paras is an NFT dedicated platform that only focuses on high-quality NFT curators.