A shallow dive into NEAR Protocol

Gabriel V. Gabriel V.
23 Apr 2022
4 min read
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A shallow dive into NEAR Protocol


In anticipation of the USN algorithmic stable coin NEAR Protocol is one of the most hyped blockchain platforms in play at the moment.


Near is a proof-of-stake layer 1 blockchain platform in development since late 2018, with its full mainnet launch in October 2020. With promises to be faster, cheaper, and more secure than Ethereum, in this article we are going to take a sneak peek into the protocol features and what is sustaining their claims.



What makes NEAR different


Near Protocol has a lot of interesting key elements, from its tech to its star team, let's take an overview of all those elements.


AAA+ Team


The Near team is AAA+ and maybe collectively, one of the most experienced blockchain platform teams at play. They have like 100 devs from Google, Meta and Microsoft, with multiple international programming competition champions. The core founders are considered the smartest in the space:

Illia Polosukhin (ex-Google) and Alexander Skidanov (ex-Microsoft and MemSQL).


Funding and VC backing


The team has managed to get backing from more than 40 investment firms and Venture Capitals, including Andreessen's Horowitz(a16z), Metastable, Accomplices, Coinbase, Pantera Capital, and Ripple’s developer ecosystem project Xpring.


That brought a massive war chest to promote Near development and growth, attracting more and more talented developers and almost a billion dollars in a development ecosystem fund.


Sharding


Near scales through sharding. It is designed to scale horizontally by distributing computation across multiple parallelized shards. If this kind of looks familiar to you, that's because Ethereum plans to implement this tech in 2023. Near already has it. The Near sharding is dynamic, meaning they can adjust the size of the shards based on demand, which will keep fees low. This makes their scaling potential without limits.


Consensus


Consensus is achieved across all of the nodes which make up the network operators across all of the shards using the new Nightshade algorithm.


Staking selection and Game theory


To participate in the validation process, stakers are selected using a secure randomized process that optimally distributes seats across parties and provides incentives for them to operate with good behaviour.


Randomness


Near's randomness approach is unbiased, unpredictable and can tolerate up to one-third of malicious actors before liveness is affected and two-thirds of malicious actors before anyone can actually influence its output.


Education


With all this development ecosystem fund, the protocol aims to attract more developers to its platform, which creates awesome dApps and increases network usage. One of the educational initiatives in the ecosystem is NEAR University, which aims to onboard web2 developers to the web3 standard. Also, they are not targeting only experienced developers, as there are some "learning from scratch" courses in their educational content and massive educational resources to onboard programming enthusiasts.


EVM


The Near Protocol EVM compatible chain, Aurora, is already standing at a $1.18 billion TVL, according to DefiLlama. Aurora is also the fastest EVM in play right now, faster than the Avalanche C-Chain, delivering 1000x lower transaction fees compared to Ethereum and sub-two second finality.


User Friendliness


They emphasize making this experience easier for normal people onboarding. Providing an easy-to-use wallet that can be name-based(like name.near) and also allows email and phone backup. The experience is an improvement, but not too revolutionary.


They launched the NearPay in march last year as the first bridge to fiat debit cards in the Near ecosystem.


Near Stable Coin


Set to launch in May this year, the USN, Near's algorithmic stable coin is hyping the community. The release of USN will attract liquidity to the Near ecosystem, give another use-case to the Near token and help the protocol to be less dependent on other stable coins.


When live, to mint $USN you will have to lock $NEAR, making it different from the mint-and-burn mechanism used by Terra's UST. The Near mechanism does not burn the token, but it reduces selling pressure. The more $USN is in circulation, the more $NEAR will be locked as collateral.


While $USN is being minted, the $NEAR supply is being reduced and the collateral for the minting is used to generate the yield, therefore, it is not dependent on borrowing demand creating a positive loop. As more $USN gets minted, more $NEAR has to be locked as collateral, reducing supply, increasing the price and generating more yield.


Conclusion


As we can see, a lot is going on in the Near Protocol, making it easy to understand all the hype around it these days. The protocol has deep pockets, a sharp team, great backing and every resource at its disposal. 


There is a lot of great news and achievements from them which were not mentioned in this article, as this is just an overview. As always, we encourage everyone to do their own research, as many other great things are happening at Near Protocol that might surprise you. With all the backing and big investors behind Near, it is clear at this point that they are here for the long run.




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Gabriel V.
Gabriel V.
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About the Author

Crypto researcher, investor and trader. Technical and data analyst.

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