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NEAR Protocol
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About NEAR Protocol
NEAR Protocol is a layer one blockchain that aims to provide a community-oriented platform that supports both developers and end users. Launched in 2020, NEAR sets out to offer increased transaction speeds, lower costs, and greater ease of use compared to other blockchains.
History and Background
NEAR Protocol was founded by Illia Polosukhin and Alexander Skidanov. Polosukhin previously worked at Google as an engineering director, while Skidanov was the director of engineering at MemSQL. They assembled a global team to build NEAR based on their shared vision for a user-friendly and scalable blockchain infrastructure.
The NEAR mainnet was launched on April 22, 2020 after raising over $30 million from venture investors. It was initially created as a proof-of-stake blockchain, but transitioned in October 2021 to become a carbon-neutral proof-of-stake chain through its certification from ClimateTrade. This commitment to sustainability aligns with NEAR’s mission to create an environmentally friendly and community-centric blockchain platform.
Features and Capabilities
NEAR uses human-readable account IDs instead of complex hexadecimal addresses used on platforms like Ethereum. This simplifies the user onboarding process. NEAR also has the ability to easily deploy and iterate applications thanks to its container-based architecture.
In terms of speed and scalability, NEAR can process up to 100,000 transactions per second. This far outpaces networks like Bitcoin and Ethereum in throughput. NEAR’s Nightshade sharding allows linear scalability as the platform grows by partitioning the network into subsections called shards.
NEAR also offers low fees for transactions and storage. Gas fees are far lower than competitors since costs only relate to storage rather than computational complexity. And storage rent fees only apply after an account is unused for a prolonged period rather than constantly.
Consensus Mechanism
NEAR uses a unique consensus mechanism called Doomslug. This Proof-of-Stake-based algorithm allows validators to reach consensus by betting on the block they believe is most likely to be correct. If validators act dishonestly, their staked NEAR tokens can be taken away.
Doomslug is designed for speed, security, and efficiency. It reduces time between blocks to just one second. Having fewer validators also increases throughput. Only 100 validators are active per shard, significantly smaller than networks like Solana. Doomslug also implements Nightshade sharding to enhance scalability.
Governance Structure
Decision-making and governance of the NEAR platform resembles a representative democracy. NEAR token holders can elect council members to represent them. These council members then vote on proposals, which could involve changes to economic parameters or the treasury’s usage of pooled assets. For urgent issues, the NEAR Foundation’s board can vote on interim decisions until the council formally decides.
This governance structure empowers NEAR users to have a voice. It also provides balanced representation between various stakeholders like developers, token holders, validators, partners, and other community participants.
Applications and Use Cases
NEAR has a blossoming ecosystem of decentralized applications being built by various development teams and partners. These span areas like decentralized finance (DeFi), non-fungible tokens (NFTs), gaming, identity solutions, cloud storage, advertising, prediction markets, and more.
For example, Ref Finance lets users leverage their NEAR tokens to trade without liquidation risk. Paras allows creators to launch their own decentralized autonomous community. Mintbase facilities issuing and trading NFTs. There are also popular games like Metapool and Dark Forest on the rise. And NEAR enables seamless transfers between chains through bridges like Aurora and Octopus Network.
Tokenomics
The NEAR token powers all aspects of the NEAR platform. It is used to pay for transaction processing fees, storage fees, and for staking as part of the proof-of-stake consensus mechanism.
In the initial token distribution event, half of the 1 billion total supply was distributed, while the other half goes to the NEAR Foundation to help fund ecosystem growth. Of the tokens already distributed, 40% went towards community and advisor rewards. Another 40% was sold publicly and 20% went to Seed/Series A investors.
The NEAR team also created an incremental lockup schedule where only 5% of an investor’s tokens would unlock each month over the course of 18 months to incentivize long-term holdings.
Conclusion
NEAR Protocol presents a unique scalable community-driven blockchain that places strong emphasis on usability and practical applications. With its robust technical architecture, sustainable consensus mechanism, representative governance model, thriving ecosystem of dApps, and focus on mainstream user adoption, NEAR positions itself strongly amongst the expanding realm of layer one platforms in the blockchain space. The continued momentum from its impressive growth since launching mainnet and supportive community bodes well for NEAR’s future decentralization roadmap and vision.
