In the evolution of decentralized technologies, Bitcoin (BTC) emerged as a pioneering project, primarily designed for storing and transferring its digital currency. Ethereum (ETH) followed suit, refining and amplifying the foundations laid by Bitcoin to create a more versatile computing and distributed storage platform.
Enter NEAR — a project attempting to make a substantial leap beyond its predecessors. Positioned as the inaugural decentralized application (DApp) platform, NEAR aims to address the blockchain trilemma hindering mainstream adoption: usability, scalability, and security.
In this guide, we’ll walk you through NEAR’s functionalities, tech stack, native NEAR token, notable projects, and more.
What is NEAR?
NEAR is a user-friendly and carbon-neutral community-operated cloud infrastructure for hosting DApps. Its primary objective is to redefine system design and app development, potentially reshaping the very fabric of the web.
In pursuit of this mission, NEAR empowers developers and entrepreneurs to effortlessly build and deploy DApps on the blockchain, prioritizing both performance and user experience for end users. Notably, pioneering features like human-readable account names as opposed to cryptographic wallet addresses and user-friendly interactions with DApps and smart contracts without the need for a crypto wallet, mark NEAR’s commitment to accessibility.
NEAR’s community-run cloud disrupts conventional centralized cloud infrastructures dominated by giants like Amazon Web Services (AWS) and Microsoft's Azure. This global cloud eliminates single points of failure and enhances transparency and security, allowing users to transparently store assets and securely transact without depending on a single entity's permission or platform.
Built atop the NEAR Protocol blockchain, NEAR functions as a layer-1 blockchain that employs the proof-of-stake (PoS) consensus mechanism and sharding to enhance scalability. This innovative approach allows NEAR to achieve near-instant transaction finality and process transactions at approximately 100,000 transactions per second (TPS), presenting a distinctive solution to scalability challenges.
Central to NEAR's ecosystem is the NEAR token, facilitating transactions, ensuring fair compensation, and upholding democratic governance. The challenges of managing a community-run cloud, including inclusivity, fair compensation, and security, are also addressed through a token-based system, promoting a free-market approach, permissionless participation, and anonymity.
What is the Blockchain Operating System (BOS)?
In early 2023, NEAR unveiled the Blockchain Operating System (BOS). Built on the NEAR Protocol, the BOS is a novel, user-focused, and open-source layer designed for exploring and discovering open web experiences across various blockchains. Positioned as a real alternative to centralized operating systems, the BOS is now accessible at near.org, welcoming a diverse audience, including those new to Web3 experiences.
One key highlight is the BOS's approach to user onboarding. Through FastAuth, the BOS provides a seamless, Web2-style onboarding experience, allowing users to create accounts for BOS apps quickly and effortlessly, without the need for complex cryptographic processes.
Going beyond Web3 natives, the BOS is a haven for developers interested in open-source and decentralized development. With the introduction of Javascript and Rust, the BOS opened up opportunities to developers who were previously excluded from Web3.
Simultaneously, the BOS offers a suite of modular developer tools, empowering developers of all levels and fostering accessibility in Web3 app development.
How does NEAR Protocol work?
Like Ethereum, EOS (EOS), and TRON (TRX), NEAR can be described as a "base-layer" blockchain, serving as the foundation on which various applications are built and deployed. Here’s an overview of NEAR's key features:
Nightshade: Sharding for scalability
NEAR uses a sharding mechanism known as Nightshade to achieve horizontal scaling, allowing the network to process transactions at scale. Sharding involves partitioning the network into smaller, interconnected shards, each capable of processing transactions independently and in parallel.
Nightshade leverages the collective processing power of nodes within each shard, enabling NEAR to handle a higher transaction throughput. As more nodes join the network, the capacity for processing transactions increases. The result is reduced confirmation times, lower transaction fees, and improved efficiency, making it a compelling scalability solution for DApps built on NEAR.
Rainbow Bridge: Bridging different blockchains
Rainbow Bridge facilitates interoperability between different blockchains, creating seamless connections between NEAR and other blockchain networks. This two-way bridge is essential for supporting cross-chain applications and enabling users to transfer digital assets, including ERC-20 tokens, stablecoins, wrapped tokens, and even non-fungible tokens (NFTs), between NEAR and compatible blockchain ecosystems. By unlocking interoperability, Rainbow Bridge creates avenues for collaboration and synergy among diverse blockchain communities.
Aurora: Empowering developers with EVM compatibility
Aurora is a layer-2 solution that ensures compatibility between NEAR and the Ethereum ecosystem. Recognizing the widespread use of Ethereum smart contracts, Aurora provides an Ethereum Virtual Machine (EVM)-compatible platform with minimal transaction costs, allowing these smart contracts to operate seamlessly on the NEAR blockchain.
Comprising the Aurora Engine and the Aurora Bridge, this solution is designed to enhance the development experience. The Aurora Engine operates as an EVM on NEAR, ensuring compatibility with Ethereum and support for the spectrum of tools available in the Ethereum ecosystem. This integration allows developers to port their applications to NEAR without the need to rewrite their DApps or adapt to new development tools.Furthermore, developers can leverage the Aurora Bridge, which uses the same technology as the Rainbow Bridge, to effortlessly bridge their smart contracts and ERC-20 tokens between the Ethereum and NEAR blockchains. Notably, users have the flexibility to pay transaction fees with ETH on the Aurora platform, further enhancing the interoperability and convenience of this layer-2 solution.
Who created NEAR?
Alexander Skidanov and Illia Polosukhin, the co-founders of NEAR, have been instrumental in shaping both the platform and its ecosystem since its inception in 2017. United by a shared vision of decentralization, this dynamic duo is propelling NEAR forward, demonstrating their collective commitment to pushing the boundaries of blockchain technology.
Skidanov started his journey in 2009 at Microsoft and later joined MemSQL (now SingleStore) in 2011 as the first engineer, playing a significant role in developing core features. Polosukhin, with over 10 years of industry experience, including a crucial stint at Google, adds substantial expertise to the collaboration.In 2019, the NEAR Foundation, a non-profit entity dedicated to fostering the growth of NEAR's ecosystem and protocol development, was established. The NEAR mainnet was launched in April 2020 and transitioned to being completely community-operated in September 2020.
Native utility token: NEAR
Native cryptocurrency, NEAR, is a utility token that plays a crucial role in the NEAR ecosystem, ranging from transaction processing and validation to governance and ecosystem incentives.
Use cases
Transaction processing: NEAR tokens are used to facilitate transactions on NEAR. Whether it be engaging with DApps, transferring assets, or interacting with smart contracts, NEAR tokens act as the fuel that powers these operations.
Validation and security: NEAR employs a PoS consensus mechanism, where validators secure the network by staking a certain amount of NEAR tokens. These validators are responsible for confirming transactions and maintaining the integrity of the blockchain.
Governance: NEAR token holders can participate in the governance of the network. Decisions related to protocol upgrades, parameter adjustments, and overall network policies are subject to the input of token holders. This democratic approach ensures community involvement in the evolution of the NEAR ecosystem.
Ecosystem incentives: The NEAR token is also instrumental in incentivizing participants within the ecosystem. Developers, validators, and other contributors are rewarded with NEAR tokens for their efforts in building, securing, and enhancing the platform.
Access to services: NEAR tokens grant users access to various services and functionalities within the NEAR ecosystem. This includes utilizing DApps, accessing storage, and engaging in other services available on the platform.
Token distribution
A total of 1 billion NEAR tokens were created during NEAR’s genesis event on April 22, 2020, with distribution across various categories. Community grants and programs received 17.2%, operations grants account for 11.4%, and a 10% endowment is established for the NEAR Foundation. Additionally, 11.7% went to the early ecosystem, 14% went to core contributors, 23.7% to backers, and 12% was allocated to community sales. The majority of the initial NEAR token supply is subject to long-term lockups, with all restrictions lifted by the fifth year.
Notable projects built on NEAR
NEAR has served as a robust foundation for various innovative projects. Ranging from decentralized finance (DeFi) and NFTs to development tools, the platform's commitment to scalability, developer-friendly features, and community support has fostered an environment conducive to groundbreaking projects across various industries.
Here are some notable projects that have been successfully built on NEAR:
Mintbase: Mintbase leverages NEAR to provide a user-friendly platform for creating and managing NFTs without worrying about technical complexities. Artists and creators can seamlessly create and sell their digital creations, ranging from digital art to virtual real estate, all while benefiting from considerably lower gas fees in comparison to platforms like Ethereum.
Flux: Flux is an open market protocol allowing fast, inexpensive, and decentralized trading. It addresses Ethereum's challenges, offering lower fees and quicker resolution times. Utilizing NEAR's sharding and PoS consensus mechanism, Flux ensures security and scalability. Rust-based and user-friendly, it supports diverse market creation and leverages the ETH <> NEAR Rainbow Bridge for cross-chain functionality.
Paras: Paras is a curated NFT marketplace, deviating from the cluttered and unorganized nature of other platforms. Utilizing NEAR's fast and cost-effective transactions, Paras provides a seamless experience for artists and collectors. The platform's collection-based releases enable artists to tell compelling stories through thematic cohesion. With NEAR's support, Paras addresses challenges in the NFT space, making it accessible to a broader audience.
Kurtosis: Developed by former Palantir engineers, Kurtosis provides NEAR developers with vital tools for local development and testing of blockchain applications. With a suite of services, including a sandbox node, indexer, wallet, explorer, and smart contract helper, Kurtosis streamlines the development cycle. Addressing the complexity of networked systems, Kurtosis enables developers to simulate unforeseen events, ensuring robust software development. Its user-friendly and scalable approach aligns with NEAR's commitment to accelerating innovation in blockchain development.
Looking to the future
NEAR plans major strides, aiming to simplify blockchain complexities for users and developers through advanced chain abstraction. With innovations like sharding, the BOS, and FastAuth, NEAR creates a unified user experience while preserving the flexibility of individual logical chains.
Additionally, NEAR is at the forefront of artificial intelligence (AI) integration, introducing AI-driven governance and elevating Web3 experiences. As NEAR continues its commitment to simplifying user experiences and advancing the open web vision, the future of NEAR holds promise.
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