NEAR: blockchain next door

What is NEAR protocol?

NEAR is a third-generation Delegated Proof-of-Stake blockchain network launched in 2020. The project’s ambition is to create a convenient, scalable environment, an ecosystem, where users and developers can enjoy fast, cheap and flexible interaction.

The source code is in the open source, and any enthusiast is welcome to contribute to it or build their own DApp. When asked, “what is NEAR and why is it so good?”, project evangelists claim it will only take you five minutes to start a new DApp.

NEAR implemented a range of innovations to increase speed and throughput, ensure better cross-chain compatibility and lower costs.

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History of NEAR protocol

The name NEAR comes from the “Singularity is NEAR” fiction novel title. Before it became a blockchain project, NEAR was a machine learning initiative started by llya Polosukhin and Alexander Skidanov as NEAR.ai as far back as in 2017. While researching program synthesis, the team explored smart contracts and the crypto domain. None of the existing solutions met their needs: higher capacity and easy DApp creation process. So, in 2018 the team started working on their own protocol aimed at resolving common issues of previous blockchains:

General chaos in development, as existing technologies are now a salad of different approaches, programming languages, consensus mechanisms with limited compatibility.
Long and unfriendly learning curve for end-users stymying adoption. Even a basic coin transfer is painful in some blockchains.
Limited tokenomics, scarcity of tools enabling validators and developers to raise funds and start with the blockchain.

Since the project started, the core developer team has grown to about 50 top professionals from Facebook, Google, Niantic, winners of competitive programming contests and Olympiads.

In April 2020 the network was launched and by September same year governance was transferred to the community. A month later, token transfers were enabled.

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NEAR Protocol features

What is NEAR Blockchain technology?

This blockchain protocol based on the Delegated Proof-of-Stake (DPoS) consensus introduced several innovative technologies and approaches to increase network efficiency and offer more options to users and developers.

DPoS is a twist to PoS developed in 2014 by Dan Larimer, EOS ex-CTO; apart from EOS, it is now used in several other blockchains, including TRON and Cardano. While validation in DPoS is still carried out by validators making stakes, they are re-elected for each block by the network participants based on their reputation. While DPoS is a more democratic version of consensus, voting power is still determined by the token holding.

NEAR uses sharding for scalability, but it is not new in itself. What makes NEAR unique are Nightshade and Doomslug technologies facilitating cross-shard transactions and block generation. Technical details can be mind-boggling, but the result is impressive. NEAR is unbelievably fast. Processing about 100,000 transactions per second it can finalize a transaction almost instantly, as block generation takes just 1 second. Citing the team, transaction costs can be 10,000 times lower than in Ethereum. And, speaking of Ethereum, Rainbow Bridge was one of the first features added to NEAR after the launch of the mainnet. Sounds thrilling, doesn’t it?

Walking the talk, NEAR is very user and developer friendly. Imagine having a human-readable wallet address instead of a public-key hash? NEAR has it. The official project repository offers a range of modular components to developers allowing them to quickly build and launch new DApps. NEAR allows implementing NFTs and even has a record of successful collaborations with artists and museums.

What is NEAR token?

NEAR is the native token of the NEAR blockchain and the backbone of its tokenomics. At genesis 1bn NEAR were created. 120m (12% of the initial emission) were sold at $0.3 during the ICO at CoinList in August 2020. The rest was distributed in the following way:

17% is allocated to community grants and programs
14% went to the team
17.6% were sold during investment rounds to attract $35m in investment
11.7% are earmarked to support ecosystem development initiatives
10% are allocated to NEAR Foundation for further delegation to validators

The token fuels the network consensus, security, fee and reward collection and distribution algorithms.

Interestingly, validator and other rewards in the network are based on the combination of inflation and burning.

Annually, the network creates 5% new tokens; 90% of those go to rewards, 10% are allocated to the protocol development.

At the same time, the network transaction fees (gas) are processed in a very sophisticated way:

30% of transaction fees go to contracts, called during the transaction to reward popular DApps and motivate developers. This reward is defined at the system level and can be changed via governance.
The rest is burnt. It means that the more transactions are processed, the lower the inflation is. It becomes 0% at 1bn transactions per year; beyond that number deflation starts (at 2bn transactions per year inflation is estimated at -2%).

Thanks to this logic, NEAR protocol becomes faster and cheaper, not vice versa.

How much does it cost to use NEAR?

In the previous section we already mentioned network fees (gas) to explain how they are used to govern the network operations, reward participants and to overall stimulate operations. Now let’s see what the implications are for end users.

Gas in NEAR is paid for two types of services to accounts and apps: storage and transactions.

Storage fee is taken for data accounts and DApps store in the network. Note that holding NEAR tokens entitled a user to store a certain amount of data in the network. For example, holding 1 NEAR allows storing 10Kb of data on the account. This mechanism is called “token-based storage”.
Transaction fee is taken for, basically, any change in the state of a smart contract that any transaction boils down to. The price depends on transaction complexity, network load, etc.

Usually, transaction prices rise ahead of increasing network load, as people are ready to pay more to get their transaction processed faster. Yet, if fees become too high and the speed drops too much, NEAR applies its sharding algorithm. As mentioned above, NEAR fees are a fraction of those in Ethereum: current Near transaction fee is below $0.1.

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Future of NEAR protocol

Why does NEAR protocol go up?

Now the project is at the so-called Post Mainnet stage. The network operates normally, while more components and features are being added to it as planned through the established governance mechanism.

NEAR has already launched a bridge with Ethereum, Rainbow Bridge to enable cross-chain transactions. It is expected to implement private transactions using a technology similar to Zcash, private shards and mobile nodes to allow managing blockchain from mobile devices that are soon expected to meet blockchain performance requirements.

NEAR enables layer 2 ecosystems that take the market another step closer to the Internet of blockchains. Thus, NEAR’s Aurora project basically implements Ethereum virtual machine on NEAR, allowing EVM developers to operate their DApps on NEAR and use all its benefits. The project raised $12m in investments in October 2021.

Also, NEAR Protocol rais around $50m across various token sales, including some coming from A16Z, a leading crypto fund owned by Andreesen Horowitz.

If you visit the protocol’s homepage, you will find even more announcements proving its outstanding performance with regard to attracting investors.

Seems promising, doesn’t it? At least, major investors think so and keep supporting all things NEAR. Traders follow and blockchain enthusiasts, showing interest in NEAR coin.

Apart from the obvious technological potential, NEAR is an attractive asset because it is yet at the beginning of its way, and the price hasn’t yet gone to the moon. Beginners, individual investors can buy NEAR now and probably see their $10 turn into $10,000 as it was with BTC. Who knows? We are not giving any advice, though. Do your own research and make your own decisions.

How to get NEAR tokens?

NEAR trades on many popular cryptocurrency exchanges; likewise, it is available on many conversion services where you can buy cryptocurrency for fiat and pay with a bank card or checkout using other payment methods.

Exchanges are good, if you are planning a serious crypto journey. They offer a lot of features, some even have courses in trading. But registration is long and complicated and advanced features can be confusing to newbies.

While holders (online wallets) offered by exchanges fail to offer adequate protection, inexperienced users often carelessly store all their balances there, as opposed to using those holders as interim storages of small amounts.

So, if you need an easy and fast tool to get NEAR, we suggest UTORG. Not very modest, but judge for yourself:

No registration before buying
Zero service fee, no hidden charges
Instant deal processing
Due service licensing, compliance with the law
Solid information security (level 2 PCI DSS certificate)
Fast and easy identity verification procedure
Wide choice of fiat currencies to pay with
Smooth checkout with any Visa/MasterCard card
Alternative payment methods for some geographies
24/7 live support and transparent processing

Before buying NEAR, create a native wallet at https://wallet.near.org/, it will only take a couple of minutes.