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All about NEAR Protocol

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We are now in the era of web 3, which represents the next iteration of the internet popularly known as the decentralized web. It is the latest generation of internet applications and services powered by distributed ledger technology. One of the key features of Web 3.0 is the empowerment of decentralized finance (DeFi). Startups and Enterprises are eager to adopt DeFi because of its growing popularity and various benefits.

DeFi further provides the corporates with access to the global digital market. However, the DeFi platforms hold some limitations, such as high cost, lower transaction speed, and are considered to be less environmentally friendly. To tackle these limitations, a new protocol named NEAR landed on the blockchain space. With its unique sharding feature, NEAR Protocol offers blockchain scaling solutions for startups and enterprises. It has the ability to ensure lower transaction costs and high transaction speed and is also environment friendly.

NEAR Protocol is innovative for it focuses on addressing the limitations of the older system through a community administrated sharded blockchain platform. Artificial Intelligence researcher Illia Polosukhin founded it along with Alex Skidanov. The network runs on Nightshade, a (PoS) Proof-of-stake consensus mechanism that focuses on offering stable fees and scalability.

What is NEAR protocol?

NEAR is a decentralized application platform designed to offer a high-performing and secure infrastructure to support the development of scalable dApps. The network can handle up to 100,000 transactions per second besides offering instant block creation in 1 second. It further eliminates the downwards of the systems in competition, including low throughout and issues related to cross-compatibility.

NEAR Protocol aims to incentivize a blockchain network to build and launch dApps on the DeFi platform and yield profit through approaches such as staking and sharding. The nucleus of the NEAR Protocol’s design is the concept of sharding.

Sharding is splitting the network’s infrastructure into several segments known as nodes to handle a fraction of the network’s transactions. The distribution of blockchain nodes instead of distributing the complete blockchain across network participants. It helps pave the path for a more efficient way to retrieve data and scale the decentralized platform.

The NEAR protocol blockchain is secure and permissionless. The network’s technology consists of a new block generation scheme called ‘Doomslug.’ NEAR Protocol can be utilized to pay fees for storing data and processing transactions and is also used to run validator nodes on the network by staking currency tokens.

How does NEAR protocol work?

NEAR Protocol is a Proof of Stake (PoS) that helps startups and enterprises with sharding solutions for their scaling.

Let’s have a look at the sharding solutions that NEAR Protocol provides and how NEAR Protocols work:

Nightshade:

Sharding is a blockchain structure that allows each participating node to store a small subset of the platform’s data. It allows a blockchain to scale more fluently and enables higher transactions throughput per second while reducing the transaction cost. Nightshade allows NEAR to maintain a singular chain of data. The nodes handle the computing required to maintain these data into ‘chunks.’ The nodes process the data and additional information to the main blockchain network. One of the benefits of Nightshade is that its architecture provides fewer chances of failures when it comes to security, as the participating nodes are only responsible for maintaining smaller segments of the blockchain.

Rainbow Bridge:

NEAR Protocol has an application called the Rainbow bridge that allows the network participants to transfer Ethereum tokens back and forth between Ethereum and NEAR. To move tokens from Ethereum to NEAR, a participant must deposit Ethereum tokens in the Ethereum smart contract. These tokens are then locked on the Ethereum ecosystem, and new tokens are minted on NEAR’s platform, representing the original Ethereum tokens. Since the original funds are stored through the smart contract, we can reverse this procedure if users wish to retrieve their original tokens.

Aurora:

Aurora is a layer 2 scaling solution built on a NEAR protocol for developers to help them launch their Ethereum decentralized applications on NEAR’s ecosystem. Aurora is built using the idea of the Ethereum Virtual Machine (EVM) that enables developers to link their Ethereum Smart contracts and assets seamlessly.

What is stake farming?

To stake NEAR tokens, users must get their NEAR Protocol wallet account. Setting up a NEAR wallet is not a tedious task. It requires the completion of a few initial steps of setting up an account and confirmation of personal details. Note that the NEAR wallet can be funded with a minimum of three NEAR tokens. These three tokens cover the cost of creating the NEAR wallet and the new account ID.

Hence, there is no minimum amount needed to stake on the blockchain network (excluding the three NEAR tokens required to create the NEAR wallet). However, there are two primary ways of NEAR Protocol staking with different roles and rewards depending on the responsibility assumed within the network. The two primary ways of NEAR Protocol Staking are as follows :

Validator Staking

The Proof–of Stake (PoS) requires the validators to stake a minimum threshold of a certain amount of tokens. This amount is dynamic and can fluctuate with the number of NEAR tokens staked by other validators. These tokens have often been used as collateral to prevent unethical activities on the network, and any bad actors on the network will get their collateral stake dropped.

The validators are responsible for validating blocks in the network and receiving transaction fees and rewards every epoch (Approximately 12 hours). An Epoch is an era of time within the blockchain network, and Validators can choose not to stake their collateral any time they wish to. In that scenario, the funds will remain locked for three Epochs before it is released.

Delegator Staking

Users who want to earn staking rewards without taking the accountability of running a validator node on the blockchain network can delegate their stake to an individual validator node or validator pool to earn a specific percentage of the fees earned by the individual validator node.

The delegators aren’t penalized or fined by the NEAR Protocol. Hence, If a delegator’s chosen validator turns out to be a bad actor, delegators will only lose the rewards from that respective validator. So a delegator doesn’t need to fear its stake being slashed by the NEAR Protocol.

What are the prominent use cases of NEAR protocol?

As NEAR Protocol provides infrastructure for Web 3, it distinguishes itself from the other third-generation blockchains through its developer-friendly features. NEAR Protocol empowers millions around the globe to invent and explore new businesses and communities for a sustainable and more inclusive future. So let’s take a look at some of the prominent use cases of NEAR Protocol :

1. Decentralized Finance:

DeFi or Decentralized Finance is critical for building an open web. Its rise in recent times results from success on Ethereum, super-changing experimentation with blockchain-based financial institutions. Actions that used to take weeks in traditional finance systems can now be done within seconds because of the primitives of the DeFi. The same gush of experimentation and interest that has provided numerous opportunities for DeFi users has made it harder for new potential earners to gain entry into the DeFi platform. Network congestion, the skyrocketing price of gas, and the evergrowing prices of the tokens make the entry of new builders and creators difficult with the barriers. But now, NEAR is making DeFi more accessible for everyone, especially those just starting to explore the crypto space. With the launch of Rainbow Bridge, DeFi is now live on NEAR Protocol and is unlocked for creators and users worldwide. All the assets that originate in Ethereum are now fully functional and usable on NEAR Protocol-based dApps.

2. Non Fungible Tokens:

NFT can be considered digital containers that can hold Internet Protocol, but when it is liberated to be owned and traded, creators worldwide can have new ways to produce, distribute, and monetize content. The most important concept of NFTs is that after years of sharing creative output in the web world, there is digital scarcity resulting in that now it can prove in the digital space that a single person uniquely owns a file or piece of data. NFT is a unique digital certificate registered on a Blockchain (Digital Ledger). It records the immutable ownership of any asset, whether digital or physical. The NFTs allow ownership over Digital Assets. The NEAR Protocol is a better platform for NFTs as it is significantly faster than generation 2 blockchains.

3. Decentralized Autonomous Organization:

A DAO is a decentralized autonomous organization owned and managed by a formalized community instead of a CEO or the board of directors. Every member in the DAO can participate in the platform’s governance and take important decisions through voting to build sustainable models for the respective organization. Near protocol leverage DAO to end the bureaucracy in their organization and provide the token holders with more advanced accounts that can help them store tokens, NFTs, and other assets on the platform.

Modular blockchain solutions for new-age enterprise software

Build a dApp on NEAR protocol with LeewayHertz.

Why choose NEAR protocol for the next development project?

NEAR has a progressive User Experience (UX) for the users of the dApps on the DeFi platform. Also, NEAR is environmentally friendly, making it best suitable for an upcoming explosive growth in the Digital Market ecosystem. Sharding helps create a more efficient way to retrieve network data on the blockchain network and scale the dApps on the DeFi platform.

The NEAR Protocol uses a Proof of stake election mechanism called Threshold Proof-of-Stake(TPoS). So in, this system creates a predetermined way to create a large number of participants to maintain the blockchain network. It helps in increasing the decentralization & security of the blockchain. Using the mechanism Threshold Proof-of-Stake (TPoS) NEAR creates a fair reward distribution system for the users of the dApps.

Let’s uncover why startups and enterprises should consider building their dApps and blockchain-powered solutions on the NEAR ecosystem.

Sustainability

NEAR protocol offers an efficient PoS network designed to ensure the network’s sustainability and make it highly efficient to run various dApps and blockchain solutions.

Cost-effective

The network imposes 1000x lower transactions on the users, significantly less than average third-generation blockchains. Furthermore, NEAR provides 30% of the transaction fees for contributing to the ecosystem’s growth.

User-friendly

NEAR protocol can generate a human-readable account address using a scoped DNS pattern. With this ability, the platform becomes user-friendly for everyone, including people with low technical knowledge about the blockchain and the NEAR ecosystem.

Secure

With a thriving network of active validators, NEAR protocol maintains integrity and ensures high security across the ecosystem.

Interoperability

Components like EVM and Rainbow Bridge help NEAR protocol enable interoperability among different independent blockchains, increasing the usability of use cases built on its ecosystem.

Pragmatic

Smart contracts on the NEAR protocol are written in basic community-supported programming languages- Rust and Assembly, avoiding the complexity of the whole process.

What Near Protocol Development service does LeewayHertz Offer?

Focusing on our objective to help enterprises launch innovative and feasible blockchain-powered solutions, we continue to work with the latest blockchain technologies. For Near Protocol, we offer the development of the following use cases.

Scalable dApps

Leveraging the benefit of infinite scalability offered by Near Protocol, we develop advanced, secure, and scalable dApps on the Near protocol befitting your specific use case. We also examine your project’s technical aspects and recommend ideas to increase your dApp’s utility.

NFT marketplaces

Our blockchain developers build innovative, feature-rich NFT marketplaces on Near Protocol, providing you with the most curated NFT trading experience. With the intrinsic characteristics of Near blockchain being fast and low-cost technology, we tailor your marketplace specifically to best suit your use case.

Smart contracts

We offer smart contract development to regulate your business processes on Near protocol. Our approach covers every aspect of contract development, from smart contract architecture to design, auditing, and optimization.

Exchange Bridges

We help enterprises leverage interoperability by helping them launch cross-chain bridges on the Near Protocol, allowing their users to seamlessly exchange tokens, arbitrary data, and resources across multiple independent blockchains.

Node and wallets

Based on your project-specific requirements, we help you develop and run a node on Near Protocol. Also, we develop and integrate wallets into your dApp and decentralized exchange to support dApps and associated transactions.

DAO Integration

For your projects to be DAO-enabled on the NEAR protocol, we offer DAO creation and integration, keeping various aspects of your project in mind. DAO help you build trust among the users by allowing them to propose changes to the protocol and take other decisions.

Maintenance & upgrade

Besides development, we offer consistent support and maintenance services to our clients to ensure their dApps are optimized and running with no downtime. We also assist clients with existing dApps to upgrade their applications and keep a tight check on them, ensuring efficient lifetime performance.

Conclusion

NEAR Protocol is one of the most innovative and technically advanced protocols available in the blockchain ecosystem. NEAR Protocol is equally focused on developing decentralized applications (dApp) as it uses sharding technology to achieve scalability.

To accommodate this mission, NEAR Protocol has incorporated features like human-readable account names instead of cryptographic wallet addresses and made it considerably easier for the dApp users to interact with the blockchain network and the smart contracts.

Our team at LeewayHertz helps startups and enterprises build their blockchain solutions and dApps on NEAR blockchain to leverage the full advantage of NEAR’s ecosystem, including its high speed, scalability, sharding solutions, and interoperability and low fees.

If you want to build blockchain solutions with NEAR Protocol, we are happy to collaborate with you. Connect with our blockchain experts to discuss your project requirements.

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Author’s Bio

Akash Takyar
Akash Takyar
CEO LeewayHertz
Akash Takyar is the founder and CEO at LeewayHertz. The experience of building over 100+ platforms for startups and enterprises allows Akash to rapidly architect and design solutions that are scalable and beautiful.
Akash's ability to build enterprise-grade technology solutions has attracted over 30 Fortune 500 companies, including Siemens, 3M, P&G and Hershey’s. Akash is an early adopter of new technology, a passionate technology enthusiast, and an investor in AI and IoT startups.

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