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NEAR Protocol (NEAR) Things You Need To Know Before Investment

What Is NEAR Protocol (NEAR)?

NEAR Protocol (NEAR) is a layer-one blockchain designed as a community-run cloud computing platform. That eliminates some limitations that have been bogging competing blockchains, such as low transaction speeds, low throughput, and poor interoperability. This provides the ideal environment for DApps and creates a developer and user-friendly platform. For instance, NEAR uses human-readable account names, unlike the cryptographic wallet addresses common to Ethereum. NEAR also introduces unique solutions to scaling problems and has its consensus mechanism called “Doomslug.”

NEAR Protocol is being built by the NEAR Collective, whose community is updating the initial code and releasing updates to the ecosystem. Its declared goal is to build a platform that is “secure enough to manage high-value assets like money or identity and performant enough to make them useful for everyday people.”

Flux, a protocol that allows developers to create markets based on assets, commodities, real-world events, and Mintbase, an NFT minting platform, are examples of projects being built on NEAR Protocol.

Who Are the Founders of NEAR Protocol (NEAR)?

NEAR Protocol was founded by Erik Trautman, an entrepreneur with experience on Wall Street and founder of Viking Education. His co-founders were Illia Polosukhin, who has more than ten years of industry experience, including three years at Google, and Alexander Skidanov. This computer scientist worked at Microsoft and went on to join memSQL, where he became the director of engineering. NEAR Protocol has an extensive team of experienced developers, including several International Collegiate Programming Contest (ICPC) gold medalists and winners. The team claims to have people with experience building some of the only real-world sharded systems at scale, a solution the Protocol is pursuing to improve blockchain scalability.

What Makes NEAR Protocol (NEAR) Unique?

NEAR uses its Nightshade technology to improve transaction throughput massively. Nightshade is a variation of sharding in which individual sets of validators process transactions in parallel across multiple sharded chains, improving the overall capacity of the blockchain. In contrast to “regular” sharding, shards in Nightshade produce a fraction of the next block, called “chunks.” In doing so, NEAR Protocol can achieve up to 100,000 transactions per second and achieve near-instant transaction finality thanks to a one-second block cadence while simultaneously keeping transaction fees at virtually zero.

NEAR Protocol also improves upon the convoluted onboarding process of other blockchains by having human-readable addresses and building decentralized applications with similar registration flow to what users have already experienced. Moreover, it provides developers with modular components, helping them start projects like token contracts or NFTs quickly.

Near Protocol Ecosystem Fund

On October 25, 2021, NEAR announced $800 million in ecosystem funding initiatives, following in the footsteps of various Layer-1s blockchains like Avalanche, Fantom, and Celo. The fund will be used to bankroll initiatives that will focus on accelerating growth in the NEAR protocol ecosystem. The fund includes $350 million in funding from Proximity Labs. Out of the total fund, $250 million will help existing projects scale, and $100 million will be allocated to the Startup Grant Pools, where 20 startups will be given $5M each. NEAR will focus on funding Decentralized Finance (DeFi) focused teams “actively revolutionizing and reimagining the way we interact with money.” NEAR is also actively looking for projects building on NFTs, DAOs, and gaming. On a separate note, NEAR recently raised $150 million in seed investment led by Three Arrows Capital, with additional participation from Mechanism Capital, Dragonfly Capital, a16z, Jump, Alameda, Zee Prime, and more. This will be used to accelerate the adoption of Web3 technologies.

How Many NEAR Protocol (NEAR) Coins Are There in Circulation?

The total supply of NEAR is 1 billion tokens, according to the following token distribution:

  • 17.2% – Community Grants
  • 11.4% – Operation Grants
  • 10% – Foundation Endowment
  • 11.7% – Early Ecosystem
  • 14% – Core Contributors
  • 17.6% – Backers
  • 6.1% – Small Backers
  • 12% – Community Sale

NEAR Protocol launched its mainnet on April 22, 2020, with 1 billion NEAR tokens created at genesis. 5% of additional supply is issued each year to support the network as epoch rewards, of which 90% goes to validators (4.5% total) and 10% to the protocol treasury (0.5% total). 30% of transaction fees are paid as rebates to contracts that interact with a transaction, while the remaining 70% are burned. The NEAR token is used for:

  • Fees for processing transactions and storing data.
  • Running validator nodes on the network via staking NEAR tokens.
  • Used for governance votes to determine how network resources are allocated.

How Is the NEAR Protocol Network Secured?

NEAR uses a variation of the proof-of-stake consensus mechanism called Doomslug. Doomslug is based on two rounds of consensus, where a block is considered finalized as soon as it has received the first communication round. This allows for near-instant finality by having validators take turns producing blocks rather than competing directly based on their stake.

The NEAR Foundation is a Swiss-based non-profit dedicated to protocol maintenance, ecosystem funding, and guiding the Protocol’s governance. The Protocol has also built a bridge to Ethereum, allowing users to transfer ERC-20 tokens from the Ethereum blockchain to NEAR.

Also Read: Stellar (XLM) Things You Need To Know Before Investing

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