Friday, September 29, 2023

What is Near Protocol?

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Smart contract-enabled blockchains aren’t a new concept. They’ve been around since 2015, when the Ethereum mainnet was launched, and there are currently more than a dozen such platforms in existence.

However, despite the rapidly growing demand for decentralised applications (dapps) and the development of increasingly sophisticated and competent dapps, some significant friction points continue to prevent widespread adoption.

NEAR is a newcomer that aims to solve the constraints of previous systems with a community-governed sharded blockchain platform with interoperability and scalability as its fundamental values.

So what is the Near Protocol?

When it was first proposed in 2014, the NEAR Protocol was envisioned as a community-controlled cloud computing platform with the ability to run smart contracts. The NEAR Collective built NEAR with the goal of hosting decentralised apps (dApps) and competing with Ethereum and other prominent smart contract-enabled blockchains like EOS and Polkadot. Transaction costs and storage are funded by NEAR’s native coin, also known as NEAR. Token holders who contribute in establishing network consensus as transaction validators can stake NEAR tokens as well.

NEAR Protocol’s primary goal is to provide a platform that’s both easy to use and appealing to developers. To meet this goal, NEAR has included features like human-readable account names instead of just cryptographic wallet addresses, and the possibility for new users to engage with dApps and smart contracts without the need for a wallet at all.

NEAR-based projects include Mintbase, a platform for minting non-fungible tokens (NFTs), and Flux, a protocol that lets developers to design markets based on assets, commodities, real-world events, and more.

The Technology

As the use of decentralised applications (dApps) has increased, the crypto community has been increasingly concerned about scalability. A blockchain’s capacity to process a large number of transactions at an acceptable speed and cost is known as scalability. While some individuals advocate for solutions to be implemented on top of Ethereum (Layer-2 solutions), other projects like NEAR have made a conscious decision to create new blockchains with a distinct design in order to address scaling issues.

The deployment of sharding is NEAR Protocol’s answer to the scalability issue. Identifying the three primary tasks of blockchain nodes is helpful before digging into what this implies. They process transactions, relay verified transactions and finished blocks to other nodes, and store the network status and history. Because of increased network congestion, these activities become increasingly difficult for nodes to do.

In order to make the network more manageable, it might be divided or partitioned into smaller, more manageable units (or fragments). Because only the code relevant to each shard needs to be run on each node using this strategy, the network’s capacity may grow as the number of nodes rises because each node only needs to run the code relevant to its own shard.

NEAR utilises a PoS mechanism to help nodes reach agreement. To participate in PoS, nodes who want to be transaction validators must stake their NEAR tokens first. Token owners who don’t wish to run a node can delegate their stake to validators of their selection. To pick validators for each epoch (about every 12 hours), NEAR employs an auction mechanism, and validators with bigger stakes have a greater say in the process of consensus.

While some validators are charged with validating “chunks” – an aggregation of transactions from a single shard — others are tasked with creating blocks, which comprise chunks from all the shards. “Fishermen” are nodes that keep an eye on the network for suspicious activity and report it to the rest of the network. A validator’s stake will be reduced if they behave poorly.

Token Economics

The NEAR token is primarily used to pay transaction fees and to store data on the blockchain. NEAR also provides NEAR tokens as an incentive to a number of blockchain participants. Every epoch, transaction validators get an NEAR token reward equal to 4.5 percent of the overall NEAR supply as compensation for their efforts.

Smart contract developers also get a cut of the transaction fees they produce. The remaining fees after each transaction are disposed of, thus reducing the supply of the NEAR token. NEAR has also set up a protocol treasury, which gets 0.5 percent of the entire NEAR supply yearly, to invest in the growth of the ecosystem.

In addition to NFTs, NEAR Protocol may support tokens that are “wrapped” from other chains. A similar bridge has been created between NEAR and Ethereum by NEAR, allowing users to send and receive ERC-20 tokens.

#nearindia #nearprotocol #indiawantscrypto #w

In addition to NFTs, NEAR Protocol may support tokens that are “wrapped” from other chains. A similar bridge has been created between NEAR and Ethereum by NEAR, allowing users to send and receive ERC-20 tokens.

#nearindia #nearprotocol #indiawantscrypto  #wazirxwarriors

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