What is the near protocol and how does it work?

Near Protocol, a smart blockchain compatible with contracts, just like Ethereum, was launched in 2020 to incentivize developers to create and launch more decentralized applications (dApps). The Near Protocol uses the sharding process to achieve greater scalability with vastly improved processing speeds, the two main drawbacks of existing blockchains.

Sharding consists of dividing the main blockchain into subchains or fragments like the branches of a tree. Each branch or shard has its own independent processing capability with a dedicated set of validators (or nodes). In doing so, each fragment bears only a fraction of the total charge. Such an architecture decongests the main chain and spreads the load horizontally, leading to faster operating speeds.

The Near Protocol is not based on a single entity but is managed by the computers on its network. It’s like Amazon Web Services (AWS), which allows developers to build their applications and deploy them on the blockchain without needing to create the underlying architecture first.

NEAR is the native token of the Near blockchain.

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How does the near protocol work?

The Near Protocol uses the Proof-of-Stake (PoS) consensus mechanism for transaction validation. This means that users must commit a certain number of NEAR tokens to the blockchain to become validators (or nodes) on the network. The pledged amount is locked in during this time, and nodes earn rewards in the native token for devoting their resources to authenticating transactions.

The partitioning solution used by the Near protocol is called Nightshade. The blockchain uses the following solutions to power its operations:

Black nightshade: This scaling allows the blockchain to grow infinitely while only storing a portion of the full data on each shard. It allows the blockchain to achieve fast transaction speeds by dividing current data into “chunks” and maintaining a single string of processed data. Nodes examine these chunks and then add them to the main chain when done.

Nightshade reduces many potential security failures because nodes in each shard do not access all of the data being validated.

Rainbow Bridge: As its name suggests, this solution allows interoperability between Ethereum and Near protocols. It facilitates the transfer of tokens between the two networks. To execute such a transaction, users must first purchase ETH and enter into a smart contract, which then locks the ETH tokens and strikes NEAR on the Near blockchain representing equal value. If users wish to retrieve the original ETH, the smart contract allows them to rollback the transaction and retrieve the tokens again.

Dawn: It is a layer 2 protocol built on top of the Near blockchain (layer 1). It is designed to allow coders to build applications and deploy them on existing infrastructure. Thanks to the Rainbow bridge, the applications are supported by Ethereum but deployable on the Near protocol. Aurora uses the Ethereum Virtual Machine (EVM) with the help of Rainbow Bridge to link the smart contracts on the two chains. It also allows users to reap the benefits of the low fees and higher throughput capabilities of the Near network.

Main features of the close protocol

The Near protocol uses the “progressive security” approach, which means that users must provide very basic personal information when joining the Near network. And they can provide the rest of the details when they initiate their first transaction on the Near network. This ensures that the interface is user-friendly and looks like most web pages.

Additionally, the Near Protocol uses a unique consensus mechanism called Doomslug, which increases efficiency while ensuring that “finality” is achieved within seconds of the transaction. Finality means that the associated data cannot be altered or reversed by anyone on the network once added to the blockchain. Validators take turns producing blocks instead of competing based on the number of tokens staked by each node.

The ease of app development means more mental capacity can be devoted to building apps with advanced capabilities. Some applications can even sign transactions based on user approval without requiring a user’s physical presence.

Additionally, Near can achieve transaction speeds of up to 1,00,000 TPS (transactions per second) with instant finality. This also means that transaction fees on Near are 10,000 times lower than Ethereum.

Near-based projects:

Mint base: A platform focused on making it easier to issue and sell NFTs while making it much cheaper.

Paras: An NFT marketplace that curates high-quality creations from selected artists.

The NEAR token is currently trading at $8.55 with a market cap of $5.45 billion. Currently, 638.89 million NEAR tokens are in circulation, with an upper limit of one billion tokens.

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