Abstract

The NEAR protocol is an underlying blockchain that uses the unique sharding technology of the Night Shadow protocol to achieve scalability. In 2020, the protocol was launched as a decentralized cloud infrastructure for hosting decentralized applications (DApps).  

The NEAR blockchain utilizes Rainbow Bridge and Layer 2 solution Aurora to achieve cross-chain interoperability. Users can transfer ERC-20 tokens and other assets in the Ethereum blockchain to the NEAR protocol network and enjoy the convenience of the latter's high throughput and low transaction fees.

NEAR is the native token of the NEAR protocol and is used to pay transaction fees and data storage fees. NEAR token holders can also use the NEAR wallet to stake tokens to receive rewards, or use tokens to vote for governance proposals.

Introduction

With the popularity of cryptocurrency and blockchain technology, the demand for transactions is growing day by day, and Bitcoin Bitcoin, Ethereum, and other networks are beginning to face scalability challenges. Decentralized applications and non-fungible tokens (NFTs) have attracted much attention, highlighting the problems of the Ethereum blockchain in this regard. Traffic spikes often cause Ethereum’s gas prices to rise and transaction costs to rise, which may deter many users and developers.  

Today, several teams are exploring scaling solutions for blockchain networks, and the NEAR Protocol (NEAR) team is focused on how to use sharding to solve these limitations.

What is the NEAR protocol?

The NEAR protocol is an underlying blockchain that uses sharding technology to achieve scalability. The protocol employs smart contracts and uses a proof-of-stake (PoS) consensus mechanism to secure the network. The NEAR platform was co-founded by Alex Skidanov and Illia Polosukhin in 2020 and is built by the NEAR team. The project direction is to establish a community-operated cloud infrastructure for hosting decentralized applications (DApps).

The NEAR platform includes various programming tools, supports different programming languages, and runs smart contracts with cross-chain functions to help developers build DApps. The platform simplifies the registration process by replacing crypto wallet addresses with human-readable account names. As a PoS blockchain, NEAR received the climate neutral product label in 2021 for achieving carbon neutrality.  

How does the NEAR protocol work?

In order to defeat other smart contract-based blockchains such as Ethereum, EOS, Polkadot, etc., the NEAR platform adopts the following technologies in the ecosystem to improve platform performance.

YeYing Sharding

YeYing protocol is the core technology of NEAR blockchain, which is improved through sharding Data processing efficiency. Sharding refers to dividing transaction processing work into fragments and dividing it among multiple validator nodes. This allows each node to process only a small portion of the transactions in the network, thus increasing the number of transactions per second.

According to the Night Shadow protocol, block producers and validators on the NEAR platform process transaction data on multiple shards at the same time. Each shard will produce a portion of the next block. Each part is called a chunk. The NEAR Protocol blockchain processes and stores these data blocks, completing the transactions recorded within them.

Theoretically, after adopting the Night Shadow protocol, the NEAR platform can handle millions of transactions per second without affecting the overall operation. The platform will refer to real-time network conditions and automatically divide or merge shards based on network traffic and resource utilization. When network traffic is large, the platform will increase the number of nodes to maintain overall efficiency and avoid rising transaction fees.

Unlike other PoS networks, validators do not need to compete for stakes to compete for the next block. The NEAR platform uses the TPoS election mechanism to select validators. The TPoS mechanism is similar to an auction. A large number of validators who are willing to bid declare how many NEAR tokens they are willing to pledge through signature transactions. Next, TPoS determines the minimum amount of pledge required to become a validator at various time periods (usually 12 hours apart). If the pledge amount exceeds this threshold, you will have a chance to be selected as a verifier, and the selection probability is proportional to the pledge amount.  

Rainbow Bridge

Rainbow Bridge is an application on NEAR that allows users to convert ERC- 20 Tokens, stablecoins, wrapped tokens, and even non-fungible tokens are transferred between Ethereum and NEAR blockchains. Developers and users can enjoy the convenience of high throughput and low fees brought by the NEAR protocol.  

Rainbow Bridge is a completely permission-free and decentralized application. When bridging tokens, users can directly transfer ERC-20 tokens from MetaMask or other Web3 wallets to NEAR wallets, or perform the reverse operation. First, users need to store tokens under a smart contract on Ethereum. Since tokens cannot be transferred directly between networks, tokens will be locked by Ethereum and withdraw from circulation. New tokens will be created on NEAR to represent the original tokens, keeping the total circulating supply of tokens in both blockchains unchanged.  

In most cases, transactions on NEAR are confirmed within 1-2 seconds and cost less than $1. However, if users want to transfer their tokens back to Ethereum, it will cost more time and money. The final fee depends on Ethereum’s real-time traffic and gas prices.  

Aurora

Aurora is a Layer 2 solution in the NEAR protocol blockchain, designed to help developers expand applications on Ethereum-compatible platforms and reduce user costs. transaction costs. According to NEAR, Aurora can handle thousands of transactions per second, with block confirmation times of only about two seconds.

Aurora consists of the Aurora engine and the Aurora bridge. The Aurora engine is based on the Ethereum Virtual Machine (EVM) of the NEAR protocol, is compatible with Ethereum and supports all available tools in the Ethereum ecosystem. This allows developers to easily get started on the NEAR platform without having to rewrite DApps or learn how to use new development tools. Developers can also use the Aurora Bridge (the same technology as the Rainbow Bridge) to seamlessly transfer smart contracts and ERC-20 tokens between the Ethereum and NEAR Protocol blockchains. Users can also use Ethereum to pay transaction fees on Aurora .

What is the NEAR token?

NEAR Protocol (NEAR) is the native token of the NEAR ecosystem . It is an ERC-20 token with a maximum supply of 1 billion. NEAR tokens can be used to pay transaction fees and data storage fees in the network. At the same time, smart contract developers can receive transaction fees generated by the contract part of the fee. To ensure the scarcity of NEAR tokens, the remaining transaction fees will be burned.

Token holders can use the NEAR wallet to earn rewards by staking tokens. Staking tokens After tokens are issued, verification nodes can be run to obtain rewards. The total reward pool is 4.5% of the total supply of NEAR tokens. Token holders can also participate in the governance of the NEAR network, submit and vote on proposals related to the platform and products.

How to buy NEAR tokens on Binance?

You can buy NEAR tokens on Binance and other cryptocurrency trading platforms Buy NEAR tokens. 

1. Log in to your personal Binance account and click [Trade]. Select [Standard Edition] or [Professional Edition] trading interface.

2 .Click [BTC/USDT] to open the search bar. Enter "NEAR" to view available trading pairs. In the example, we selected NEAR/BUSD.

Click [Spot] on the right area, enter the amount of NEAR you want to buy. You can place orders through different order types. Select the order type, such as market order, and click "Buy NEAR". These NEAR tokens will be deposited into your spot wallet.

Summary

With the development of the blockchain field, platforms with lower transaction fees and higher throughput are more likely to lead the industry to the mainstream. NEAR’s scaling solutions can attract developers looking to build more efficient DeFi products and decentralized applications (DApps). NEAR’s roadmap includes developing sharding technology and Layer 2 cross-chain solutions to further scale its blockchain and ultimately benefit developers and end-users.