What is NEAR Protocol Blockchain and Cryptocurrency?

NEAR Protocol is an open source, high-throughput smart contract platform. NEAR’s sharding feature divides the blockchain into several chunks. 2021 saw the update.

The project’s cryptocurrency is NEAR. Transactions and betting are its key activities. Coinholders can delegate NEAR to validators. NEAR operates hundreds of protocols and decentralized apps. Aurora, REF, and Burrow are the biggest.

Who Developed NEAR?

Skidanov and Polosukhin invented NEAR Protocol. The project started in 2018. Facebook, Google, and Niantic developers later joined NEAR. Two team members have won twice. During the NEAR ICO in August 2020 on CoinList, 120 million NEAR coins were sold for $0.3.

NEAR ecosystem’s history

• In 2021, developers created the Rainbow Bridge cross-chain bridge, which interoperates with Ethereum and transfers ERC-20 crypto assets to the NEAR Protocol and vice versa.
• Aurora, a second-layer solution, lets Ethereum Virtual Machine (EVM) smart contracts to run on the NEAR Protocol network.
• NEARCON will be held every fall in Portugal starting in 2021. In October 2021, it launched a $800 million fund to finance blockchain engineers and applications.
• In 2022, Tiger Global, FTX Ventures, Dragonfly Capital, and others invested $350 million in NEAR. ConsenSys then announced a cooperation between NEAR and Infura.
• BitGo, a custodian for institutional investors, joined NEAR in 2022.
• The NEAR Foundation launched a $100 million Web3 fund in mid-September 2022.

Using NEAR

The NEAR protocol uses sharding technology to divide the blockchain into small portions (shards) that can perform tasks in simultaneously. All NEAR shards are part of the same blockchain, unlike Polkadot.

NEAR Protocol’s Nightshade method ensures the blockchain’s integrity by adding only a snapshot of each shard’s current state to each block. Each shard has validator nodes that relay its state whenever a block is created. NEAR Protocol triggered Nightshade in 2021.

Imagine this as a crossroads. Each road is an NEAR shard. Shards run in parallel because their transactions don’t overlap. It boosts system performance.

Doomslug allows validator nodes to take turns producing blocks every 12 hours. Every second, a brick is created.

Block creation rewards are new NEAR currencies. Validators and delegated staking pools receive 90% of block rewards. NEAR Treasury gets 10%.

The cryptocurrency NEAR and the stablecoin USN

The NEAR Protocol blockchain has its own currency, which is called NEAR. It is used for all transactions on the network and for validator nodes and delegators to “stake” their coins. Even though validators and delegators get paid when new coins are made, some of those coins are burned to pay the network commission.

Network fees have to be paid with the NEAR cryptocurrency. At the same time, 30% of the fees are sent automatically to the people who made the smart contract that was used, and 70% of the fees are sent to the validators. NEAR also has the option of “free” transfers, where the contract operator pays for the transaction when it is turned on.

The most NEAR coins that can ever be made is one billion. According to CoinMarketCap, there were already more than 781 million NEAR in circulation at the start of September 2022. NEAR is one of the top 30 cryptocurrencies in terms of its market value.

The first algorithmic stablecoin, USN, was released on the NEAR network at the end of April 2022. Its price is kept stable by arbitrage operations and a reserve fund made up of NEAR and USDT coins. The token is taken care of by the DAO Decentral Bank. When USN came out, the market was not in a good place because Project Terra had just failed (LUNA).

NEAR Staking in Cryptocurrency

To run a validator node in NEAR, you need to send the NEAR cryptocurrency to the staking smart contract. You will also need equipment that meets the protocol’s requirements.

The exact size of the bet depends on how many coins other validators in that shard have. This metric also shows how much of the block rewards are paid out each epoch (12 hours).

In NEAR, there are 100 seats in each shard. You must have at least one “seat” to be a validator. The total number of NEAR tokens locked in the staking contract for a shard determines how much each “place” is worth. If a validator breaks the rules, they could lose some of their stake.

The goal of this model is to give validating nodes a reason to run new or smaller shards that are easier to join. If the user doesn’t have enough money to buy enough NEAR cryptocurrency to buy a “seat,” he can try to convince the delegators to send funds to him so that he can manage them through staking pools. Users get a piece of the reward for new blocks from the validators they stake on in exchange for giving them tokens.

The Staking Rewards website says that in September 2022, staking NEAR will bring in 5-6% per year.

Who is in charge of the NEAR Protocol?

The NEAR Foundation, a non-profit organization based in Switzerland, is the main organization working on the project. Ilya Polosukhin, who helped start NEAR, is one of its leaders and is well-known in the industry.

The NEAR Foundation is also in charge of the project’s funds. The NEAR Protocol community can come up with ideas for projects that the treasury can pay for. Members of the community also work together in different groups that focus on different areas of growth. On the official NEAR forum, proposals are posted and talked about.