As the crypto market continues to gain popularity, many promising crypto projects tend to get overlooked. NEAR Protocol is one such project that, despite its great technical and application potential, has failed to receive the attention it deserves. This article will give you an in-depth understanding of NEAR Protocol and discuss why it may become one of the most competitive smart contract protocols in 2022.
Background on NEAR Protocol
NEAR Protocol was founded in 2017 by Alexander Skidanov and Ilya Polosukhin. The protocol was built by RealInc., a for-profit software company based in San Francisco, California, and its development is orchestrated by the NeXFrand Foundation, a nonprofit organization based in Switzerland. Between 2017 and 2020, NEAR Protocol raised approximately $50 million through various token sales. The last public sale was so popular that it completely overwhelmed the Coinlist website, forcing it to be postponed.
Technical features of NEAR Protocol
NEAR Protocol is best known for its Whiteboard series on YouTube, a collection of video interviews that invites some of the best developers in the cryptocurrency space to explain their respective crypto projects in detail. NEAR Protocol's mainnet was launched in April 2020, and the project is still technically in the development stage. NEAR Protocol uses a high-performance sharded proof-of-stake blockchain that can handle up to 100,000 transactions per second.
Currently, NEAR Protocol has only one shard and can handle 800 to 1,000 transactions per second. Recently, it started rolling out its Nightshade sharding mechanism. A single shard of NEAR Protocol only has about 60 validators, and while this number is not the lowest, the threshold for being a validator is very high, with one of 100 validators being worth about $30 million in NEAR coins.
Fortunately, NEAR Protocol allows delegation, and it can be easily done through its user-friendly web wallet with no minimum authorization. For validators and authorizers locked in one day, the reward is approximately 11%. A portion of the stake of misbehaving validators will be slashed, and these slashed NEAR coins will be reallocated to other validators.
Usage scenarios of NEAR Protocol
In addition to using NEAR coins to pay transaction fees, all transaction fees on the NEAR Protocol will be burned and made less involved in smart contracts. In this case, part of the transaction fees will be paid to the creator of the smart contract. The NEAR Protocol chain has its own native Virtual Machine to run smart contracts, as well as an Ethereum Virtual Machine provided by another crypto project called Aurora.
According to Defillama, NEAR Protocol has only 2 DeFi protocols with a total value of approximately $100 million. However, NEAR Protocol has dozens of active DeFi protocol dApps and over 200 projects built on its blockchain. While NEAR Protocol EVM with Aurora did lock another $130 million in total value across 4 DeFi protocols, this still doesn’t seem to account for the true total value recorded within NEAR Protocol’s DeFi ecosystem.
Updates to NEAR Protocol
It’s been a year since we last reported on NEAR Protocol, and some major events have happened since then:
1. Release of TUSD Stablecoin
In November last year, the TUSD stablecoin announced that it would be the first to be released on the NEAR Protocol Blockchain.
2. Joining of Dragonfly Capital
In January of this year, Dragonfly Capital joined NEAR Protocol’s Validator Advisory Committee. Dragonfly Capital is one of the largest venture capital firms in the crypto space.
3. US$250 million in project funding
In February this year, the NEAR Foundation announced that it would build a $250 million project on the NEAR Protocol chain in the next four years.
4. Launch of NEAR Academy
In March, NEAR Protocol launched a website called NEAR Academy, where you can learn about crypto and earn digital certificates of completion, which are NFTs minted on the NEAR Protocol blockchain.
5. Implementation of Rainbow Bridge
NEAR Protocol has also completed the Rainbow Bridge, which allows ERC20 tokens to be transferred seamlessly between NEAR and Ethereum, and connects them to the NEAR blockchain as well as Aurora’s EVM layer.
6. Operation of DeFi protocol
In April, NEAR Protocol announced that its first DeFi protocol was operational, which is obviously dependent on the completion of the Rainbow Bridge.
7. Aurora integration
In May, Aurora completed integration with the NEAR Protocol, enabling an “Ethereum Layer-2 experience on the NEAR blockchain.”
8. NFT collectibles and markets
In June, NEAR Protocol announced the launch of a hip-hoo-focused NFT collectible and marketplace called hip-hop heads, which debuted with hundreds of thousands of dollars in transactions.
9. Grayscale considerations
In July, Grayscale revealed that it was considering creating additional cryptocurrency trusts, and NEAR Protocol was among them. Although Grayscale has not released the NEAR Protocol Trust yet, given its recent release of the Solana trust, we should see the NEAR Protocol soon.
10. Metabuidl Metaverse Hackathon
In August, NEAR Protocol announced the launch of the Metabuidl Metaverse Hackathon. Note that this was before the Metaverse was still very unpopular.
11. Cooperation with Filecoin
In September, NEAR Protocol announced a partnership with Filecoin to enable NEAR Protocol developers to store their smart contract data in a decentralized manner. They even have a $300,000 incentive fund for developers.
Conclusion: NEAR Protocol is a smart contract protocol with great potential. Although it may not have received the attention it deserves at present, with the continuous advancement of its technology and the expansion of application scenarios, we have reason to believe that it will play an important role in the future of encryption. occupy a place in the market. Whether it is its high-performance sharding technology or its cooperation with other projects, NEAR Protocol has demonstrated its innovation and competitiveness in the blockchain field. I hope this article helps you better understand NEAR Protocol and feel confident about the future of this project.