What is cryptocurrency Near (NEAR) Protocol (NEAR) and how does it work?

What is Near Protocol (NEAR)?

Near Protocol is a Proof of Stake (PoS) blockchain project supported by a robust ecosystem of developer tools and cross-chain compatibility code. Like Ethereum, it is intended to serve as a platform for developers creating applications and NFTs. Near Protocol serves as a low-cost, highly scalable alternative platform for these use cases.

Moreover, the Near ecosystem includes technology that makes Near Protocol not only a competitor of Ethereum but compatible with it.

Face it, most decentralized applications (DeFi apps, games) and NFTs are based on Ethereum, whose ability to run smart contracts made it the platform of choice for developers. Alternative development platforms have emerged, almost all of them faster, less expensive, and more scalable than Ethereum. They are having some success, although, today, developers need to target Ethereum because that’s what their potential users and customers have.

The Near ecosystem addresses this problem with two technology solutions.

The Rainbow Bridge

The first is the ETH ↔ NEAR Rainbow Bridge, which allows assets to flow freely between the Near and Ethereum blockchains. Ethereum ERC-20 tokens work fine on the Near blockchain, so users can do a simple wallet-to-wallet transfer without the trouble and expense of converting coins.

Near describes the Rainbow Bridge as trustless and permissionless. The bridge allows any information that is cryptographically provable on NEAR to be usable in Ethereum contracts and vice versa — including the ability to read the state and schedule calls with callbacks on the other chain.

Many of the crypto world’s most popular tokens are built on the Ethereum blockchain. The Rainbow Bridge allows not just ETH, but all of the tokens built on the Ethereum protocol to interoperate with the Near blockchain and apps. Among the compatible tokens are:

• Stablecoins like USDT, DAI, and TUSD
• Wrapped assets like WBTC and WETH
• DEX tokens like UNI and 1INCH
• Lending tokens like AAVE and COMP
• Service company tokens like HT and CRO

The Aurora virtual machine

The second part of Near’s Ethereum compatibility solution is Aurora, a virtual machine capable of executing Ethereum smart contracts.

With Aurora, Near takes a step closer to its expressed goal of making Near Protocol “a network that empowers users to take control of their data, their finances, and the tools to govern.”

Built by Near Protocol’s core team (now known as Pagoda), Aurora is an EVM – an Ethereum virtual machine that can create and execute smart contracts. Most EVMs work on the Ethereum blockchain. Aurora executes Ethereum smart contracts on the Near blockchain, an environment that offers speed, security, cost, and scalability benefits compared to Ethereum. Pagoda says the Near Protocol sharded blockchain design allows the network to process thousands of transactions per second.

With Aurora, Ethereum developers can offer users the speed and low fees of Near Protocol without rewriting any code. Aurora provides access to the Near blockchain, and the Rainbow Bridge supports the transfer of assets.

How Does Near Protocol Work?

Near Protocol is a third-generation Proof-of-Stake blockchain that was carefully designed to overcome the limitations of generation one (Bitcoin) and generation two (Ethereum) blockchains. It is tempting to cite Near’s compatibility features and mature development tools as the reason for the ecosystem’s success, but the underlying Protocol deserves much of the credit.

Near Protocol uses a sharding solution called Nightshade to boost capacity. With sharding, transactions are posted to side chains, eliminating competition and waiting time for block validation on the main chain. Later, once a side chain has validated a block of blocks, the net result is posted asynchronously to the main chain.

Near’s stated goal is to serve as an essential blockchain ecosystem for Web3 developers and apps. It is pursuing that goal in three ways.

First is the mature set of robust development tools, including source code and documentation for the Near blockchain.

Second is the sharding solution and other technology that allows Near Protocol to scale up to meet the needs of real-world users and applications.

The third is multi-chain compatibility which allows Near and Near-based applications to run alongside Ethereum and Ethereum-based solutions like Polkadot and Cosmos. The Near team is hard at work on expanding the list of compatible networks, publicly announcing its plans to add support for Solana, Terra, Celo, and other protocols.

Who Are the Founders of Near Protocol?

NearProtocol – now Pagoda – was co-founded by Erik Trautman, Alex Skidanov, and Illia Polosukhin. The Near mainnet went live in April 2020, and the NEAR token was launched five months later. 

A self-described entrepreneurial fire-starter, Trautman founded several high-tech companies before teaming up with Skidanov and Polosukhin to create the Near Protocol, for which he has served as head of operations and CEO.

Skidanov started his professional career at Microsoft, then joined memSQL in 2011. He served as architect and director of engineering for that company. Skidanov won the International Collegiate Programming Contest bronze medal in 2005 and the gold medal in 2008.

Polosukhin joined Near after nine years in Big Data predictive analytics and AI – the last three at Google, where he managed a team of deep learning and natural language understanding researchers.

In February 2022, Near introduced Pagoda, which it described as the world’s first Web3 startup platform, an end-to-end solution for developer entrepreneurs. Pagoda builds upon the company’s work creating and building upon Near. The new platform provides what Near describes as a fully Web3-native toolset for building, maintaining, and scaling blockchain-based startup projects.

The Pagoda team now numbers more than 70 members in 20 countries. Pagoda continues to contribute to the NEAR ecosystem by building, maintaining, and extending the protocol, SDKs, and APIs while releasing more tools and services for developers and users.

What Makes Near Protocol Unique?

Near NEAR

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The Web3 future gets closer every day. Near is developing some of the difficult but necessary technology that will make cross-blockchain apps not just achievable, but the norm.

Near is also distinguished from most other blockchains by the depth and breadth of its developer tools. Near understands that first and foremost, the Near network is a platform for building apps. Every step the company takes is geared toward making the Near Protocol a top choice for developers of blockchain-based applications and services.

A grants program, a start-up accelerator, and a developer sandbox contribute to making Near a top choice for Web3 and blockchain developers. The Near Academy, Near University, and Near Certified Developer programs leverage courses on fundamentals and advanced topics for blockchain developers.

Near Foundation also engaged South Pole, the leading low-carbon project developer, and climate solutions provider, to measure NEAR Protocol’s carbon footprint and help the group meet its climate neutrality commitment. By offsetting the first year’s emissions by supporting tree-planting projects and seeking to reduce avoidable emissions until the second accounting year, NEAR achieved South Pole’s Carbon Neutral product label in 2021.

What Gives Near Protocol (NEAR) Value?

Near and its vision have received hundreds of millions of euros in backing from Andreesen Horowitz, Coinbase, Alchemy, Keep, Maker, OpenSea, Solana, Celo, Trust, Blockchange Ventures, ParaFi Capital, MetaWeb Ventures, Hashed, Republic Capital, Tiger Global, FTX Ventures, Dragonfly, Einsvill Labs, Three Arrows Capital, Mechanism Capital, a16z, Jump, Alameda, Zee Prime, and 6th Man Ventures.

On a day-by-day basis, the value of the Near Protocol project – and the NEAR coin – rise as more development teams choose it for dApps and NFTs.

Additionally, NEAR is subject to market, political, economic, and other factors that affect the crypto market as a whole.

How Many Near Protocol (NEAR) Tokens Are in Circulation?

Near Protocol created 1 billion NEAR tokens when the network went live in April 2020. About 754 million – 75.4% – are currently in circulation. The coins are currently allocated according to these percentages:

Backers: 17.6%

Community grants and programs: 17.2%

Core contributors: 14.0%

Community sale: 12.0%

Early ecosystem: 11.7%

Operations grants: 11.4%

Foundation endowment: 10.0%

Small backers: 6.1%

How Is the Near Protocol Network Secured?

Near Protocol is secured through a Proof-of-Stake (PoS) protocol.

PoS blockchains are equally secure as Proof-of-Work blockchains like Bitcoin and Ethereum, but they consume much less electrical power and therefore do less damage to the environment.

How is Near Protocol Used?

Near Protocol is used almost exclusively as a platform for issuing NFTs or developing dApps.

Three main use cases have emerged for Near:

1. DeFi apps emerged on Ethereum first, but the low fees, high speed, and scalability of Near Protocol positioned itself as an obvious alternative for developers. Near’s comprehensive set of development tools and its two-pronged approach to compatibility with Ethereum make the platform even more enticing.

2. NFTs have become an important way to produce, distribute, and monetize content. Near is popular among NFT creators because it supports the most popular NFT formats created on Ethereum, but ownership can be transferred more quickly at a lower cost.

3. Decentralized autonomous organizations, or DAOs, have emerged as an alternative to profit-making corporations to manage blockchain-based products and services. Near offers developers a simple way to implement DAOs of community members to participate in governance and make important decisions by voting. 

The Bottom Line

Near Protocol is an innovative and unique project that aims to provide a new form of blockchain infrastructure based on its high speed, low costs, and compatibility with existing dApp platforms.

This third-generation blockchain project could become a dominant smart dApp platform, but its relationship with the Pagoda project makes it’s future unclear.

A truly ambitious project, only time will tell what the lasting effects of Near Protocol will be on the world of crypto and the world at large – but the future is definitely looking bright.

Near Protocol FAQ

How to Buy Near Protocol (NEAR)?

Buying Near Protocol (NEAR) is as easy as visiting our guide on how to buy Near Protocol.

How to Sell Near Protocol (NEAR)?

If you already own NEAR and hold it on a Kriptomat exchange wallet, you can easily sell it by navigating the interface and choosing your desired payment option.

Near Protocol Price

The current Near Protocol price is 0.534346 €.

The 24-hour trading volume of NEAR is 568,016,840 €. NEAR is currently ranked #6 of all cryptocurrencies by total market capitalization, with a market cap of 18,026,205,928 €. It has a circulating supply of 33,820,262,544 NEAR.

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