What Is NEAR Protocol (NEAR)?
NEAR Protocol: A Scalable Blockchain Platform Driven by Sharding Technology
Amidst the crypto market boom and the increasing adoption of blockchain technology across sectors, particularly in decentralized applications (DApps) and non-fungible tokens (NFTs), existing networks like Bitcoin and Ethereum are grappling with significant scalability issues. These bottlenecks result in soaring transaction fees, negatively impacting user experience and developer enthusiasm.
Enter NEAR Protocol, a foundational infrastructure designed to overcome blockchain scalability hurdles through cutting-edge sharding techniques. The protocol establishes a secure network environment based on Proof-of-Stake (PoS) consensus, while offering developers an extensive and user-friendly suite of programming tools that support multiple languages for smart contract development and inter-chain communication, thereby lowering the barrier to entry for DApp creation.
Founded and led by Alex Skidanov and Illia Polosukhin in 2020, the platform aims to create a community-driven cloud infrastructure that fosters the growth and operation of decentralized applications. Notably, NEAR Protocol introduces innovative account handling, allowing users to use memorable usernames instead of intricate wallet addresses, enhancing usability and accessibility.
As a PoS blockchain focused on sustainability, NEAR Protocol has also made strides in environmental stewardship, earning a climate-neutral product label in 2021, demonstrating its commitment to carbon neutrality goals. These outstanding features have propelled NEAR Protocol into the global spotlight as a key player in addressing blockchain scalability challenges.
How the NEAR Protocol Works: Key Technologies Boosting Performance
The NEAR protocol distinguishes itself in the smart contract platform arena by integrating advanced technologies. It leverages sharding to dramatically enhance transaction processing capabilities, with each shard independently handling a portion of transactions for network-wide parallel scalability. Furthermore, the protocol employs the Proof-of-Stake (PoS) consensus mechanism to secure the network and ensure efficient operation while reducing energy consumption. To streamline development processes and foster cross-chain interoperability, NEAR offers a comprehensive suite of developer tools and supports innovative projects like Nightshade sharding, Rainbow Bridge, and Aurora, thereby strengthening the ecosystem's functionality and competitiveness.
Shadow Sharding: The High-Performance Pillar of the NEAR Protocol
Shadow sharding is a groundbreaking technology that underpins the scalability and efficiency of the NEAR blockchain. This innovative sharding solution enhances network data processing capacity by distributing transaction handling tasks across multiple independent shards.
In the NEAR protocol, block producers and validators work in parallel across these shards, with each responsible for generating a portion of new blocks called chunks. These chunks are integrated into the main blockchain, ensuring rapid and orderly processing of a large volume of transactions. In theory, NEAR's platform can handle millions of transactions per second, dynamically adjusting the number of shards during peak periods to accommodate varying network traffic and resource demands while maintaining low transaction fees and consistent performance.
What sets NEAR apart is its adoption of Threshold Proof of Stake (TPoS) for validator selection. Unlike traditional Proof of Stake, where staking amount alone determines block-producing rights, TPoS operates more like an auction. Potential validators declare their willingness to stake NEAR tokens through signed transactions. A minimum staking threshold is set at regular intervals, say every 12 hours, and those exceeding this threshold become eligible to be validators. Their right to validate blocks is allocated based on their staked amount relative to the total stake, implying higher chances of selection with larger stakes.
Rainbow Bridge: A Seamless Value Transfer Between Ethereum and NEAR
The Rainbow Bridge serves as a vital component in the NEAR Protocol ecosystem, bridging the gap between the Ethereum and NEAR blockchains. This application transcends the boundaries of individual blockchain networks, enabling frictionless transfers of assets, including ERC-20 tokens, stablecoins, wrapped tokens, and non-fungible tokens (NFTs).
In practice, users can effortlessly move ERC-20 tokens from the Ethereum network to the NEAR network, and vice versa, by using MetaMask or other compatible Web3 wallets for transactions. The process involves locking the tokens to be transferred in an Ethereum smart contract, then minting new tokens on the NEAR chain that represent the equivalent value, ensuring consistency in total supply across both chains for cross-chain circulation.
Designed to be permissionless and decentralized, the Rainbow Bridge significantly enhances the convenience and efficiency of asset transfers. On the NEAR protocol, transaction confirmations typically take just 1 to 2 seconds with negligible fees, often not exceeding $1. However, when transferring tokens back to Ethereum, the time and cost may vary due to Ethereum network congestion and fluctuating gas prices.
Aurora: Ethereum-Compatible Layer 2 Solution on the NEAR Protocol
Aurora, an innovative addition to the NEAR protocol ecosystem, is a Layer 2 solution specifically designed for enhancing Ethereum compatibility and scalability. Its primary objective is to lure developers into expanding their applications with the same functionality and tools as Ethereum while significantly reducing users' transaction costs.
Aurora consists of two components: the Aurora Engine and the Aurora Bridge. The Aurora Engine, in essence, is an Ethereum Virtual Machine (EVM) running on the NEAR protocol, seamlessly integrating with the Ethereum ecosystem. This allows developers to port Ethereum-based dApps to the NEAR platform without rewriting code or learning new development tools, dramatically reducing migration costs and boosting developer flexibility and efficiency.
On the other hand, the Aurora Bridge, inspired by the Rainbow Bridge technology, facilitates frictionless transfer of smart contracts and ERC-20 tokens between the Ethereum and NEAR protocol blockchains. As a result, users can enjoy an Ethereum-like environment on Aurora and pay transaction fees in Ether, benefiting from the high throughput and low latency offered by the NEAR protocol – processing thousands of transactions per second with block confirmation times around just two seconds.
NEAR Token: The Core Utility and Governance Tool of the Ecosystem
The native token of the NEAR protocol, also called NEAR, serves as the lifeblood and central incentive mechanism within its entire ecosystem. It has multiple roles. Firstly, it functions as an ERC-20 compliant token with a maximum supply capped at one billion tokens. Users utilize NEAR tokens to cover transaction fees and storage costs on the network. Notably, to preserve token scarcity, apart from a portion of transaction fees paid to smart contract developers, the remaining fees are burned.
Holders of NEAR tokens can earn rewards through staking; by simply staking in their NEAR wallet, they have the chance to become validators and receive system-allocated incentives, which stem from an annual inflation rate of 4.5% of the total supply. Furthermore, owning NEAR tokens grants users the right to participate in governance. They can propose improvements to the platform, developments of products, and influence the future direction of the NEAR protocol through voting.
The Current State and Future Plans of the NEAR Ecosystem
The NEAR Protocol ecosystem is thriving, fueled by its innovative Shadow Sharding technology and projects like Rainbow Bridge and Aurora, which have created a highly scalable blockchain environment with low transaction costs, attracting numerous developers and users. The NEAR token, serving as the core utility in the ecosystem, plays a pivotal role in paying fees, participating in governance, and incentivizing staking.
At present, the NEAR ecosystem has nurtured and supported a wide range of decentralized applications (DApps) spanning finance, gaming, NFT markets, DeFi, and more. Concurrently, the NEAR Foundation and community consistently drive technological advancements and optimizations to enhance network performance, foster cross-chain interoperability, and improve developer experience.
Looking ahead, the NEAR protocol aims to strengthen its ecosystem by attracting high-quality projects, promoting innovation through hackathons, and optimizing its infrastructure to accommodate larger-scale applications. Furthermore, NEAR will explore deeper collaborations with major public blockchains, fostering broader value interconnectivity. As Web 3.0 gains traction, the NEAR team is dedicated to pushing the practical application of blockchain technology in emerging fields such as decentralized identity verification and data sovereignty, striving to shape a more open, fair, and sustainable global digital economy.
A Step-by-Step Guide to Buying NEAR Tokens on LBank
Purchasing NEAR tokens in the crypto market is a fairly straightforward process. Here's how to buy NEAR tokens on the LBank platform:
1. After logging into your LBank account, navigate to the [Trading] page.
2. In the trading pair list, locate [BTC/USDT] or another pairing that supports trading with NEAR. Then, search for "NEAR" in the search bar, which will display all available NEAR trading pairs. Let's assume you choose the NEAR/USDT pair.
3. Click into the NEAR/USDT [Spot] trading area, where you can buy and sell NEAR tokens in real-time. Under the Buy section, enter the quantity or amount of NEAR you plan to purchase. Depending on your trading strategy, select an order type, such as [Market Order] if you want to buy at the current market price.
4. Upon completing these steps, click the "Buy" button to execute your order. Once the transaction is successful, the purchased NEAR tokens will automatically be credited to your LBank Spot Wallet, ready for viewing, transferring, or further trading.
With these simple steps, beginners can easily buy NEAR tokens on LBank. Of course, always make sure to double-check prices and quantities and be aware of market volatility risks when trading.
Conclusion
In conclusion, the NEAR Protocol stands out with its advanced sharding technology, eco-friendly Proof-of-Stake mechanism, and innovative design, offering prominent advantages and forward-thinking solutions to blockchain scalability challenges. By incorporating Shadow Shards, Rainbow Bridge, and Aurora, among other key technologies, NEAR not only furnishes developers with a low-barrier-to-entry and efficient environment but also fosters cross-chain interoperability and integration with the Ethereum ecosystem.
Looking ahead, as the NEAR ecosystem continues to expand and optimize, it is poised to play a crucial role in shaping a more open, fair, and sustainable digital economy. Furthermore, the ease of acquiring and holding NEAR tokens enables broader participation, allowing users to contribute to the advancement and application of blockchain technology in the Web3.0 era.