NEAR Protocol is a decentralized platform that encourages a distributed network of computers to provide the infrastructure for developers to build and deploy decentralized applications.
The core concept behind NEAR Protocol is sharding, which involves dividing the network into multiple segments, allowing each participating computer or node to process only a portion of the network’s transactions. By distributing segments of the blockchain among network participants instead of the entire blockchain, sharding aims to improve the efficiency of data retrieval and enable the platform to scale effectively. NEAR functions similarly to centralized data storage solutions like Amazon Web Services (AWS), acting as the foundation upon which applications are developed. However, unlike AWS, which is managed by a single organization, NEAR is run and maintained by a decentralized network of computers. NEAR Protocol enables developers to deploy their applications on this decentralized infrastructure without the need to build their own, using its native cryptocurrency, the NEAR token, as an integral part of the system.
History
NEAR Protocol was founded in 2018 by Illia Polosukhin and Alexander Skidanov, both of whom brought extensive experience in software engineering and entrepreneurship. Polosukhin was a former engineering manager at Google Research, while Skidanov was the Director of Engineering at MemSQL. Their combined expertise laid a strong foundation for NEAR Protocol, aiming to create a blockchain that is both scalable and developer-friendly.
NEAR has raised more than $20 million over multiple rounds from leading venture capital firms including Andreessen Horowitz and Pantera Capital.
Approximately 35% of the initial supply of 1 billion NEAR tokens has been sold to early stage investors.
How does NEAR Protocol work?
NEAR Protocol operates as a Proof of Stake (PoS) blockchain that differentiates itself through its innovative sharding technology, termed ‘Nightshade.’
- Nightshade
Sharding in blockchain technology allows each node to store only a fragment of the platform’s data, facilitating more efficient scaling. This design enhances the blockchain’s ability to handle a higher number of transactions per second while reducing transaction costs.Nightshade enables NEAR Protocol to maintain a unified data chain while distributing the computational tasks required to sustain this chain into smaller units known as “chunks.” These chunks are processed by individual nodes, which then integrate the processed data into the main chain.
One of the significant advantages of Nightshade is its security model. By distributing responsibilities across nodes to manage smaller sections of the chain, it reduces the potential points of failure, enhancing overall network security.
- Rainbow Bridge
The Rainbow Bridge is an application within NEAR Protocol that facilitates the seamless transfer of tokens between Ethereum and NEAR. To transfer tokens from Ethereum to NEAR, a user deposits tokens into an Ethereum smart contract. These tokens are then locked, and corresponding tokens are created on the NEAR platform to represent the original ones.The original tokens are securely held in the Ethereum smart contract, allowing users to reverse the process and retrieve their original tokens whenever desired.
- Aurora
Aurora is a Layer 2 scaling solution on NEAR Protocol designed for developers to deploy their Ethereum decentralized applications (dApps) on NEAR’s network. Aurora leverages Ethereum’s coding framework, the Ethereum Virtual Machine (EVM), and incorporates a cross-chain bridge that enables seamless integration of Ethereum smart contracts and assets.Through Aurora, developers can benefit from NEAR Protocol’s low fees and high transaction throughput while maintaining compatibility with Ethereum’s extensive ecosystem and familiar development environment.
NEAR Uses
Users may find the NEAR Protocol appealing based on its sharding technology, which may allow for greater transaction capacity and security than other platforms.
Further, developers may want to use its platform to build more efficient applications that may experience a high volume of activity. Ethereum developers looking to build bridges their application to NEAR may also find its Layer 2 solutions attractive.
“Sharding in blockchain technology allows each node to store only a fragment of the platform’s data, facilitating more efficient scaling.”
Investors may wish to buy NEAR and add it to their portfolio should they believe in the future of sharding as a way to scale blockchain technology and wish to have a stake in the future development of the NEAR ecosystem.
Token Utility
The NEAR token is the native cryptocurrency of the NEAR Protocol, which is a decentralized platform for building decentralized applications (dApps) and services. The NEAR token has several use cases, including:
- Transaction fees: NEAR tokens are used to pay for transaction fees on the NEAR network. Every time a user interacts with a dApp or service on the NEAR network, they pay a small amount of NEAR tokens as a transaction fee.
- Staking: NEAR tokens can be used for staking, which involves locking up a certain amount of tokens to support the security and consensus of the network. Stakers are rewarded with additional NEAR tokens for their contributions.
- Governance: NEAR token holders can use their tokens to participate in the governance of the NEAR network. This includes voting on proposals, electing validators, and proposing changes to the protocol.
- Rewards: NEAR tokens are used to reward developers and contributors for building and maintaining dApps and services on the NEAR network.
How is NEAR Protocol Unique?
– End-User Usability: Near allows a familiar web experience for their users, removes the demand for users to learn blockchain concepts.
– Developer Usability: Near has a number of supports for developers, allowing them to learn, develop, test, and deploy their applications easily:
– Familiar Languages: Near supports contracts written in Rust and AssemblyScript. In the future, more common programming languages will be added, so developers have no need to learn an entirely new language to build applications.
– Robust Tooling: NEAR’s development suite is created to support the developer workflow with a unified set of tools so developers can easily build, test and deploy applications.
– Scalability: NEAR uses a sharding approach which allows the network to increase its capacity, throughput, and finality as additional nodes participate. This is done by dynamically splitting the network nodes into multiple shards, and of eventually, each validator will process a cer shards only. With this approach, the network can scale continuously as demand increases.
– Security: Thresholded Proof of Stake: In order to ensure validators run correctly, validators are required to stake NEAR tokens, which guarantee their results. If these results are found to be inaccurate, the stakers will lose their tokens.
Shariah Opinion
The NEAR Token can be considered Shariah compliant as there are no impermissible use cases. The NEAR protocol has genuine use cases.
Conclusion
Based on and subject to the foregoing information, and for the purposes of this conclusion, nothing has come to our attention that causes us to believe that NEAR is in breach of Shariah* principles and rulings as adopted by the scholars conducting this research.
*Attention is drawn to the term ‘Sharia’ and ‘Sharia compliant’ and its interpretation thereof as expressed in the following link https://shariyah.net/glossary/