About NEAR Protocol (NEAR)

The best-known foundational (“layer-1”) blockchains are Bitcoin and Ethereum. Scalability issues have famously dogged each network, spawning several competing, next-generation layer-1 protocols.

Near Protocol is one of them.

At its heart, Near is community-run cloud computing, in decentralized fashion, via a smart-contract-enabled software platform run by a Proof-of-Stake (PoS) consensus mechanism.

Note that PoS is viewed as more energy efficient versus the Proof-of-Work (PoW) approach associated with BTC.

A decentralized developer’s one-stop hub, Near is striving toward one overriding objective: to provide faster transactions relative to Ethereum, according to Messari.

NEAR is the protocol's native token. It is the means by which users – contributors of a distributed network of computers (nodes) running Near Protocol (software) – pay transaction fees, as well as for storage and to run applications. Validators, staking their tokens on the network, receive incentives for securing the chain i.e. making sure transactions are accurate.

"Sharding," a wonky-sounding database-partitioning concept, is integral to how the protocol intends to scale up. Sharding is a way of divvying up the transaction workload; sections, or “chunks,” of the chain (as opposed to the entire chain) get assigned to a network of more nimble nodes. Near has dubbed its sharding solution, still a work in progress, "Nightshade."

Nightshade is heralded as being able to maintain a single chain of data while reducing required computing activity to smaller pieces that are disbursed among nodes tasked with processing the data and adding it to the chain, incrementally. Nightshade, Near says, is designed so that participating nodes need only concern themselves with maintaining smaller sections of the chain, processing 100,000 transactions per second (TPS), versus Ethereum’s TPS rate of 15.

According to its white paper, Near combines some of the characteristics of a decentralized database with a server-less computing platform. It is cloud infrastructure for deploying decentralized applications. By way of contrast, Amazon Web Services (AWS), one of the most popular cloud solutions for app deployment, singlehandedly controls all the data stored there. And an entity like AWS sticks out as, in the parlance of cybersecurity, a single point of failure.

“Anything run on or stored within them is completely at the mercy of those companies,” Near said in its white paper. “Data can easily be lost, censored, altered, sold or hacked.”

The protocol by design incentivizes developers to build decentralized applications (dApps).

At the heart of Near is the Rainbow Bridge, a dApp that allows participants to swap Ethereum tokens, creating a bridge between ETH and NEAR.

Noteworthy in terms of the interoperability ("cross-chain bridge") narrative at play here – and what has Web 3.0 innovators and their backers so excited – is Aurora, a layer-2 scaling solution built on Near. Using Ethereum’s coding technology, called the Ethereum Virtual Machine (EVM), Aurora allows developers who create Ethereum-based dApps to also seamlessly launch them on Near.

During the start of January 2022, Near enjoyed a deluge of attention connected with the project's growth. Milestones came in bursts.

One of the dApp integrations announced, per Decrypt, was Synapse Protocol, a crypto exchange and cross-chain bridge, which became available on the Aurora EVM, giving developers options to do more, more quickly and at less cost (versus if they were solely limited to developing on clogged, expensive Ethereum).

The Near blockchain, created and developed by the Near Foundation, saw its mainnet go live in April 2020.

Six months later, token transfers were unlocked via a network validator vote.

The Rainbow Bridge (to Ethereum) was launched in March 2021.

Near's founders are Alex Skidanov, formerly director of engineering at the database company MemSQL, and Illia Polosukhin who previously worked at Google, according to CoinDesk, noting how the pair hooked up through the famous San Francisco-based Y Combinator start-up accelerator.

NEAR has raised hundreds of millions over multiple rounds from leading venture capital firms more than a little intrigued over the so-called Web 3.0, or the internet of the future: decentralized, privacy-centric, empowering and all-encompassing. It’s a concept to which NEAR is hitching its wagon.

Last year, the Near project partnered with Cardano-based stablecoin hub Ardana on an infrastructure build; and Near also allocated $800 million for new decentralized finance (DeFi) initiatives.

Now comes news that Near has raised $150 million in seed investments to accelerate the adoption of Web 3.0 technologies, potentially developing regional hubs and generally raising awareness for decentralized technology. The round was led by Three Arrows Capital, with additional participation from a slew of other funds, including MetaWeb.VC, Near’s ecosystem fund (Cointelegraph).