What is NEAR Protocol?

NEAR Protocol is a proof-of-stake (POS) blockchain with smart contract capabilities and advanced scaling solutions for dApps. 

While Ethereum is yet to release its ETH 2.0, which aims to solve its most pressing problems, including slow throughput and high gas fees, dozens of blockchain platforms are rushing in to bring these solutions first. NEAR has become one of the hottest layer-1 blockchains, offering a different way to scale a decentralized ecosystem of dapps.

Background 

NEAR, which was named after a fictional novel called “The Singularity is Near,” was spearheaded by Illia Polosukhin and Alexander Skidanov in early 2017 as a machine learning project. 

The project then evolved as a blockchain platform that delivers fast, cheap, scalable, efficient, easy-to-use, and green decentralized solutions for the masses.  

What is NEAR Protocol? 

NEAR Protocol is a proof-of-stake (POS) blockchain with smart contract capabilities and advanced scaling solutions built for decentralized applications or dApps. 

It is a base-layer blockchain like Ethereum and Cardano, which means it serves as a foundation where applications can be built and deployed. 

Its mainnet was launched last 2020 and currently offers a scaling solution called “Nightshade” and a consensus engine called “Doomslug.” 

The platform aims to solve the problems that dApps are currently facing which include low speeds, unreliable cross-compatibility, and low throughput. 

Ultra-Fast and Cheap 

NEAR can execute around 100,000 transactions per second (tps) and near-instant transaction finality.  

Another impressive thing about the platform’s capability is that it can bring down the cost of transaction fees of up to 10,000 times compared to Ethereum.

Easy To Use 

Even with its advanced technology, NEAR is also designed for non-blockchain natives to help them tap the benefits of decentralization even with the lack of prior experience on blockchain technology. 

The platform’s “common sense onboarding” allows regular users to use decentralized apps built on top of it with a registration flow they’re already familiar with. 

This capability brings a great balancing act as it allows developers to reach both blockchain and non-blockchain natives without causing any friction. The platform also provides a ready set of modular components, including token contracts, faucets, and guest books, to help developers launch their projects as early as possible. 

How Does NEAR Protocol Work? 

NEAR utilizes its scaling technology called “Nightshade” to execute high-level throughput performance, which separates it from other platforms. Its validators operate coordinately across various sharded chains to increase the performance of the platform’s transaction carrying capability. 

The platform’s advanced process is beneficial for developers because it is highly simplified and provides them with a state-of-the-art tool to create powerful applications. Another great thing about the NEAR protocol is its contract-based account model, which allows developers to create applications that can sign transactions on behalf of app users. This capability eliminates the need for users to be physically present to confirm a transaction. 

Doomslug

Doomslug is NEAR’s consensus mechanism that increases the platform’s overall performance. It can create blocks with finality within seconds by allowing validators to take turns creating blocks instead of pitting them against each other through their stakes. 

NEAR Grants Program 

NEAR Grants Program, which is operated by the NEAR Foundation, is a program that supports viable projects that can help grow and strengthen the NEAR ecosystem. 

The platform currently supports projects such as ‘Paras,’ an NFT marketplace that focuses on high-quality artworks, ‘Flux,’ a decentralized open market protocol, and Mintbase, a platform for cheap NFTs. 

NEAR Collective 

NEAR Collective is the community behind the protocol and is responsible for its development, ecosystem improvement, and continuous updates and fixes. The Collective is composed of developers and researchers who created the primary code for the NEAR Protocol. 

NEAR’s code is open-source, which means that anyone who wants to contribute to the platform’s further development can join the Collective. 

NEAR Token 

$NEAR is the platform’s native utility token created to provide incentives on token holders and facilitate transactions on its own smart contracts. 

Token holders can also join in the on-chain governance or have validators cast their vote on their behalf. 

Apart from these things, holders can also participate in the discussions regarding NEAR offerings and ecosystem, which are held on the platform’s dedicated governance forum. Platform users may also submit their suggestions on how to improve the NEAR ecosystem to the NEAR Enhancement Proposal repository on Github. 

Acquiring NEAR Tokens 

The NEAR token is needed to access decentralized applications built on the protocol’s network, and there are various options to acquire this token. It can be acquired by joining in development bounties, staking, and even from operating a NEAR community. But the easiest way to acquire it is by purchasing them on supported crypto exchanges, including Binance, OKEx, or HuobiGlobal. 

Buying NEAR Tokens with Tether on Binance 

Step 1: Create an account on Binance and supply it with Tether coins or any other assets supported by the crypto exchange. It currently supports Bitcoin, Binance USD, Binance Coin, and Tether Coin when converting NEAR tokens. 

Step 2: Go to the NEAR trading market on the Binance spot exchange. 

Step 3: On the bottom part of the page, click ‘Market,’ which can be found on the order panel. 

Step 4: Enter the desired amount of Tether and click the ‘Buy NEAR’ button. After this, the tokens will be deposited on the Binance account, which can now be traded or withdrawn. 

Staking NEAR

Staking NEAR tokens helps the entire network maintain its security, and stakers are rewarded with 5% or more in annual income for their staked assets. 

Steps in Staking 

Step 1

Click the “Staking” button. Users may choose a validator in their NEAR wallet when staking their tokens. 

These validators will generate income returns on users’ behalf, and most will charge a fee for this service, but it will be subtracted from the gained rewards and not on the staked assets. 

Step 2 

Click “Select Validator.” Users can check the complete and official list of NEAR validators at this link. After deciding on a preferred validator, click “Stake” next to their name, and enter the token amount to be staked. 

Step 3 

After the staking process has been fulfilled, users will be transferred back to the Dashboard. The Dashboard will now show the summary of their staking positions, unstaked tokens, unclaimed rewards, and assets that can be withdrawn. 

They can also view the validators managing their staked assets and the amount they handle. 

Unstaking NEAR Tokens 

To unstake NEAR tokens from a specific validator, go to the “Current Validators” section, search for that validator and click “Unstake.”

The unstaking process will take 48-72 hours, and while this is ongoing, the tokens being unstaked will be temporarily unavailable. Once the process is done, the tokens will appear on the “Ready to Withdraw” section of the Dashboard. 

To finally withdraw the assets, click the validator’s name again, and select the “Withdraw” button to regain the tokens from the validator’s account. 

Rainbow Bridge 

Rainbow Bridge is an Ethereum-to-NEAR bridge that provides users a convenient solution to connect their Ethereum ERC-20 tokens to the NEAR platform. 

This service is in line with the protocol’s goal of expanding the platform’s compatibility to make it accessible to more people. 

NEAR Wallet 

The NEAR Wallet is a web-based, and non-custodial wallet specifically made for the NEAR blockchain. Head on to this link to create an account. 

Steps In Setting Up a NEAR Wallet 

Step 1 Create a Name For The Account 

Every account created in the NEAR Wallet will be attached with the word “.near”. In other words, it will be included in all wallet usernames. (Example: Chloe.near) 

Step 2: Choose a Preferred Recovery Method 

Since the NEAR wallet is a non-custodial wallet, the developers have no access to it, and the responsibility for the account access lies entirely on users. 

Here are the 3 recovery methods that the platform provides: 

Ledger Hardware Wallet 

Ledger Nano S or X are highly recommended devices when storing private keys because they are the most secure key storage wallets in the market today. 

Recovery or Seed Phrase 

The wallet can also randomly generate twelve words which would serve as its password or “seed words.” 

Users must remember that the seed words’ security depends on where they would store it, and if their storage device is insecure, then these words can be potentially accessed by anyone. 

If a highly secured storage device is unavailable, it is recommended to write the seed words on a piece of paper and store them in a secured place. 

Step 3: Fund the NEAR Wallet 

After creating an account and choosing the desired recovery method, it’s now time to fund the NEAR wallet. 

The minimum fund needed by the wallet is 0.1 NEAR, and it can be funded by simply using a wallet account name. 

Users who don’t want to provide an email address or create a second account may transfer their tokens to a 64 character account temporary ID. 

While funds are being processed, wallet owners will see “Awaiting Deposit” as their current account status. 

Users can click the “Claim my Account” button once the funds are ready, which will also give them the green light to finally use their accounts. Also, once the button is clicked, they will be transferred to the Wallet Page that will show their current account details. 

Managing a NEAR Wallet 

In the wallet’s Account Page, users will see a complete breakdown of their account balance and the available recovery options. Owners can also access options such as adding a Ledger hardware or using a Two Factor Authentication. 

Users who are not using a Ledger wallet are recommended to use a Two Factor Authentication, which comes in the form of SMS or email, for added account protection. 

The Two Factor Authentication will execute a multi-signature contract in the user’s account and will require all transactions to be authenticated by another device. 

Users need to top up their accounts with additional tokens when using this feature to cover its storage fees. 

Conclusion 

NEAR offers features that directly answer Ethereum’s current limitations that prevent users’ ability to tap the full benefits of blockchain technology. But with Ethereum’s upcoming Consensus layer update, it is yet to see if the project can maintain its momentum and continue to expand its user base, given the size of its incoming competitor.