Spot & Margin Trading

NEAR Protocol (NEAR)

Published on 2021-07-20 14:05

1. What is NEAR Protocol?

NEAR Protocol is a Proof of Stake (PoS) blockchain platform. What is NEAR’s main value proposition, compared to other blockchains? Well, Bitcoin and Ethereum notoriously have scaling issues: The more people who join their networks, the slower and more expensive it can be to transact on them. In addition, most existing blockchain platforms are difficult to use, creating high barriers of entry to those outside crypto.

In order to bypass the scalability problem, NEAR is built around the concept of “sharding”, using a novel mechanism called “Nightshade”. While other blockchain protocols require each node in the network to settle every transaction, the idea of Nightshade is to have transactions executed by groups of “shards” – different servers each storing only parts of the blockchain. The result is a net gain in transaction speed and capacity.

When it comes to user experience, NEAR relies on account addresses that are easy to read for humans – as opposed to the usual long strings of numbers. It’s also possible to use NEAR without having to deal immediately with the challenges crypto beginners dread, such as gas fees, storage costs and seed phrases. These aspects of the decentralized application experience only show up when users feel ready to claim their wallet and hold their own tokens.

As a smart contract platform, the protocol also supports interoperability with Ethereum and other decentralized application platforms. NEAR is also used as a base-layer to build NFT platforms. A recent example is NEAR’s partnership with the Universal Hip Hop Museum to launch a series of NFTs around 47 hip-hop legends. This is why NEAR is sometimes seen as an up-and-coming competitor to Ethereum and other blockchain projects built around smart contracts, like EOS and Polkadot.

NEAR is the native token of the NEAR Protocol. It is used to:

Pay transactions and data storage fees.

Run validator nodes on the network – this is done by staking NEAR tokens.

Take part in governance votes to determine how network resources are allocated.

2. Coin Info