The Near protocol is a decentralized platform based on the Near blockchain. The Near is a public, sharded, scalable, blockchain network based on a proof-of-stake (POS) algorithm. Developers can use this platform to launch their decentralized applications (the same as the Ethereum network). The native token of this network is called NEAR, which is the utility token of this network. In this article, we will provide you with useful information about the Near protocol, its purpose and features, the use of this network, the NEAR token, transaction fees, how to buy and sell this token, the development team, and the token staking of this network.
What is the Near protocol?
Currently, it is extremely difficult for users to use a blockchain-based application or game. Hence, the Near network focuses on the usability and user-friendliness of its platform so developers, programmers, and users will feel better and more comfortable using applications launched on the Near blockchain. The idea of a Near network is quite similar to that of Ethereum and is a platform for launching decentralized applications.
Before further introducing this network, the purpose of the Near network can be stated as follows:
The Near network is similar to the Ethereum network. The only difference is that this platform tries to offer higher usability, scalability and user-friendliness while being completely a decentralized network.
Usually, a significant number of projects and applications that are developed on blockchain networks remain limited to research projects and never become fully operational. The success of decentralized protocols depends on the community of developers who launch their projects on these protocols. Take DeFi projects as an example; almost all of those projects have been launched on the Ethereum network. Uniswap, Ave, Compound, and many more are decentralized applications built on top of the Ethereum network. The Near Network claims that a team of expert developers and programmers from around the world work on the network.
This protocol provides a platform for programmers to freely submit their applications. With such programs, we will have a better world in which people’s property, including money, personal information, etc., is entirely under their control.
What is the purpose of creating the Near platform?
The network aims to build the infrastructure to create a new type of Internet. In the new Internet, it will be more difficult for large companies to access people’s personal information. Moreover, censorship will be nearly impossible and countries’ authorities cannot ban certain programs and destroy their business. A free world in which everyone can act freely. Of course, this goal is not a new concept specific to the Near network. In fact, Satoshi Nakamoto was pursuing the same goal by introducing Bitcoin in 2008, but Bitcoin has created this freedom only in the financial field.
Ethereum and many other projects, including Near, seek to extend this freedom to other aspects of human life. So far we have seen that the Near network is a platform for decentralized applications, exactly what Ethereum does. But the question is, what is the difference between the Near network and other blockchain networks that can persuade people to use the Near protocol to create their own decentralized applications instead of other networks?
Near Network Features
Suppose you use router application A for navigation while driving. Another company called B also offers its own routing application. You ask yourself if there is routing application A, what are the advantages of application B over A that encourages people to use it? In the case of the Near network, the same question arises: what is the reason for developers to use the Near network instead of the Ethereum network? In this section, we will address this issue.
The Near network documents say:
The Ethereum network is a slow and expensive protocol. Developers face limited speed while using this network, and the cost of transactions in this network is also relatively high, which will prevent innovations.
The reason Ethereum seeks to launch the Ethereum 2.0 network is to speed up transactions and reduce network costs, while the Near network has solved this problem by using sharding so the transaction speed is high and the transaction cost is low.
Ethereum launched in 2014. As mentioned earlier, the main problem with Ethereum is its low speed (14 transactions per second on average) and high transaction costs. To solve the scalability problem, Ethereum and Bitcoin used second layer technologies to make their network more scalable, but this solution did not gain enough acceptance and the market practically abandoned the idea. Therefore, the scalability problem remained an issue in the cryptocurrency field. Many new networks were launched to solve the problem of scalability between 2018 and 2019 (for example, the EOS network). Those new networks solved the scalability problem, but this came at the cost of network centralization. These networks execute thousands of transactions per second, but they can no longer be called decentralized networks. So the scalability problem was practically solved, but the network became centralized.
This problem led to the arrival of the next generation of blockchain networks. The Near protocol also falls into this category. This platform uses sharding technology to solve the scalability problem. In this model, a transaction no longer needs to be checked by all network nodes. Using the sharding technology, the network is transformed into several parallel networks that simultaneously process transactions, so that each transaction is processed on just a single shard. As a result, only nodes on one shard will verify the transaction, and other nodes on other network shards will not verify the transaction. This idea will significantly increase the capacity of the network (Ethereum 2.0 will use the same technology in the future).
The sharing technology has been used by other protocols as well, so the Near was not the first network to employ this technology. Many networks that use Sharding technology require relatively complex hardware to run their nodes. Therefore, fewer people are able to set up nodes in these networks, but the Near protocol uses the host’s cloud space to run the nodes.
Another feature of the Near network is the user-friendliness and easiness of using DApps for developers and end-users on the Near network. Using common programming languages is one of the network’s solutions to achieve this feature.
What are the applications of the Near network?
The use of shading technology has made this network scalable and has created a platform for DApps. But what products can be created using this network?
- Cryptocurrencies: Using this network, you can create a functional token and a new cryptocurrency.
- Private blockchain: Many large companies use a private blockchain network to manage their database. The nodes of this blockchain network are not public and are selected by the company itself. Developers can create such blockchain networks using the Near network. This network also uses sharing technology.
- Decentralized applications: The main product of this network is DApps. Decentralized applications in different fields can be created on top of this network.
The Near network development team
Alexander Skidanov and Illia Polosukhin are the founders of the network. Skidanov started his career at Microsoft in 2009 and worked for the company for 5 years. Polosukhin has also worked for Google for 10 years. The team of this network consists of many developers from all around the world.
The NEAR token
The native cryptocurrency of the Near network is the NEAR token. To create a decentralized network, people need monetary incentives to work as nodes in the network, and the NEAR token plays such a role in the Near blockchain. Any transaction made on the Near network requires a fee, and this fee is paid as NEAR tokens. The Near protocol uses the proof-of-stake (PoS) algorithm, and individuals must purchase and stake the NEAR tokens to participate in the network.
According to the Near protocol, 5% of new NEAR tokens are generated and released each year, and 90% of this amount will be donated to Near network nodes. The remaining 10% will be deposited in the Near network fund and will be used for the future development of the network.
Token distribution program
In the first phase, 1,000,000 NEAR tokens were generated for supply. This amount is locked and will be distributed over a 5-year plan. In addition to this program, new tokens will be generated and offered during these 5 year according to the predetermined program. Finally, the total number of NEAR tokens is 1,250,000,000. However, the amount of token that is burned must be reduced from this amount. The Near token’s circulating supply in the 5-year period is as follows:
At the time of publishing, the Near token’s price in the market is $4.61 and approximately 285 million NEAR tokens have been supplied. The token has a total market value of $1.3 billion and ranks 55th in the cryptocurrency market.
A transaction fee in Near protocol
The transaction fee in the Near blockchain network is divided into two parts:
30% of the transaction fee goes to the smart contract or DApp’s owner and the remaining 70% is burned by the protocol. This rule means that as the use of the Near protocol increases, more tokens will be burned and go out of circulation supply. This will reduce network inflation and increase the value of the NEAR token.
Trading NEAR tokens
This token can be traded in many major exchanges in the cryptocurrency market. Half of the daily transactions of this token are done in the Binance exchange, and in this exchange, the Near can be traded in NEARUSDT, NEARBTC, NEARBNB, and NEARBUSD markets.
Staking NEAR tokens
As mentioned earlier, this blockchain network uses the PoS method for the network consensus. Therefore, you can stake the NEAR token in the network and receive a profit in return. By staking or sharing the NEAR cryptocurrency, you will become a validator node in the network.
The Near network distributes bonuses to validator nodes approximately every 12 hours. The network automatically selects nodes to confirm transactions based on the amount of staked NEAR tokens. The higher the amount of staked tokens, the greater the chance of receiving a reward. The same as all PoS networks, you can place your assets in a staking pool to increase the chances of receiving rewards. The dividend on this platform depends on the amount of tokens stake in this network. Annually, 4.5% of new tokens are produced, all of which are donated to nodes.
Currently, the annual staking profit of the Near network is 11.5%. This is the amount when you participate in staking pools. If you personally run nodes in this network, the annual profit will be 12.21%. However, these percentages are not fixed rates and can change.
To stake the NEAR cryptocurrency, you can use the official wallet of this network called NEAR Wallet. This wallet is provided by the Near protocol team and provides high security.
In this article, we reviewed the Near blockchain network its token. This network uses sharding technology to increase network capacity and also uses the PoS method for the consensus algorithm. The network provides a platform for creating DApps and supports common programming languages. The NEAR token is the utility token in the Near protocol, and by staking it on the network, you will become a validator node and receive extraction bonuses.