What is NEAR?
NEAR Protocol (NEAR) is a highly scalable and developer-friendly layer-one sharded decentralized application platform. Drawing from the original vision of Ethereum, the NEAR team defines the protocol as a blockchain-based community cloud, that combines computations and storage in a trustless way.
The technical design is focused on creating a quality user and developer experience that is familiar. The NEAR team hopes this will lead to increased end-user adoption of applications built on NEAR. NEAR has its own native NEAR tokens which are used to pay for transaction fees and storage on the NEAR platform.
Current state of NEAR
In 2021, NEAR laid the foundation for serious ecosystem growth in 2022. NEAR currently runs 100 validators and 4 shards which already achieve high TPS (transactions per second) and 2022 will bring NEAR even closer to its goal of 100k TPS. Rainbow bridge, Aurora network, and Octopus network have all launched on NEAR and allow great interoperability between NEAR and other protocols, furthering the goal of a multichain web3.
NEAR’s market capitalization grew from $300m in January 2021 to over $9bn in January 2022 (30x). While that didn’t keep pace with other networks like Avalanche or Solana it is impressive growth nonetheless and puts NEAR on track for further strong growth.
In January 2022, NEAR announced a $150m fundraise which brings the total funding of NEAR to over $200m since its inception. The funds will be used for ecosystem funding, building out NEAR regional hubs, raising awareness of the NEAR brand and the projects building on it and bringing it to new audiences.
The NEAR Ecosystem
October 2021 saw NEAR announce $800m in funding initiatives aimed at supporting ecosystem growth. The main focus will be on DeFi (decentralized finance) projects while other areas like NFTs (non-fungible tokens), DAOs (decentralized autonomous organizations) and games too will receive grants. Some of the funds will be allocated to regional hubs to help foster ecosystem development there too.
Popular Projects Building on NEAR
Flux Protocol (Flux)
Flux is a decentralized cross-chain oracle provider that aggregates off-chain data verified through a network of validators. The goal of Flux is to remove centralized oracle solutions from the web3 economy so that decentralized apps (dApps) are no longer exposed to vulnerabilities stemming from centralized data services. Flux launched in 2021 through a LBP (Liquidity Bootstrapping Pool) and is making use of NEAR’s powerful capabilities to bring its decentralized oracle to the web3 industry. Read this article for more information on Flux.
Mintbase is an NFT (non fungible token) platform that lets anyone create and sell digital assets without needing a technical background. Users/Artists can create NFTs to create digital art or music. Event managers can use NFTs to sell tickets to their events. Mintbase considers itself the “Shopify for NFTs” where people create photography, music, memberships, art, and more. Mintbase focuses on making NFTs as easily accessible as possible. A big part of that is building on NEAR protocol, focusing on user experience and its cost advantages over platforms like Ethereum.
Machina is the first sharded PoS (proof of stake) storage solution that’s built on NEAR. The team decided to build on NEAR for its ease of writing code and deploying contracts. Machina also received a grant from NEAR Foundation out of the giant NEAR ecosystem fund mentioned above.
Machina is designed to utilize NEARs’ Nightshade sharding capabilities to provide scalable, instantly retrievable, and affordable storage solutions. The data that can be stored scales up proportionally with the number of validators joining the Network. Machina’s payment model is based on stablecoins which simplifies the fee structure for both developers and users.
Aurora is a layer 2 scaling solution for Ethereum built on NEAR. Layer 2 means it is built on top of an existing blockchain protocol. Developers and users get the familiar Ethereum experience but running on NEAR. Aurora’s core is an EVM (Ethereum Virtual Machine) and an interoperable bridge between protocols.
Through Aurora developers can deploy their existing Ethereum-based solidity or vyper contracts to NEAR without having to make changes. Users on the other hand can access the applications using their Ethereum or ERC-20 tokens via their metamask wallet (or other Ethereum wallets). Applications that run on Aurora can seamlessly interact with others on NEAR. Aurora delivers this scaling solution at a very fast 1-2 second finality and with low costs of only a couple of cents.
Staking on NEAR
Figment currently runs validators on NEAR to help secure the network and is working on expanding its involvement with NEAR as we believe the protocol has great potential and characteristics. Delegators can stake NEAR tokens to Figment directly via the NEAR wallet.
Figment is exploring launching proof of stake farming validators on NEAR to help spearhead this new concept. With stake farming, validators like Figment can partner with projects building on NEAR to launch a validator which then rewards delegators in both NEAR and the project’s tokens. This novel stake farming could lead to a whole new token distribution model that focuses more on long-term involvement and security while also bringing a lot more delegators and capital into the NEAR ecosystem.
NEAR in 2022
2021 saw the development of a lot of fundamental infrastructure (Nightshade sharding, interoperability, AMMs, launchpad…) on NEAR. In 2022 further DeFi infrastructure like lending protocols, asset management and derivatives could be the next step.
Aurora brings Ethereum familiarity and makes NEAR easily accessible to Ethereum’s giant developer community. This combination of NEAR and Ethereum through Aurora will bring a great boost to the NEAR ecosystem in 2022.