What is NEAR Protocol (NEAR)?
Cryptocurrencies and blockchain technologies have become some of the hottest investments in the world. That said, it is important for speculative investors to know what they are getting into by researching each cryptocurrency token, what its purpose is, and its history (no matter how brief).
NEAR Protocol has become a notable platform within the decentralized applications (dApps) space. Though it is primarily aimed at developers, the NEAR Protocol has proven to have a plethora of uses. Read on to find out more about NEAR Protocol, NEAR Protocol price prediction, and how it works.
What is NEAR Protocol (NEAR)?
A Layer 1 blockchain, NEAR Protocol is a great platform for developers to create and launch decentralized applications of their own. These applications are capable of serving a vast array of use cases, including non-fungible tokens (NFTs), decentralized finance (DeFi), gaming, payment systems, and more.
The core of NEAR Protocol’s platform is a unique sharding mechanism. This helps NEAR achieve greater scalability while also providing cheap, fast transactions. Validators within the system are capable of processing transactions on a single section of the blockchain – a shard – instead of the network at large.
Under Layer 1 token categories, NEAR Protocol is a smart contract platform. Holders of NEAR tokens can use them to address fees for each transaction while also participating in the governance and security of the blockchain. Staking NEAR tokens can lead to even greater rewards as well.
Who are the Founders of NEAR Protocol (NEAR)?
NEAR Protocol was co-founded by Illia Polosukhin and Alexander Skidanov. Polosukhin is the Chief Executive Officer (CEO) of the Near Foundation while acting as the Chief Technical Officer (CTO) of NEAR Protocol. His background is in engineering, and he previously contributed to TensorFlow at Google. He specializes in distributed systems and data storage, helping NEAR Protocol handle the heavy burden that comes with storing so much data.
Skidanov, on the other hand, is the CEO of Near Protocol. His work at MemSQL mostly revolved around creating and developing in-memory databases. He laid groundwork in system architecture and software development thanks to prior experience in blockchain technology and distributed systems. This, in turn, is crucial for the implementation of NEAR’s unique security and scaling solutions.
What Makes NEAR Protocol Unique?
One of the things that makes NEAR Protocol unique is that it is directly aimed at the future of Web3. On its platform, NEAR is developing technology that is difficult to master but an essential part of the foreseeable future, making cross-chain protocols not just possible, but something that becomes the norm.
NEAR Protocol also has a deep array of developer tools available. More than anything else, NEAR Protocol is a place for building decentralized applications. The goal is for the platform to become the home of developers looking to create blockchain-based services and applications.
NEAR Protocol also offers a start-up accelerator, a developer sandbox, and even a grants program in order to keep the platform as a place for blockchain and Web3 developers. Near University, Near Certified Developer programs, and the Near Academy programs make it possible to leverage courses from fundamentals to advanced topics, all available to developers.
The Near Foundation is also involved in a partnership with South Pole, a leading low-carbon project developer and climate solutions provider. NEAR is attempting to measure its carbon footprint and meet a climate neutrality commitment it has laid out. The platform is looking to offset emissions through tree-planting projects while also reducing avoidable emissions.
How Many NEAR Tokens are There in Circulation?
Each cryptocurrency token has a maximum supply when it is created. How those tokens are distributed depends on the token and platform it backs. NEAR Protocol has a total maximum supply of 1.252 billion NEAR tokens possible. Its fully diluted valuation (total supply multiplied by the current market price) is roughly $3.544 billion USD.
Currently, there are more than 1.219 billion NEAR tokens in distribution. NEAR Protocol issued 1 billion tokens initially as a means of fundraising. NEAR Protocol burns all transaction fees on its network, acting as a way to deflate the current supply.
How is the NEAR Protocol Network Secured?
Security of a blockchain is critical to its success. Though blockchain technology is inherently more secure because of its decentralized nature, there must be measures in place to guarantee the security of the platform and blockchain, as a whole.
NEAR Protocol implements a proof-of-stake (PoS) concept. These are as secure as proof-of-work blockchains (think Ethereum and Bitcoin) but the major benefit is not consuming nearly as much electrical power. This promotes greater environmental responsibility while keeping transaction fees far lower as a result.
NEAR Protocol Ecosystem
The NEAR Protocol ecosystem is built largely on two major concepts: the Rainbow Bridge and the Aurora Virtual Machine. What do each of these bring to the table? Let’s break it down and see how they function within NEAR Protocol’s ecosystem.
The Rainbow Bridge
This is a bridge between NEAR Protocol and Ethereum, called the Rainbow Bridge. This allows assets to easily flow back and forth between the two blockchains. ERC-20 tokens on Ethereum will work just fine within the NEAR blockchain, allowing users to do very simple wallet-to-wallet transfers without having to go through great trouble and expense involved in converting coins.
The Rainbow Bridge has been described by NEAR as being permissionless and trustless. Information that is cryptographically provable on the NEAR blockchain is then capable of being used for Ethereum contracts and the other way around. This includes the ability to schedule calls and read the state with callbacks to the other chain.
With so many popular crypto tokens built on the Ethereum blockchain, the Rainbow Bridge becomes vital for tokens built within. It gives them the ability to interoperate with apps and blockchain protocols on NEAR.
Aurora Virtual Machine
The second part bringing together NEAR’s overall compatibility with Ethereum is Aurora. A virtual machine, Aurora is capable of executing smart contracts on the Ethereum blockchain. NEAR uses Aurora to get closer to its stated mission goal of allowing users to take control of their finances, their data, and the tools that govern them.
The core team of NEAR Protocol, known as Pagoda, created this Ethereum Virtual Machine (EVM) capable of not only creating but executing smart contracts. Aurora takes these Ethereum smart contracts and executes them on the NEAR blockchain, ensuring improved scalability, cost, security, and speed in comparison.
The unique sharding design of the NEAR Protocol blockchain is what allows it to keep fees low and speeds high. Rather than using the entire blockchain, the sharding feature means using a small piece of the blockchain instead. The Rainbow Bridge then supports any transfer of assets between blockchains.
FAQs
What can NEAR be used for?
Like many other tokens, the main uses of NEAR are within the NEAR ecosystem. Let’s take a closer look at the most relevant uses for NEAR as it stands:
Governance. Holders of NEAR tokens are able to participate in the greater governance of the platform. They do so by voting on changes, protocol upgrades, and other decisions on the platform.
Staking. Validators on the NEAR network are able to stake their tokens in order to participate in the blockchain’s consensus mechanism. As a result, they earn rewards for security the network. Users are also able to delegate their tokens to specific validators, earning them rewards without having to participate in the validation process.
Transaction fees. One of the inherent uses of NEAR tokens is to pay the gas fees on the platform. These fees are the costs that come with executing smart contract operations and transactions on its blockchain.
Network security. By staking NEAR tokens, users can help ensure the overall security of the NEAR Protocol. This is a thresholded proof-of-stake concept. It means that malicious activities from users can result in major penalties, dissuading potential fraudulent behavior.
Developer rewards. Smart contract developers are able to use NEAR tokens in order to receive a small share of transaction fees generated through their own smart contracts.
What is the highest and lowest price for NEAR Protocol (NEAR)?
As is the case with other tokens within the cryptocurrency space, NEAR has had huge rises and massive falls. For instance, the highest price all-time of NEAR is $20.44 (it currently trades at $2.83). Similarly, the all-time low – near its launch – is $0.5268 per token.
With a market cap of more than $3.44 billion USD, it is considered one of the top 50 cryptocurrencies according to Coin Gecko. Though it is down more than 86% from its all-time high, it remains more than 437% higher than its all-time low.
What is the fully diluted valuation of NEAR Protocol (NEAR)?
The fully diluted valuation of a token comes from calculating the total supply and multiplying it by the current market value of the token. The total supply of NEAR is 1.252 billion tokens, with roughly 1.219 billion currently in circulation.
Currently, NEAR is trading at about $2.83 per token. Multiplying that number by the total supply, the fully diluted valuation of NEAR is $3.544 billion USD. That number can and will shift as the market value of NEAR changes.
What is the history of NEAR Protocol?
After its founding by Alexander Skidanov and Illia Polosukhin, the NEAR Protocol mainnet officially launched on April 22, 2020. It is part of the NEAR Foundation, which is based out of Switzerland and is a non-profit organization.
Since its launch, NEAR Protocol has raised $500 million for the project. Private rounds and venture rounds brought in more than $30 million. There have since been major investments led by Tiger Global Management and Three Arrows Capital, totaling $500 million and shows that NEAR Protocol is here to stay for the foreseeable future.
What problem does NEAR Protocol solve?
There are inherent challenges to blockchain protocols, known as the blockchain trilemma. This is the challenge of balancing scalability, decentralization, and security. More traditional blockchains, those like Ethereum, has limitations with low throughput and high fees, especially as they scale up.
Through its unique sharding technology, NEAR’s network is capable of increasing its capacity with rising demand, keeping transactions cheap and fast throughout. Its emphasis on user experience has readable account names rather than unreadable cryptographic addresses.
Additionally, developers have an environment that offers familiar programming languages, a robust support community, and streamlined deployment processes. All of these things come together to provide a more practical, accessible avenue to blockchain technology while bridging the gap between decentralization and traditional web technologies.
Who are the founders of NEAR Protocol?
NEAR Protocol was initially founded by Alexander Skidanov and Illia Polosukhin. They are co-founders with Polosukhin acting as Chief Technical Officer (CTO) while Skidanov is the Chief Executive Officer (CEO).
Illia came in with a specialized knowledge of distributed systems and data storage, allowing NEAR to handle all the data it stores. Skidanov, meanwhile, also had distributed systems knowledge but also a background in blockchain technology, helping NEAR execute its unique security and scaling solutions.
