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Blockchains have a lot of key features. But one of them transcended multiple barriers in one go. Like it or not, the permissionless feature of blockchains has enabled anyone with an internet connection and computer to join a global monetary network for the first time irrespective of his caste, religion, race, creed etc. Developers are racing against time to create a decentralized finance (DeFi) ecosystem that can scale to a billion users. As with any ambitious goal, the road is paved with many challenges like high cost, lower transaction speed, less environmentally friendly etc. In today’s article, we are going to briefly discuss the NEAR Protocol (NEAR) which aspires to tackle these limitations.
NEAR is a layer-1 blockchain designed to offer a high-performing and secure infrastructure to support the development of scalable decentralized applications (dApps). NEAR Protocol is innovative for it focuses on addressing the limitations of the older system through a community administrated sharded blockchain platform. The network runs on Nightshade, a (PoS) Proof-of-stake consensus mechanism that focuses on offering stable fees and scalability.
How does it work?
NEAR Protocol is a proof of stake (PoS) consensus mechanism that helps companies with sharding solutions for their scaling. We will have a brief look at the sharding solutions that NEAR Protocol provides.
Sharding is a blockchain design that allows each node to store a small subset of the platform’s data. It allows a blockchain to scale more smoothly and enables higher transaction throughput per second while reducing the transaction cost. Nightshade allows NEAR to maintain a singular chain of data. The nodes handle the computing required to maintain these data into ‘chunks.’ The nodes process the data and additional information to the main blockchain network. One of the benefits of Nightshade is that its architecture provides fewer chances of failures when it comes to security, as the participating nodes are only responsible for maintaining smaller segments of the blockchain.
NEAR Protocol has an application called the Rainbow bridge that allows the users to transfer Ethereum tokens back and forth between Ethereum and NEAR networks. To move tokens from Ethereum to NEAR, a participant must deposit Ethereum tokens in the Ethereum smart contract. These tokens are then locked on the Ethereum network, and new tokens are minted on NEAR’s network, representing the original Ethereum tokens. Since the original funds are stored through the smart contract, we can reverse this procedure if users wish to retrieve their original tokens.
Aurora is a layer 2 scaling solution built on a NEAR protocol for developers to help them launch their Ethereum decentralized applications on NEAR’s ecosystem. Aurora is built using the idea of the Ethereum Virtual Machine (EVM) that enables developers to link their Ethereum Smart contracts and assets seamlessly.
NEAR Protocol is one of the most innovative and advanced protocols available in the blockchain ecosystem. NEAR Protocol is focused on developing dApp as it uses sharding technology to achieve scalability. To help this mission, NEAR Protocol has integrated features like human-readable account names instead of cryptographic wallet addresses and made it easier for the dApp users to interact with the ecosystem.
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Disclaimer: This article was authored by Giottus Crypto Exchange as a part of a paid partnership with The News Minute. Crypto-asset or cryptocurrency investments are subject to market risks such as volatility and have no guaranteed returns. Please do your own research before investing and seek independent legal/financial advice if you are unsure about the investments.