An Introduction to NEAR Protocol

What Is NEAR?

NEAR Protocol is a layer one next-generation blockchain created by the NEAR Collective, co-founded by Alex Skidanov and Illia Polosukhin. 

The NEAR Protocol white paper described their plans for a blockchain that delivered an intuitive user-experience with greater scale capacity that would provide developers with a more accessible and sustainable business model for decentralized applications.

To achieve this mission, NEAR Protocol takes a more human-centric approach to its blockchain features. For example, it has swapped the cryptographic wallet addresses for human-readable account names. It also provides the ability for users to interact with smart contracts and dApps without having a wallet at all. 

The NEAR Token

The NEAR blockchain has its own native fungible token, also called NEAR coin. It is a token with a maximum supply of 1 billion and has three main functions:
As payment for executing smart contracts, processing transactions and storing data on the platform.

Used to run a validating node by participating in the staking process and reward validators for their computational effort.

As a governance token, NEAR can help determine how the network develops.

At the time of writing, NEAR is ranked #28 on Coin Market Cap and 1 NEAR is worth $3.07.

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What Can You Build on NEAR?

As well as hosting its own native token, the NEAR platform is home to many other unique digital assets including other tokens, stablecoins, and NFTs which can be in-game collectibles or representations of real-world assets. 

It also hosts a wide variety of applications from games to DeFi, blockchain marketplaces, crypto exchanges and more. Let’s take a look at the most popular NEAR projects. 

Mintbase: The very first NFT minting platform to be built on the NEAR Protocol. It allows users to mint NFTs at a low cost without the technological complexity of other similar platforms. 

ZomLand: This fun and interactive play-to-earn NFT card game sees users take on the role of leader for an army of zombies and monsters.

Paras 2.0: Paras 2.0 is an all-in-one social NFT marketplace where users can create, trade, and collect a wide variety of digital collectibles. 

Burrow: This non-custodial pool-based interest rates platform enables users to supply assets to earn interest, and to borrow against them to unlock liquidity.

Skyward Finance: A fully permissionless open source launchpad enabling projects to launch their tokens without any liquidity in the safest way possible.

NEAR Architecture

The NEAR blockchain has an architecture which aims to solve what is commonly referred to as the “blockchain trilemma”. The term sums up the difficulty of blockchains to be scalable, decentralized, and secure all at the same time. There is always one facet that is compromised.

NEAR’s approach to tackling the trilemma is through an architecture that implements a horizontal scaling feature called Nightshade which is a unique “sharding” solution. Let’s break down what that means. 

Sharding

Sharding lessens the computational load on nodes by splitting the network into fragments, or shards. This means that not every node is required to run the entire network code but only the code that is relevant to its particular shard. This increases the network’s scaling capacity and allows a higher transaction throughput. 

Nightshade

Nightshade allows the shards to appear as a singular chain of data while at the same time distributing the computational effort required to maintain the data into “chunks”. 

The chunks are taken care of by validator nodes which process it and add the data to the chain. This architecture means greater security as there are fewer points of failure as the participating nodes are responsible for smaller fragments of the chain.

The sharding mechanism allows the NEAR Protocol to process around 100,000 transactions per second with transaction fees costing next to nothing. 

Rainbow Bridge

NEAR Protocol allows network participants to easily transfer ERC-20 tokens between Ethereum and NEAR using a two-way bridge application known as Rainbow Bridge. It works by locking deposited Ethereum tokens in a smart contract and creating them on the NEAR platform as a representation of the original ones. The process is reversible. 

Aurora

Aurora is a Layer 2 scaling solution that combines its scalability of NEAR and Ethereum’s developer tooling. It is built on NEAR Protocol and allows the execution of Ethereum dApps on NEAR. Aurora is EVM-compatible which means developers can execute Ethereum smart contracts on the NEAR blockchain and benefit from the low fees.

NEAR Consensus Mechanism

To achieve consensus on the network, NEAR uses a Proof of Stake (PoS) mechanism. Nodes who wish to validate transactions and generate blocks must stake their NEAR tokens in order to be considered for participation. The larger the stake, the more influence they have on consensus. 

Any token holders who don’t want to validate can delegate their stake to a validator node of their choice. NEAR then uses an auction system to select validators every epoch - approximately every 12 hours. 

NEAR Node Types

There are three different types of nodes on the NEAR network— Validator Node, RPC Node, and Archival Node. 

Validator Nodes

Validator nodes are the active players in the NEAR blockchain. Some validators operate validating “chunks” — an aggregation of transactions from a shard. Other validating nodes produce blocks, which contain chunks from all the shards. You can get a real-time view of NEAR validator nodes on the NEAR Explorer.

RPC Nodes 

NEAR RPC nodes are RPC service providers. They provide public RPC endpoints for developers. NEAR encourages participants to run their own RPC node and offer RPC services through an Open Source & Public Goods Grant. 

Archival Nodes 

NEAR archival nodes store the complete blockchain data, building an archive of historical states. These nodes are particularly useful for block explorers, or any business or dApps needing chain analysis.

READ MORE: Blockchain Nodes Explained

NEAR Node Requirements

The recommended hardware requirements for engaging with the NEAR platform with a validator node are as follows:

 - CPU of x86_64 (Intel, AMD) processor with at least 8 physical cores

 - CPU Features to include CMPXCHG16B, POPCNT, SSE4.1, SSE4.2, AVX

 - RAM of 16GB DDR4

 - 1TB SSD storage (NVMe SSD is recommended. HDD will be enough for localnet only)

NEAR’s technical documents also include the cost estimation of setting up a validator node which can be between $180 - $330 plus storage depending on the operating system in use.

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To engage with the NEAR platform as an RPC node you’ll need hardware with the following specifications:  

 - CPU - 8-Core (16-Thread) Intel i7/Xeon or equivalent with AVX support 

 - CPU Features - CMPXCHG16B, POPCNT, SSE4.1, SSE4.2, AVX 

 - RAM - 16GB DDR4 

 - Storage - 1TB SSD (NVMe SSD is recommended. HDD will be enough for localnet only)

If you don’t want to stake or validate NEAR transactions, you can choose to run an archival node. To do so, NEAR recommend the following hardware specifications:  

 - CPU of at least 8-Core (16-Thread) Intel i7/Xeon or equivalent with AVX support 

 - CPU Features - CMPXCHG16B, POPCNT, SSE4.1, SSE4.2, AVX 

 - 16GB DDR4 RAM 

 - Storage of 7 Terabyte SSD 

NEAR archive nodes come at a similar cost, but the storage costs will increase as the blockchain grows. 

NEAR Nodes with Crypto APIs

The NEAR protocol may be one of the most user-friendly blockchains to build on, but it still requires powerful technology, high bandwidth, and protocol expertise. 

To remove these barriers for SMEs who may be locked out of blockchain opportunities, Crypto APIs provides reliable infrastructure and technical knowledge. Our Nodes as a Service gives easy access to NEAR data, allowing you to build robust dApps and applications integrated with the blockchain.

To find out more about our Nodes as a Service, contact the Crypto APIs team today.