DEVELOPMENT
Let’s cover the NEAR blockchain: what kind of network it is, what are the results for 2022, and development plans for 2023.
About NEAR
What is NEAR
NEAR is an L1 blockchain that uses Nightshade, a unique segmentation technology, to achieve scalability. It was launched in 2020 as a decentralized cloud infrastructure to host decentralized applications (DApps).
NEAR offers interconnectivity through Rainbow Bridge and the L2 Aurora solution. Users can transfer ERC-20 tokens and assets from Ethereum to NEAR, giving them access to higher bandwidth and lower transaction fees.
Aurora is an L2 blockchain, the Ethereum Virtual Machine (EVM) created by the core developers of the NEAR protocol. It operates as a smart contract on NEAR, providing benefits such as Rainbow Bridge connectivity, high bandwidth and low transaction fees in ETH. Aurora is available via different bridges including Allbridge, Axelar, Rainbow Bridge and others.
Details on all projects can be viewed here.
Top projects in NEAR by number of accounts: Sweat Economy, PlayEmber, Ref Finance.
The top projects in Aurora by number of accounts: Aurora, Ref Finance, Stader.Near.
Current NEAR blockchain metrics:
- 700+ projects (including those under construction)
- 125 DAOS
- 550,000 participants
- 4k+ developers
- 865 nodes
- 20 million wallets
- 250 million transactions in 2022
Current TVL NEAR+Aurora is equal to about $160 million
Current TVL NEAR is equal to $85 million
TVL peaked at $500 million in May 2022.
The main Defi project is Ref Finance.
Aurora’s current TVL is $72 million.
TVL peaked at $1.3 billion in May 2022.
The main Defi project is Bastion.
How much was invested
According to known information, about $533 million were invested in NEAR.
Current capitalization is $2.15 billion.
Total capitalization is $2.5 billion.
There are 85% of the tokens in circulation.
The current price of NEAR is $2.51. The price has fallen 88% from the highs.
What is the NEAR token
The NEAR blockchain has its own asset for its ecosystem – the NEAR token.
The NEAR token is the primary asset of the NEAR ecosystem, and its functionality is available to all accounts. Each token is a unique digital asset that can be used for:
- Paying for transaction processing and data storage.
- Launch a validation node (by participating in the stacking process).
- Participate in voting.
The NEAR token provides economic coordination of all the participants that run the network, as well as providing new behavior for applications built on that network.
NEAR development activity
Among the largest ecosystems (Polkadot, Ethereum, Cosmos, Aptos, Chia), NEAR is holding steady with Chia, ranking fourth for the past year.
At the same time, the level of development holds about the same level.
Development activity – shows the project’s development activity over time based on a number of purely development-related “events” in the project’s publicly accessible Github repository. (does not take into account: release comments, forks, stars, etc.).
How NEAR works. Functionality
NEAR aims to compete with other platforms with its segmentation/sharding solution called “Nightshade”.
Let’s take a look at the functionality NEAR provides.
Nightshade
Segmentation/Sharding is a concept from the world of relational databases. It allows a database to scale horizontally by dividing and distributing data among multiple servers. The Nightshade algorithm of the NEAR blockchain allows the number of transactions that the NEAR network can process per second to scale infinitely. This feature sets it apart from coins such as Bitcoin and Ethereum. Because scalability is built into the L1 network, it does not require the various add-ons and hacks that networks like Ethereum do to improve performance. It also makes it very affordable to create an application on the network.
It is a blockchain architecture that allows each participating node in the blockchain to store only a small subset of the platform’s data. Segmentation allows the blockchain to scale more efficiently while providing more transactions per second and lower transaction fees.
Nightshade allows the NEAR protocol to maintain a single data chain while allocating the computing power required to serve that data into “segments/shards.” These segments are handled by nodes that process the data and add information to the main chain.
One of the major advantages of Nightshade is that its architecture allows for fewer potential points of failure when it comes to security, since the participating nodes are only responsible for servicing small portions of the chain.
Unlike many other blockchains, each validator in the NEAR network owns only a portion of the entire blockchain.
This means that each validator can process transactions in parallel, making the entire network more robust and faster. By significantly reducing the cost of hardware, the NEAR protocol blockchain can be scaled even further.
The obvious advantage is that transaction fees are very low, allowing developers to create huge projects without the cost issues associated with the Ethereum network.
Doomslug Consensus
One of the biggest problems with highly distributed networked systems is reaching consensus among all the nodes in the network. The NEAR Doomslug consensus achieves completeness in just one round of communication. Even in the worst case, it provides twice the latency improvement over Tendermint (Cosmos), allowing the network to spend more time processing transactions than reaching consensus.
Rainbow Bridge
Rainbow Bridge allows participants to easily move Ethereum tokens between Ethereum and NEAR (+Aurora) and back.
To move tokens from Ethereum to the NEAR protocol, a user must first put tokens into an Ethereum smart contract. These tokens are then locked, and new tokens representing the source will be created on the NEAR platform.
Since the initials are stored in the vault through a smart contract, the process can be undone when the user wants their initial tokens.
The bridge architecture has been successfully battle-tested twice in 2022, in May and August. In both cases, an attacker sent false information to a lightweight NEAR client on Ethereum. Automated watchdog scripts detected the malicious transaction and provided evidence of fraud, stopping the attack. In the case of the August test, the watchdog scripts caught it in 31 seconds. Not only were the bridge funds unaffected, but the attackers lost their deposits of 2.5 and 5 ETH, respectively, needed to become a relay.
About $100 million was transferred across the Rainbow Bridge in the fourth quarter of 2022, down 34% from the previous quarter and 80% year over year. A total of $3 billion was transferred across the bridge.
L2 Aurora
Aurora is an L2 scaling solution built on the NEAR protocol, designed for developers to run their decentralized Ethereum applications on the NEAR network.
Aurora is built using Ethereum coding technology, an Ethereum virtual machine (EVM), and a crosschain bridge that allows developers to seamlessly link their Ethereum smart contracts and assets.
Developers can use Aurora to take advantage of the low-commission, high-bandwidth NEAR protocol with the familiar Ethereum application network.
NEAR SDK
NEAR supports Rust and AssemblyScript (JavaScript with types) for writing smart contracts. To give developers a great experience, NEAR has a complete SDK that includes standard data structures, examples, and testing tools for these two languages.
Features of NEAR
The NEAR blockchain has its own features and they are worth talking about.
Readable credentials, fast and simple
The NEAR protocol can generate a readable account address. This capability makes the platform user-friendly for everyone, including people with little technical knowledge of blockchain and the NEAR ecosystem.
NEAR account identifiers are readable and look better than addresses in other blockchains, where the address is represented as a public key hash. In NEAR, users can register named accounts (e.g., francisco.near), which are easier to use and remember. In addition, named accounts can create their own child accounts, helping to better organize linked accounts.
Transaction speeds and gas fees
NEAR says it will be able to support 100,000 TPS *.
* TPS (Transactions per second) is the number of transactions a network can process each second. The faster the network, the better it can handle congestion. This results in higher payment efficiency and therefore a higher chance of acceptance, institutional or individual.
Visa processes an average of about 1,700 transactions per second, claiming to be able to support 24,000 transactions per second.
Mastercard processes an average of about 5,000 transactions per second.
The transactions themselves are very fast on the blockchain ~1 second.
Transaction fee is only $0.10, hundreds of times less than Ethereum.
Compatibility with EVMs
NEAR has developed L2 Aurora, an EVM that allows Ethereum-based projects to easily migrate dApps from Ethereum to NEAR.
Resilience
The NEAR protocol offers an efficient PoS network designed to ensure network resilience and ensure high performance of various dApps and blockchain solutions.
Compatibility
Components such as EVM and Rainbow Bridge/Aurora help the NEAR protocol provide interoperability between different independent blockchains, increasing the usability of use cases built on its ecosystem.
Segmentation and overall security (analogous to Polkadot)
NEAR differs in that it is as developer-friendly as possible and offers scalability through segmentation and overall security as Polkadot does.
The benefits of segmentation:
- Validators don’t need to load the entire state of the blockchain, which reduces hardware requirements for nodes.
- Makes it easier to create lightweight clients and, ultimately, makes it easier to develop mobile clients.
Anstaking Period
NEAR has an anchoring period of 24-36 hours compared to Cosmos (up to 3 weeks) and Polkadot (up to 4 weeks).
Inflation
NEAR has an annual inflation rate of 5%, which can become deflationary due to the fee burn mechanism depending on increased usage.
Developer Convenience
NEAR is developer-friendly because of:
- Running with WASM, a standard that works in most browsers,
- Contracts can be created in Rust or a variant of JavaScript,
- Development of a one-click deployment environment,
- Transaction fees have become smoother, allowing developers to subsidize user fees.
Carbon Neutral Blockchain
NEAR is certified as carbon-neutral. NEAR currently generates a carbon footprint of 174 tons of CO2 per year. Thus, the NEAR protocol is more than 200,000 times more carbon efficient than Bitcoin, mainly by using PoS instead of PoW.
The bottom line for 2022
Here’s everything that happened to NEAR in 2022 and why NEAR is set for big growth in 2023!
Phase 1 of Nightshade Segmentation
The implementation of segmentation (Nightshade) is divided into four phases.
Phase 0 divided the network into four data segments and required validators to store and validate transactions in all four segments.
Phase 1 introduced a new role: fragment-only producers who validate only one segment, increasing the network’s validator capabilities and decentralization.
The network now has two validator roles:
- Block producers – check transactions in all segments, up to a maximum of 100.
- Fragment only producers – validate transactions on one segment, up to a maximum of 200.
Phase 1 tripled the throughput of the network validator. This was achieved by introducing fragment-only producers, up to a maximum of 200, in addition to the existing 100 block producers.
At the same time, even 300 validators is not decentralization. For example, Chia has 125 thousand nodes.
JavaScript SDK
NEAR has unveiled a brand new JavaScript SDK , allowing developers to use NEAR using the world’s most popular programming language. Brendan Eich, inventor of JavaScript and co-founder of the privacy-focused Brave browser, joined NEARCON to discuss the new SDK, new Brave support for Aurora, and why he’s excited about NEAR.
Metatransactions
NEAR also introduced metatransactions, allowing third parties to pay for any account’s transactions. Users can then be connected to NEAR applications without NEAR tokens. The development of metatransactions will continue next year and will be critical to the growth of the ecosystem.
Major advances in funding and transparency
A thriving NEAR ecosystem requires resources and trust, both of which have made significant strides. Transparency Reports have emerged that provide important information about the state of the protocol and ecosystem, including rate allocations, daily transactions and newly created accounts.
Ecosystem Growth
2022 was a year of growth and innovation for NEAR. New partnerships, such as Sweatcoin and SailGP, were important stepping stones toward Web3’s proliferation.
Projects in areas such as games, music, and NFT demonstrated that the NEAR ecosystem is thriving and ready for new heights in 2023.
The NEAR protocol has shown a 15-fold increase in aggregate accounts over the past year, with more than 22 million accounts to date. NEAR also has 900,000 active wallets per month, up significantly from last year. And in 2022, the NEAR ecosystem raised $330 million in external capital for NEAR-based projects.
The economics of movement
One of the biggest catalysts for the creation of NEAR’s new wallet and account was a partnership with Sweatcoin . The $SWEAT token rewards users for every step they take throughout the day, encouraging users to lead healthy lifestyles. Sweatcoin’s migration to NEAR increased the total number of wallets from 2 million at the beginning of the year to more than 20 million by November.
Blockchain Music
The year 2022 saw a surge of interest in music and Web3. And one of the most innovative projects in this area was in the NEAR ecosystem with the launch of Endlesss . NEAR’s integration with the music creation, marketing and community development platform was launched over the summer as a virtual gathering place combining social media features with music production tools. Endlesss allows musicians of all skill levels to hold “jam sessions” on the NEAR blockchain and mint their music as NFTs.
Games
Armored Kingdom, created by Hollywood star Mila Kunis, will be an immersive game, NFT, narrative and meta universe built on the NEAR blockchain. The project began with a first edition NFT comic book giveaway at Consensus. NEAR also announced the opening of a regional hub in South Korea with a focus on introducing NEAR blockchain to the massive local game developer community.
PlayEmber has also established itself as a key player in the NEAR gaming ecosystem, taking a mobile approach to Web3 games and attracting advertisers to the space. PlayEmber’s games currently have more than 4.2 million monthly active users, and Shima Capital recently raised $2.3 million in pre-game fees .
NFT
One of NEAR’s largest NFT projects, Mintbase, received more than $12 million in funding in August 2022. Mintbase gives niche creators the ability to mint any type of NFT with little technical know-how, demonstrating NEAR’s commitment to making Web3 easy for everyone.
DAO innovation
Another huge addition to the NEAR ecosystem is the world-renowned rowing league SailGP. SailGP is partnering with NEAR to pioneer the intersection of sports, Web3 and decentralized autonomous organizations (DAOs). In addition to offering fan-owned NFT collection items on the NEAR blockchain, SailGP will use AstroDAO tools to create the first fan-owned team as a DAO.
Plans for 2023-2024
Since Mainnet launched in late 2020, the NEAR ecosystem has made great progress, becoming one of the top-tier blockchains with 22 million accounts, 600,000 active wallets per month (2+ transactions are considered active) and 15x growth in users and projects.
Last year, despite market chaos and a major downturn in recent months, the NEAR Foundation has enough capital to sustain at least five years of operations in a bear market thanks to responsible treasury management.
The NEAR Foundation believes that NEAR is the only ecosystem in which the promise of Web3 can be realized and where mass adoption can occur.
The roadmap covers major efforts to improve the scalability and decentralization of the protocol.
Phase 2 and 3 blockchain segmentation
The next step of the deployment is Phase 2 segmentation, which will completely separate state and processing, further reducing hardware requirements for segment validators, making the network more accessible to validators. Phase 2 is expected to begin in 2023. This upgrade will increase the capacity of the network from 4 to 100 segments, with the validators not tracking all segments.
Phase 3 segmentation will involve dynamic redistribution – the network will be dynamically divided into segments, and then the segments will be combined based on resource usage. This will allow NEAR to expand almost indefinitely. Phase 3 is expected to begin in 2023-2024.
Blockchain operating system
Since the NEAR protocol, infrastructure, and developer tools are already well established, the next step in providing the best user experience in Web3 is the discovery layer: the connective fabric that connects applications, tools, social networks, earning components, and developers in the public domain. This stack is called the “blockchain operating system.”
Many of the building blocks of the blockchain operating system already exist in NEAR in the form of features or applications. These include NEAR Crowd, a GIG-economy platform* on which 50% of users make transactions every day, and NEAR Social, an online social network with a widget infrastructure that allows developers to branch out entire app interfaces to create new features.
* The GIG economy is a piecework, part-time or freelance economy. Companies benefit from hiring employees for one-time projects, and a person doesn’t have to sit in an office all day, but gets paid for the amount of work done.
Much more
Many interesting new features are on the way. Here’s a brief description of some of the roadmap items:
- Zero-balance accounts. Will allow zero-balance accounts so that apps and wallets can easily create accounts for new users.
- Secp256r1 keys. Support for the secp256r1 key will allow iPhone users to have an implicit account on the network. This reduces adaptation friction to an even lower threshold than existing Web2 approaches. The iPhone user doesn’t have to go through the process of creating an account through some kind of wallet.
- Global storage. In the current paradigm, if a frequently used smart account is deployed multiple times, the same amount of storage cost must be paid each time it is deployed. For example, each account that deploys a contract with multiple signatures today must pay ~3N for the storage cost, even if the contract is the same for all those accounts and does not consume more physical storage at the implementation level. Global storage solves the problem by allowing developers to burn tokens to deploy the contract once, and then each account can use it without having to pay for storage.
- Running wasm in wasm. Today, smart contracts deployed in Aurora are in sync with each other. The same can be done for native NEAR contracts if dynamic loading and execution of another smart contract is allowed as part of the smart contract execution.
DAO Development
NEAR, through grants, will invest in its own expansion, primarily through the 3 main DAO communities: developer DAOs , marketing DAOs and creative DAOs.
This means that the NEAR Foundation will no longer directly allocate capital to projects, instead supporting the community in making these decisions and continuing to decentralize key elements of the ecosystem.
In the new year, the NEAR Foundation will create an early-stage gas pedal that will support promising NEAR projects and founders in areas such as education, technology, hiring, legal, UX, and GTM guidance, allowing them to grow into the iconic Web3 projects of tomorrow.
Combined with upcoming registration enhancements, including from EVM wallets (called remote accounts), native metatransactions, and new chat/social media capabilities, NEAR will provide even more value directly to developers and users.
All of these user-centric elements, especially at the app level, will form the basis for a major component of the product and technical focus of the NEAR ecosystem in 2023.
NEAR and other key ecosystem players will work together to deliver the best possible technology with an increasingly integrated and seamless interface for developers and end users. From there, the goal is to turn NEAR into more than just a Tier 1 blockchain: it will become a global blockchain operating system. It’s still early days, but construction is well underway, and the vision is clear.
Conclusion
Over the year 2022, blockchain NEAR has tried to keep a constant level of development, roughly on par with Chia.
NEAR strives to create the most user and developer-friendly ecosystem possible.
Users are being offered the full suite of cheap and fast transactions, simple addresses, instead of public key hashes. In 2023, Iphone owners will be able to use NEAR as easily as possible, without having to create a separate wallet. A focus on simplicity and mass.
Developers are offered a toolkit that allows for “one-click” app deployment wherever possible. They also lowered the entry barrier as much as possible by offering a Javascript SDK.
Segmentation/sharding technologies, with overall security in mind (like Polkadot) suggest that this is a very balanced blockchain.
This is reflected in the highest $500+ million investment.
Ease of use, balanced technical solutions, unlimited blockchain scalability, very large investment, collaborative developments with Apple – this is a good bid for the first blockchain with mass use!
