Publication date: September 25, 2024

What is Near Protocol?

Near Protocol is an emerging crypto project focused on improving the scalability, usability, and accessibility of blockchain technology for developers and users alike. The platform is designed with a strong focus on simplicity and speed, aiming to make developing and using decentralized applications (dApps) as easy as possible. The platform's native token, Near, is used for a variety of purposes within the network, such as paying transaction fees and rewarding network participants.

What distinguishes Near Protocol from many other crypto projects is its innovative approach to technical problems that other networks struggle with, such as slow transactions or high fees. The platform uses sharding, a technique that allows transactions to be processed more efficiently by spreading the load across different nodes. This makes Near scalable and suitable for broader applications, making it particularly attractive to both small and large developers.

How does Near Protocol work?

NEAR Protocol has a unique consensus mechanism called "Nightshade," which helps the network process transactions quickly and efficiently. Unlike traditional networks, where each node must process a full copy of the blockchain, NEAR uses sharding. Sharding distributes the load of transactions across different "shards," so that each node does not have to maintain the entire database. This significantly increases transaction speed without sacrificing network security or decentralization.

In addition, NEAR Protocol is focused on providing a user-friendly development environment. Developers can easily build dApps using the NEAR Software Development Kit (SDK), which provides support for popular programming languages such as JavaScript and Rust. This lowers the barrier to entry for developers and allows them to easily work on complex applications without worrying about technical barriers. NEAR also offers a unique feature called "progressive security," which allows users to gradually add more security to their accounts the more they use the application.

History of Near Protocol

NEAR Protocol was founded in 2018 by Illia Polosukhin and Alexander Skidanov. Both founders had strong technical backgrounds. Polosukhin previously worked as a machine learning expert at Google, while Skidanov gained software development experience at Microsoft and MemSQL. Their shared vision was to create a platform that combined scalability, usability, and accessibility. This resulted in the creation of NEAR Protocol, a project focused on solving common problems in the world of cryptocurrency.

In 2020, NEAR reached an important milestone with the launch of its mainnet. The launch of the mainnet marked the start of a period in which the platform quickly gained popularity, with more and more developers and projects beginning to explore the NEAR ecosystem. One of the first major partnerships was with Flux, a decentralized oracle network that brought data from outside the blockchain to the NEAR network. These types of integrations helped NEAR grow its ecosystem rapidly and attract innovative applications.

During 2021 and 2022, NEAR Protocol continued to grow and collaborate with other crypto projects. One of the most notable collaborations was with Aurora, a Layer-2 scaling solution for the Ethereum network. Aurora made it possible to run Ethereum DApps on the NEAR platform without modification, giving NEAR a huge edge in terms of interoperability. Developments such as these ensured that NEAR became a major player in the world of cryptocurrency.

What's going on at Near Protocol

In recent months, NEAR Protocol has implemented several new features and updates to further improve its platform. One of the most notable updates is the introduction of "Nightshade 2.0," an improved version of the consensus mechanism that further optimizes the speed and security of the network. This update made it possible to process even more transactions per second and laid the foundation for future scalability.

Another important development at NEAR Protocol is the launch of the NEAR Grants Program. This program provides financial support to projects and developers who want to build on the NEAR platform. This not only attracts new projects but also encourages innovation within the ecosystem. This has led to the growth of the community and an increase in the number of dApps running on NEAR.

Despite the positive developments, NEAR Protocol is also facing some challenges. Competition within the crypto market is fierce, especially from major players such as Ethereum and Solana. Although NEAR has some unique technical advantages, it is difficult to compete against networks that already have a large user base and strong market position. Moreover, technical problems, such as bugs and security breaches, are frequently reported, sometimes causing delays and turmoil within the community.

Price trend of Near protocol

Near Protocol (NEAR) has experienced a striking price trend recently. In September 2024, the price of NEAR hovered around $5.26, with earlier declines to $3.41 in the same month. This recovery shows that NEAR is still a volatile but promising player in the crypto market. The token's value has risen nearly 376.59% over the past year, making it one of the best-performing cryptocurrencies during this period.

Below is the graph of Near Protocol (blue) plotted against the price of Bitcoin (red) over the past 12 months. Especially in the period October 2023 through March 2024, Near is rising dramatically: more than 600%. A good portion of that is returned in the period that follows. Near's rise over the past 12 months remains impressive.

1. High transaction speed: NEAR Protocol can process thousands of transactions per second, making the platform very attractive to developers who want to build scalable applications. This reduces waiting time for users and provides a smooth experience.

2. Interoperability with other networks: Thanks to integrations with platforms such as Aurora, developers can easily deploy applications from other networks on NEAR. This expands the platform's usability and provides greater flexibility for projects.

3. Strong community support: NEAR has a growing community of developers and investors who actively contribute to the success of the project. This provides a constant stream of new ideas and innovations that move the platform forward.

4. Lower costs: Compared to other networks such as Ethereum, transaction costs on NEAR are much lower. This makes the platform more attractive to both developers and users who face high fees on other networks.

Disadvantages of investing in Near Protocol

1. Competition from larger networks: NEAR faces strong competition from established names such as Ethereum and Solana, which have a much larger user base. This may limit NEAR's growth.

2. Relatively new technology: While NEAR offers innovative solutions, using relatively new technology such as sharding also carries risks. Problems such as bugs and security vulnerabilities can still occur.

3. Price sensitivity: The NEAR Protocol stock price can fluctuate considerably depending on market conditions and news announcements. This makes it a less stable investment for those looking for predictable returns.

4. Lower adoption: Despite strong growth, NEAR lags behind major competitors when it comes to adoption by large companies and projects. This may deter investors looking for established platforms.

Disclaimer: Investing involves risk. Our analysts are not financial advisors. Always consult an advisor when making financial decisions. The information and tips provided on this website are based on our analysts' own insights and experiences. They are therefore for educational purposes only.