What is NEAR Protocol?
NEAR Protocol is a layer 1 blockchain for running apps and smart contracts. Its mainnet launched in 2020. It was founded by Illia Polosukhin and Alexander Skidanov, and the NEAR Foundation supports the ecosystem.
NEAR is also the name of the network's native coin, used to pay fees, to stake and to store data on the chain.
How does it work?
NEAR uses proof of stake: validators lock up NEAR tokens to help produce and confirm blocks, and other holders can delegate their tokens to a validator to share in rewards. A validator that misbehaves risks losing rewards and its place in the active set.
To handle more activity, NEAR uses sharding, a design called Nightshade. Sharding splits the network into smaller parts, called shards, that process transactions in parallel, much like adding more checkout lanes in a shop.
NEAR also focuses on ease of use. Accounts can have readable names, such as alice.near, instead of only long strings of letters and numbers. The project promotes chain abstraction, the idea that users should be able to act across several blockchains from one account without needing to know which chain they are using.
What is it used for?
NEAR is a general-purpose platform, so its uses depend on the apps built on it. Storing data on NEAR requires holding a small amount of NEAR, which is released when the data is removed.
- Paying transaction fees and storage costs on the network
- Staking to secure the network and earn rewards
- Using decentralized apps, including finance tools and AI-related projects
- Acting across other blockchains through chain abstraction tools
Key facts
- Mainnet launched: 2020
- Founders: Illia Polosukhin and Alexander Skidanov; supported by the NEAR Foundation
- Consensus: proof of stake
- Native blockchain: NEAR Protocol (layer 1, sharded)
Explainer written by Finvane from official project documentation. It is not investment advice.