If you are interested in the world of Web3, the potential of developing or using decentralized applications (dApps) appeals to you, or you are simply looking for answers to questions such as “What is Near?” and “What is the Near Protocol?”, you have come to the right place. NEAR is a user-friendly, high-performance platform designed to overcome the fundamental challenges faced by blockchain technology. Let's dive into the depths of this exciting project together.
Definition and Origin of NEAR
So, what is NEAR, and what sets it apart from others? The NEAR Protocol is, in its simplest terms, a Layer-1 (Layer-1) blockchain platform that enables developers to create dapps. The term “Layer-1” means that NEAR has its own independent blockchain, meaning it is not dependent on other networks or protocols built on top of it. Like Ethereum, NEAR functions as a base layer that can execute smart contracts and thus host a wide range of decentralized application types. However, there are, of course, fundamental differences between NEAR and Ethereum. Before diving into the technical details, we can take a look at the differences between the two largest smart contract platforms in the table below.
Feature | Ethereum | NEAR Protocol |
Consensus | Proof of Stake | Sharded Proof of Stake (Nightshade) |
TPS | ~15–30 | ~100,000 (with sharding) |
Block Time | ~12 seconds | ~1 second |
Transaction Fee | High | Low (~0.01 NEAR) |
Smart Contract | Solidity | Rust & AssemblyScript |
EVM Compatibility | Direct EVM | EVM-compatible via Aurora |
NEAR's primary goal is to make blockchain technology accessible to a much wider audience. While decentralized systems provide transparency and efficiency in many industries, existing blockchains often face challenges such as scalability, high transaction fees, and complex user interfaces. The NEAR Protocol aims to remove the barriers to the widespread adoption of blockchain technology by addressing these issues with a user-friendly and scalable approach.
There are two critical components that form the technical foundation of NEAR: the Proof-of-Stake (PoS) consensus mechanism and the Nightshade sharding technology, which enables high scalability. The Proof-of-Stake (PoS) consensus mechanism requires validators to stake a certain amount of NEAR tokens to ensure network security. This method is much more energy-efficient than energy-intensive systems such as Proof-of-Work (PoW) and encourages network participants to maintain the security and stability of the network.
Nightshade sharding technology is at the heart of NEAR's scalability strategy. Sharding is the technique of dividing a blockchain network into smaller pieces (shards), each of which can process a portion of the transactions in parallel. This enables the network to process thousands of transactions per second (TPS), solves the congestion issues faced by many existing blockchains, and provides a foundation for applications that can handle high transaction volumes. Nightshade's unique approach divides both the state and processing into shards. Updates like Nightshade 2.0 introduce stateless validation, eliminating the need for validators to store the state of all shards locally and enhancing scalability.
NEAR's core vision is to provide a Web3 infrastructure that is as easy to use as Web2. Supporting familiar programming languages (such as JavaScript and Rust) for developers, providing comprehensive SDKs (Software Development Kits) and tools, simplifies the dApp creation process. For users, the ability to use human-readable account names instead of complex alphanumeric addresses makes the blockchain experience more intuitive and user-friendly. These features are critical to the widespread adoption of blockchain technology.
The story of the NEAR Protocol begins in 2018 when it was founded. The project, founded by Illia Polosukhin and Alexander Skidanov, initially started as an artificial intelligence (AI) initiative that pioneered program synthesis. However, upon realizing that existing blockchains were insufficient as payment systems, they decided to build their own blockchain. This decision marked the birth of a vision to create scalable decentralized applications that would offer developers an easy path forward. The project's mainnet launch in 2020 was a significant step toward realizing this vision. Following the mainnet launch, it became fully community-operated in September 2020 and passed a vote enabling token transfers in October 2020. We can examine the protocol's timeline in more detail in the next section.
NEAR's History: Key Milestones
NEAR coin's history is filled with important milestones that show how its vision was gradually realized. The launch process for NEAR began in 2017 with the establishment of Near.ai. The mainnet launch took place in 2020, with the founders spending three years preparing for it. Following the mainnet's activation, the project experienced a surge in growth. The timeline of events is as follows:
- 2017: The Beginning with Near.AI - It all started when Illia Polosukhin and Alexander Skidanov founded NEAR.ai to research program synthesis under the slogan “Singularity is NEAR!” They tried to pay workers through Ethereum but quickly realized that this platform was not suitable for this task.
- 2018: Development of the NEAR Protocol Begins - Seeing the limitations of existing blockchains, the founders decided to build their own blockchain, the NEAR Protocol. This marked the beginning of their vision to provide developers with the ability to create easily scalable dApps. The NEAR Foundation was also established in 2019 as a non-profit organization to support the growth of NEAR's ecosystem and protocol development.
- 2020: Mainnet Launch - In April 2020, the NEAR mainnet went live, and by September 2020, it was fully community-operated. In October 2020, a vote was held to enable token transfers, which passed. This was a critical moment as NEAR began operating as an independent blockchain.
- 2021: Achieved Ethereum Compatibility with Near Rainbow Bridge - Interoperability between blockchain ecosystems is critical to the future of Web3. NEAR introduced Rainbow Bridge to address this need. This bridge enables seamless transfer of ERC-20 assets between the Ethereum and NEAR networks. Rainbow Bridge creates a seamless bridge between ecosystems by enabling the movement of assets and data between different blockchains. NEAR describes Rainbow Bridge as “trustless” and “permissionless,” meaning it operates without the need for intermediaries or permissions. As a result, not only ETH but also popular tokens built on the Ethereum protocol, such as USDT, DAI, WBTC, and WETH, can interact with the NEAR network.
- 2022: Aurora (EVM-Compatible Layer) Integration - NEAR's second major step toward Ethereum compatibility was Aurora. Aurora is an Ethereum Virtual Machine (EVM) compatibility layer built on top of the NEAR Protocol. This allows Ethereum developers to run their existing Solidity smart contracts on NEAR's scalable infrastructure. Thanks to Aurora, developers can migrate their Ethereum projects to NEAR with lower fees and faster transactions, or use familiar Ethereum tools while benefiting from NEAR's advantages. This integration strengthened NEAR's position in the Web3 ecosystem, enabling it to appeal to the Ethereum community while growing its own ecosystem. In 2022, NEAR raised a total of $500 million in two funding rounds to further support its ecosystem.
- 2023–2024: Blockchain Operating System (BOS) Vision Unveiled - The latest and perhaps most ambitious step in NEAR's evolution was its positioning as a Blockchain Operating System (BOS). Announced in March 2023, BOS is the industry's first example of a common layer for browsing and discovering Open Web experiences, compatible with any blockchain. So, what is NEAR BOS? BOS aims to make NEAR the entry point to the Open Web for both users and developers. It makes accessing and navigating Web3 and Web2 easier than ever before. NEAR.org was the first step toward this vision as a unified frontend for Web3. It gives users the ability to explore all the possibilities of Web3 in a single seamless experience, while also empowering developers to create interfaces and edit code in a single environment. It allows everyone in the Open Web ecosystem to create their own frontends (such as their own versions of near.org), which can be compatible with any blockchain of their choice. BOS provides a one-time, seamless onboarding experience, eliminating friction points such as creating separate accounts for each experience. The Nightshade 2.0 launch (August 2024) supports progress toward the BOS vision by introducing stateless verification and greater scalability. NEAR demonstrated this growth by reaching over 20 million monthly active users and a total of over 110 million accounts in July 2024.
Why is NEAR valuable?
There are many features that make the NEAR Protocol valuable and unique.
High Performance and Scalability with Nightshade Technology
One of NEAR's most notable features is its ability to process thousands of transactions per second (TPS) using Nightshade technology. The Nightshade sharding mechanism enables parallel processing by dividing the network's workload into parts. This ensures that the network remains fast and efficient even during periods of high demand. Sources note that NEAR has the potential to reach up to 100,000 TPS, while also mentioning that the current transaction speed averages 1.3 seconds. The Nightshade 2.0 update further enhanced performance with state-less validation and added capacity for more shards (with a target of 10 shards by the end of 2024). This enables NEAR to support millions of users and high-volume dApps. This high Near TPS value (transactions per second) is a key factor that sets it apart from other Layer-1 blockchains.
Developer-Friendly Environment and Tools
NEAR places great importance on the developer experience. It simplifies the dApp development process by offering developer-friendly tools (Rust, AssemblyScript, etc.). It provides SDKs, comprehensive documentation, and support for popular programming languages such as JavaScript and Rust. Additionally, it offers incentives such as the opportunity for developers to earn a portion of the gas fees from their smart contracts. Thanks to Aurora, EVM compatibility enables Ethereum developers to easily transition to NEAR. These factors position NEAR as an innovative web3 development platform. Online development environments like NEAR Studio also streamline the development process.
User-Centricity and Easy Access
Another key value of NEAR is its focus on user experience. The wallet experience is simple and user-centric. Using simple named addresses (e.g., username.near) instead of traditional, complex blockchain addresses makes transactions much more intuitive. Easy sign-up methods like creating an account with an email or Telegram also simplify user onboarding. The extremely low transaction fees (often less than a penny) and fast transaction speeds make NEAR highly appealing for daily use. The BOS vision also supports this user-centric approach, offering a single entry point to Web3 and easy exploration.
Cross-Chain Interoperability
NEAR prioritizes interaction with other blockchain networks rather than operating as an isolated ecosystem. Integration with multichain structures (Ethereum, Cosmos, Polkadot) enables assets and data from different networks to flow into NEAR and out to other networks. Rainbow Bridge is a key component that enables seamless transfers between Ethereum and NEAR. Aurora EVM enables Ethereum smart contracts to run on NEAR. Projects like Octopus Network facilitate interaction between Substrate-based application chains and NEAR, as well as other IBC (Inter-Blockchain Communication)-enabled chains (such as Cosmos and Polkadot). NEAR also expands its compatibility by adding cross-chain signing capabilities with other chains such as Solana, TON, Stellar, Sui, and Aptos through solutions like Chain Signatures.
Environmental Sustainability
NEAR also stands out for its environmental friendliness. Thanks to its PoS consensus mechanism, energy consumption is much lower than PoW systems. NEAR is carbon-neutral certified. Official statements indicate that the energy consumed by NEAR in a year is equivalent to the energy consumed by Bitcoin in just 3 minutes.
Proven Security and Stability
NEAR has proven its reliability with 100% uptime and over 3 billion transactions processed in four years. It places great importance on security and stability, conducts regular audits, and follows best practices in smart contract design. The Nightshade PoS mechanism applies a “slashing” feature (partial stake reduction) to deter malicious behavior.
NEAR's Function and Ecosystem
The NEAR token's features are central to the platform's operation. It is used for staking, paying transaction fees, and governance. Users utilize NEAR tokens to pay transaction fees and deploy smart contracts. Token holders can stake their tokens or delegate them to validators to secure the network, earning rewards in return. The NEAR token is also used to vote on governance decisions related to the platform's future. The token supply is 1.22 billion, and a 5% annual inflation rate is applied to encourage network participation. However, a portion of transaction fees is burned, introducing a deflationary element into the token economy.
The NEAR token is trading at $2.37 as of May 2025. The cryptocurrency is well below its all-time high of $20.42, reached on January 17, 2023. However, it has recovered by 300% from its historic low of $0.5 in November 2020.
As mentioned earlier, this token serves as a utility token, fulfilling several critical functions. Transaction fees, staking, governance, and storage are some of these functions.
As we mentioned earlier, this token serves many critical functions as a utility token. Transaction fees, staking, governance, and storage are some of these functions. So, what is NEAR staking and how does it work? Staking is an integral part of the NEAR Protocol ecosystem and allows users to earn rewards while supporting the security and operations of the network. Staking involves locking NEAR tokens with validators. Validators process and verify transactions on the network. Stakers earn rewards proportional to their contributions.
Some of the prominent projects in the NEAR ecosystem include:
- Ref Finance: One of the most popular DeFi applications on NEAR, offering various DeFi products such as DEX, yield farming, and lending.
- Burrow: A decentralized liquidity protocol based on the NEAR Protocol, enabling users to borrow and lend assets.
- Aurora: An EVM layer on NEAR that provides Ethereum compatibility and enables Ethereum-based dApps to migrate to NEAR.
- Mintbase: A platform for creating and selling NFTs, enabling creators to mint NFTs without technical expertise.
- Paras: An NFT marketplace focused on digital collectibles and art.
- Octopus Network: A NEAR-based cross-chain network that supports the launch and operation of application chains (appchains) and provides interoperability with other chains via IBC.
These projects contribute to the continuous growth and expansion of the ecosystem by leveraging NEAR's scalable, user-friendly, and developer-focused infrastructure.
Who is the Founder of NEAR?
So, who is the founder of Near Protocol? NEAR Protocol was founded and developed by a visionary team. The project was founded by Illia Polosukhin and Alexander Skidanov, who laid the foundation for the project. Erik Trautman is also recognized as one of the first founders. Illia Polosukhin and Alexander Skidanov both stand out as individuals with extensive experience in software development and engineering:
- Illia Polosukhin: Over 10 years of industry experience. Former Google engineer who spent three years at Google, where he became a leading expert in TensorFlow (Google's machine learning framework). He also led the team that built question-answering capabilities for the core Google search. His background in artificial intelligence and scalable systems significantly influenced NEAR's architecture. He also founded Sid Venture Partners, a Ukraine-based venture fund.
- Alexander Skidanov: He began his career at Microsoft in 2009, then joined MemSQL (now SingleStore) as an Engineer in 2011. At MemSQL, he was responsible for building many core features, including storage, sharding, and durability. His expertise in distributed systems and database management played a key role in the development of NEAR's sharding technology. Skidanov also won a gold medal at the ICPC (International Collegiate Programming Contest) in 2008 and a bronze medal in 2005. He also worked as a research engineer consultant at OpenAI.
Frequently Asked Questions (FAQ)
Below, you can find some of the most frequently asked questions about NEAR and their answers:
- What is the NEAR Protocol and how does it work?: The NEAR Protocol is a Layer 1 blockchain designed to develop decentralized applications (dApps) with a focus on scalability, usability, and environmental friendliness. It aims to be an entry point for the Open Web, making it easier for users and developers to access and navigate Web3 and Web2. NEAR's operation is based on various technological solutions, including Nightshade Sharding, Proof-of-Stake consensus, Rainbow Bridge, and Aurora.
- What can be done with NEAR tokens? NEAR tokens are the native cryptocurrency of the NEAR ecosystem and play an important role in the platform's operation. So, what is Near coin used for? NEAR tokens can be used to pay transaction fees, stake and earn rewards, distribute smart contracts, participate in governance, and transfer and interact with assets.
- What sets NEAR apart from other blockchains?: NEAR distinguishes itself from other blockchains based on several factors. First, NEAR is known for its ability to manage high transaction volumes and scalability more effectively thanks to its Nightshade sharding mechanism. Additionally, its low transaction fees are a critical factor. Its developer-friendly environment, carbon-neutral certification, interoperability with other networks, and fast transaction speed also set NEAR apart from other blockchains.
- How to use the NEAR Wallet: NEAR Wallet (wallet.near.org) has discontinued new wallet creation and management functions as of 2023. However, assets remain secure for existing users, and it is possible to transfer your accounts to a new wallet. There are many wallet applications that support NEAR. For example, MyNearWallet, NEAR Mobile, and Meteor Wallet are recommended by the Near Foundation.
- Which programming languages does NEAR support? NEAR supports the creation and development of smart contracts in Rust and JavaScript, as well as the use of developer tools (SDKs). Additionally, Aurora EVM enables existing Solidity smart contracts to run on the NEAR blockchain for developers.
- Is the NEAR network secure? According to the project's own statement, NEAR was designed to be secure. What ensures its security? Near's PoS consensus, slashing, Nightshade Sharding, and validator selection systems are said to contribute to the network's security.
