NEAR Protocol Explained!

4 min readJun 30, 2022


The NEAR Protocol is a layer-1 blockchain aiming to motivate a computer network to run a platform that allows programmers to design and distribute decentralized apps.

Founded by Alex Skidanov and Illia Polosukhin, NEAR functions similarly to other centralized data storage platforms like Amazon Web Services (AWS), which act as the foundation upon which applications are constructed. However, NEAR is run and maintained by a distributed network of computers rather than a single entity.

In the same way that AWS enables developers to deploy code in the cloud without setting up their infrastructure, NEAR Protocol lets developers deploy code via a network of computers and its native cryptocurrency, the NEAR token.

A key component to the design of the NEAR Protocol is the idea of sharding, which tries to divide the network’s infrastructure into several segments so that computers, also known as nodes, only have to handle a portion of the network’s transactions.

What exactly is sharding?

Sharding is a database partitioning technique used by blockchain companies to boost scalability. An organization’s entire blockchain network can be sharded into smaller fragments called “shards,” each of which contains its data and is unique.

Sharding divides a blockchain network into separate ones can reduce latency and slowness. However, there are some security concerns surrounding sharding in which shards can be attacked.

Sharding is anticipated to produce a more practical approach to obtaining network data and growing the platform by distributing portions of the blockchain rather than the entire blockchain across network participants.

The NEAR Protocol Technology

Nightshade: The crypto world has had a rising scalability issue as dApps have become increasingly popular. In this situation, scalability is the ability of a blockchain to process a large volume of transactions at a fair cost and speed.

Implementing sharding is the NEAR Protocol’s suggested response to this scalability issue.

Before delving into what sharding entails, it’s helpful to know that blockchain nodes serve three primary purposes: process transactions, send validated transactions and finished blocks to other nodes, and preserve the current state and network history. These jobs put increasing strain on the nodes due to network congestion.

Sharding is a blockchain architecture that allows each participating node in the blockchain only to store a small subset of the platform’s data. The network is divided or partitioned into shards (or fragments) in sharding, which reduces the computational load. In this way, nodes are not required to run all of the network’s code — just the code relevant to their shard — so they can run a computation in parallel with one another, thereby scaling the network’s capacity as the number of nodes in the network increases.

To achieve consensus among the nodes in the network, NEAR uses its sharding solution, ‘Nightshade.’

Using Nightshade, NEAR Protocol can maintain a single data chain while dividing the computing necessary to do so into “chunks.” Nodes handle these chunks, processing the data and adding it to the main chain. Because participating nodes are only tasked with maintaining smaller portions of the chain, Nightshade’s architecture allows for fewer possible points of failure regarding security.

Rainbow Bridge: The Rainbow Bridge is a NEAR protocol component that lets users quickly send and receive Ethereum tokens between Ethereum and NEAR.

A user would first place tokens in an Ethereum smart contract before moving them from Ethereum to the NEAR Protocol. These coins are then locked, and on NEAR’s platform, new tokens would be issued to represent the original tokens.

The process can be reversed when the user wants to get their original tokens back because the smart contract keeps the initial money in storage.

Aurora is a Layer 2 scaling solution built on NEAR Protocol intended for developers to launch their Ethereum decentralized applications on NEAR’s network. It is made using Ethereum’s coding technology, the Ethereum Virtual Machine (EVM), and a cross-chain bridge that enables developers to link their Ethereum smart contracts and assets seamlessly. The Aurora protocol allows developers to take advantage of NEAR’s low fees and high throughput while having Ethereum’s familiarity and applications network.

Why NEAR Protocol?

Users find the NEAR Protocol appealing based on its sharding technology, which allows for greater transaction capacity and security than other platforms.

Further, developers want to use its platform to build more efficient applications that may experience a high volume of activity. Ethereum developers looking to build bridges their application to NEAR may also find its Layer 2 solutions attractive.

NEAR Protocol aims to pull ahead in the crowded race to provide the infrastructure for Web 3.0 and has sought to distinguish itself through its unique developer and user-friendly features.

(written by Catherine S Thomas)

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