NEAR Protocol: the best DPoS-based project?

The cryptocurrency industry is still in an active growth stage and is far from full adoption — currently there are still obstacles that hinder mass adoption, from a difficult user experience, the complexities of blockchain, and other things that are not easily understood by every ordinary user. For example, if someone wants to use a decentralized application based on Ethereum, they need at least a basic understanding of smart contracts and blockchain and to have enough funds (given the rapid growth of commissions in the network lately). The NEAR Protocol project, which has grabbed quite a noticeable share of the crypto market players’ attention, should solve all these problems.

What is NEAR?

NEAR is based on the Delegated Proof-of-Stake (DPoS) consensus algorithm, which is now one of the alternatives to Proof-of-Work (PoW) and Proof-of-Stake (PoS) algorithms. As of now, the platform can process over 1000 transactions per second benchmarked on a single shard for token transfers (contract ops are slower). MainNet is currently single-sharded. In 2021 the NEAR team is planning to release a sharded MainNet with 8 shards which will bring the project closer to 10,000 TPS threshold. NEAR network has 1000x times lower transaction fees when compared to Ethereum. Developers earn 30% of transaction fees, which represents a new and exciting monetization vector for them. In this context, the project has a significant advantage.

Essentially, the NEAR blockchain platform is an infrastructure layer, conceptually similar to many other similar platforms, such as the well-known Ethereum. Developers deploy decentralized applications with other operational activities on the platform, such as creating an account or executing a transaction managed by the network nodes.

How does NEAR Protocol blockchain work?

Another important component of NEAR Protocol is a mechanism called Doomslug. It allows validator nodes to take turns generating blocks. This happens every “epoch” and lasts for 12 hours. At the same time, it takes about a second to generate each new block. The block reward is provided through inflation, which is currently at about 5% per year. 90% of each block reward goes to pools of validators and delegates, and the remaining 10% goes to NEAR, which is currently managed by the NEAR Foundation.

If you are new to the blockchain and cryptocurrencies learn more about NEAR Protocol core principles here: https://near.org/blog/the-beginners-guide-to-the-near-blockchain.

NEAR Token

If you want to become a NEAR Protocol validator, you will need to stake NEAR tokens. The exact amount depends on how many tokens are contributed by other validators in the shard. All of this also determines your share of block rewards, which are paid out each epoch (12 hours).

Each shard in NEAR contains 100 seats, and you must have at least one seat to be a validator. The cost of each seat is determined by the total NEAR stake amount (for example, take the total amount in this shard and divide it by 100, that would be the cost of the seat). Validators and delegates can opt-out of staking at any time. This principle is intended to encourage validator nodes to protect new or “smaller” shards where the entry barrier is lower. If you don’t have the capital to buy enough NEAR tokens to get a seat, you can convince delegates to trust you with their tokens. Delegates use staking pools to do this and get a portion of the block reward from validators. Learn more about NEAR Protocol economics here: https://near.org/blog/near-protocol-economics.

NEAR Protocol ecosystem projects

Flux Protocol

Mintbase

The problem is that after a surge in the popularity of decentralized finance, the Ethereum blockchain has become very expensive to use. Sometimes the average fees for interacting with smart contracts reach double digits. These shortcomings forced the Mintbase team to look for an alternative platform and find NEAR Protocol.

MoonPay

MoonPay operates in more than 160 countries and is trusted by more than 250 leading wallets, websites, and apps.

Ontology

Ontology strives to provide enterprise customers with an easy way to benefit from blockchain’s decentralized and distributed nature. This includes identity management, smart contracts, decentralized data exchange, and the ability to create their own digital assets and applications that can be hosted on Ontology’s dApp platform.

TrustToken

Recently, the NEAR Protocol team started working with the creators of TUSD to integrate the stablecoin into their platform. This collaboration will allow TUSD users to transfer coins with much lower fees and confirmation time. TUSD should become a cornerstone in the development of the NEAR ecosystem, which will find wide application in NFT, blockchain games, predictive markets and so on.

Conclusion

However, NEAR Protocol is made with a more “friendly” attitude towards developers and ordinary users. In this respect, it represents a serious competitor to the second-largest cryptocurrency in terms of market capitalization. With solid financial backing, NEAR Protocol only needs to ensure that the project itself sells well enough to gain recognition in the established competition. If it can excel in that, there is a good chance to outperform the rivals. Find out more about NEAR token price predictions here: https://medium.com/near-ecosystem/near-price-predictions-5a2240f80a3c.

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