Evolution of NEAR protocol: NEAR’s technological advancement, AI stance and popular projects

Author: Paul Veradittakit, partner at Pantera Capital; compiled by: 0xjs@Bitchain Vision

introduction

As the cryptocurrency industry continues to develop rapidly, I believe that blockchain technology will become a key driver of innovation in multiple industries.Bitcoin and Ethereum are at the forefront of this revolution, with a huge market capitalization and widespread user adoption.Bitcoin has a market capitalization of over $600 billion and is widely recognized for its pioneering role in the cryptocurrency space.Ethereum is leading the way in promoting programmable blockchains, supporting a variety of decentralized applications (dApps) and smart contracts, thus enhancing the versatility of its capabilities.

Although both platforms have a huge market share, they both face significant challenges that limit the widespread use of blockchain technology.Scalability issues hinder their ability to effectively manage large amounts of transactions, and the limited programmability of these networks hinders the development of complex applications.Furthermore, the lack of comprehensive developer engagement tools limits the growth and innovation potential of the blockchain ecosystem.

NEAR protocol

The NEAR protocol is a platform designed to address these challenges head-on and enhance blockchain technology capabilities.The NEAR protocol, which places great emphasis on scalability, the convenience of developer participation and user experience, has launched solutions that address the major obstacles facing current blockchain networks.By leveraging cutting-edge technology and strategic initiatives, I believe NEAR will reshape the landscape of decentralized finance and applications.

limit

Bitcoin’s rigidity and its energy-consuming Proof of Work (PoW) consensus mechanism makes it lack flexibility and efficiency when handling large amounts of transactions.Despite its programmability, Ethereum also faces scalability issues, resulting in high transaction fees and longer processing times.These limitations hinder the widespread adoption of blockchain technology and limit its practical application.

Industry Trends

The industry is actively exploring scalable and flexible alternatives to address these limitations.Emerging technologies such as Proof of Stake (PoS), Sharding and Layer2 solutions are designed to increase transaction throughput and reduce operating costs.NEAR protocols are implemented uniquelyThreshold Proof of Stake (TPoS) system and Nightshade shardStand out in this area, both of which significantly improve scalability and decentralization.These advances herald the entry of blockchain technology into a new era characterized by efficiency and user-friendliness.

Understand Threshold Proof of Stake and Nightshade Sharding

Threshold Proof of Stake (TPoS) is a complex consensus mechanism adopted by the NEAR protocol to enhance security and decentralization.Unlike traditional Proof of Stake (PoS) systems, TPoS systems are typically operated by a small number of large stakeholders, and by setting a minimum threshold for equity, it can promote wider and more equitable participation.Network participants or witnesses are selected through a pseudo-random process to verify transactions and protect the network.This approach mitigates the need for resource pools, reduces centralized risks, and enhances overall network security by making it harder to obtain undue impacts in any single entity.

Nightshade sharding is a scalability strategy used by the NEAR protocol to improve transaction throughput and efficiency.Sharding divides the blockchain network into smaller and easier-to-manage segments (called shards), each shard can handle transactions independently.Nightshade Sharding extends this concept by enabling these shards to run in parallel, thereby significantly improving the network’s ability to process large numbers of transactions.This design ensures that the NEAR blockchain can be dynamically scaled to meet growing demand without sacrificing speed or security.It also reduces transaction costs and latency, making NEAR an ideal platform for high-frequency trading and decentralized applications.

Progress and milestones

Achievement

Since its inception, NEAR Protocol has achieved remarkable milestones, integrating various projects and fostering a strong ecosystem conducive to decentralized application development.One of the platform’s notable achievements is the significant increase in its total lock-in value (TVL), which soared to $335 million as of the end of the last quarter, an impressive increase of 547% in six months.This rapid expansion underlines NEAR’s growing appeal and the effectiveness of its strategic initiatives.

Technology upgrade

NEAR’s commitment to technological advancement is key to its success.Deployment of Nightshade ShardingThe scalability of the network is greatly enhanced, allowing it to process more transactions with lower latency.In addition, NEAR’sChain abstractionThe vision aims to simplify blockchain interaction between users and developers, which has led to the development of features such as NEAR accounts, chain signatures, and intent repeaters.These advances not only enhance user experience, but also broaden the scope of innovative applications and consolidate NEAR’s position as a leading platform in the field of decentralized technology.

Driver

Market status

NEAR Protocol consolidates its position as a leading blockchain platform, ranking among the top in TVL and user engagement, with daily active addresses reaching 1.2 million, a 42% increase from the previous month and a 377% increase in six months.This strong growth is driven by the success of applications such as KAIKAINOW, Sweat and the newly launched HOT Wallet, which significantly expand NEAR’s user base.Since the fourth quarter of 2023, the platform’s transaction volume has increased from about 35 million to more than 220 million, monthly active users have increased from 2.9 million to 15 million, and new users have increased from 1.8 million to more than 5 million, maintaining an average of two.Retention rate of about 40% per month.

NEAR’s AI stance

The NEAR Foundation emphasizes the importance of integrating AI into the web3 ecosystem through an open and decentralized framework to ensure users have control over their data and assets.User-owned AI is an intelligent tool that is optimized for the well-being and success of individual users and their communities, rather than maximizing profits for companies that build models.They caution against developing AI in a closed, profit-oriented environment, which can lead to negative results.Instead, they advocate an open approach to foster transparency, collaboration and equitable governance.Putting power and ownership into the hands of users can bring many benefits, such as higher productivity, better search results, more personalized experiences, and new economic opportunities, all of which are privacy-first.By leveraging their expertise in AI and blockchain, NEAR aims to pioneer this crossover and maintain an accessible and equitable digital environment to prevent large tech companies from monopolizing control.

In June, the NEAR Foundation launched an incubation program to build infrastructure for user-owned AI.The first incubation teams included 6 teams: Mizu, Pond, Nevermined, Hyperbolic, Ringfence and Exhibits.The AI ​​incubation program aims to contribute to a larger vision of building a collaborative and user-owned AI ecosystem where users and developers can use advanced, secure, decentralized AI solutions, andProvide support for end users and researchers who contribute to open source.

Popular projects/integration

• Sweat WalletIt is a digital wallet designed for the Sweat Economy ecosystem, allowing users to send, receive and store a variety of digital assets.Each Sweat Wallet automatically assigns a NEAR address, enabling seamless interaction with the NEAR ecosystem and NEP-141 tokens.Integration with NEAR not only provides a powerful and secure platform for transactions, but also ensures that users can easily manage their assets without an additional wallet.

• HOTIt is a digital token on the NEAR protocol designed to be mined easily and conveniently through a Telegram-based wallet system.Users can create wallet addresses that are directly linked to their Telegram accounts, making it easier to interact and trade.The mining process of HOT tokens is very simple, allowing users to collect tokens regularly.Initially, the transaction was free and users could choose to pay for the fee in HOT tokens as they progressed.Integration with the NEAR protocol manages and mines HOT tokens provides a safe and efficient environment that attracts users who want to easily enter the crypto world without a large amount of upfront investment.

• Frax FinanceWork with NEAR Protocol to enhance the development of decentralized AI and programmable currencies in the blockchain ecosystem.The collaboration aims to leverage NEAR’s advanced chain abstraction capabilities to enable scalable and flexible application development across multiple blockchains.The program builds on Frax Finance’s success with Ethereum-based assets and aims to bring similar performance and innovation to the NEAR ecosystem.The synergy between Frax Finance and NEAR Protocol is expected to drive the future of decentralized finance (DeFi) by integrating AI and innovative financial solutions, ultimately creating a more user-centric and decentralized financial environment.

• Built based on NEAR protocolAuroraConnecting Ethereum and NEAR enhances the scalability and availability of Ethereum applications.Aurora is fully compatible with Ethereum Virtual Machines (EVMs) and can act as a Layer2 solution with low transaction fees and fast endurance.Key features include the Aurora engine for easy deployment of Ethereum smart contracts and the Aurora bridge for seamless transfer of tokens and data between Ethereum and Aurora.Utilizing NEAR’s sharding technology, Aurora ensures high performance and scalability, combining Ethereum’s ecosystem benefits with NEAR’s efficiency and low cost.

Key players and their contributions

The success of the NEAR protocol is attributed to its co-founders Illia Polosukhin and Alexander Skidanov.Polosukhin worked as an engineering manager at Google Research, co-authored the influential paper Attention Is All You Need, which introduced the Transformer architecture and led key projects such as TensorFlow.His expertise in AI is crucial to shaping NEAR’s innovative and scalable approach to blockchain technology.Skidanov served as Director of Engineering at MemSQL, with extensive experience in building scalable systems and leading engineering teams.His technical acuity is crucial to developing NEAR’s powerful infrastructure.Their shared vision and expertise push the NEAR protocol to the forefront of the blockchain industry, driving its rapid growth and innovation.

in conclusion

All in all, the NEAR protocol has made significant progress in addressing the major challenges faced by existing blockchain platforms.By innovatively focusing on scalability, user experience and developer engagement, NEAR has the ability to lead the blockchain industry into a new era of financial innovation, connecting AI and decentralized applications.Looking ahead, the NEAR protocol’s emphasis on chain abstraction and the AI ​​digital autonomy owned by users puts it at the forefront of the future blockchain ecosystem.As the platform continues to evolve and expand, it will play a key role in shaping the future of digital applications for decentralized finance and application development, expanding the influence and influence of blockchain technology in the AI ​​era.