# Is Near Protocol superior to others blockchains? There are many blockchain platforms, which are called L1, that want to do what Ethereum doesn’t do well: be faster and cheaper. Each has its own way of solving the problem of having to balance between security, scalability and decentralization: Cosmos is all about different chains being able to talk to each other, Avalanche is about no one bossing anyone else around, Fantom is about being able to do a lot of transactions in a short amount of time, and Solana is about making it simple to create finance applications. NEAR seeks to provide a complete solution to the problem and tries to do several things well at the same time: it is an L1 blockchain that uses a proof-of-stake (PoS) system and breaks into smaller pieces (shards) to make it easier to use and grow. Ethereum has a scalability problem, just like most L1 platforms such as Solana and Avalanche. This means it can’t handle as many transactions as it would like to and each one is more expensive for users. In addition, it takes longer to commit them, because its consensus mechanism needs each node to verify each transaction. To get around this problem, NEAR created NightShade, which improves on the classic blockchain sharding system by splitting each block instead of the main chain. Thus, instead of the entire network going through each node, it is split among all participating nodes and done in parallel. NEAR is currently improving its sharding thanks to a partnership with Octopus Network. Octopus allows developers to create use-case specific chains, which are called app chains, that are compatible and connect to NEAR through an Octopus bridge that functions as a smart contract. In addition, NEAR introduce dynamic re-sharding in 2022, the final phase of NightShade, which will make the network and shards adjust to increased user demand. The speed of NEAR transactions also benefits from NEAR’s block production algorithm, called DoomSlug, which allows it to reach finality much faster and with fewer validators than other L1 chains that typically use Byzantine Fault Tolerant Consensus (BFT) algorithms. Even to ensure security and communication within the network, NEAR used a new approach to randomization, which is designed to allow unpredictability and fairness until at least 2/3 of the malicious actors. With scalability and security resolved, NEAR’s path to decentralization becomes much easier to achieve. ## Usability For most L1 platforms, the goal is to make their platforms and chains developer-friendly, but most rely on the Ethereum Virtual Machine (EVM) and Ethereum’s smart contract language, Solidity, to ensure compatibility with Ethereum and harmonize smart contracts. This is where NEAR differs from other L1s. Unlike other L1s, such as Avalanche, which used Solidity to facilitate compatibility with Ethereum, NEAR shifted the focus by going developer-first and supporting WebAssembly (WASM). This means developers can pass traditional Web2 applications or write their new dApps and smart contracts in languages such as Java, C, C++ and Rust. In addition to a practical developer-first mentality, NEAR also focused on user experience by moving away from the standard use of public keys for wallets and opting for human-readable names that are becoming the first profile-named wallets. This does not go the way of Polkadot, Binance or Solana, which use 64-character numeric keys. There are many blockchain platforms, which are called L1, that want to do better what Ethereum does poorly: be faster and cheaper. Each has its own way of solving the problem of having to balance between security, scalability and decentralization. Cosmos is all about different chains being able to talk to each other, Avalanche is about no one bossing anyone else around, Fantom is about being able to do a lot of transactions in a short amount of time, and Solana is about making it simple to create finance apps. NEAR seeks to provide a complete solution to the problem and tries to do several things well at the same time: it is an L1 blockchain that uses a proof-of-stake (PoS) system and breaks into smaller pieces (shards) to make it easier to use and grow. Ethereum has a scalability problem, as do most L1 platforms like Solana and Avalanche. This means that it can’t handle as many transactions as it would like and that each one is more expensive for users. In addition, it takes longer to commit them, because its consensus mechanism needs each node to verify each transaction. To get around this problem, NEAR created NightShade, which improves on the classic blockchain sharding system by splitting each block instead of the main chain. Thus, instead of the entire network going through each node, it is split among all participating nodes and done in parallel. NEAR is currently improving its sharding thanks to a partnership with Octopus Network. Octopus allows developers to create use-case specific chains, which are called app chains, that are compatible and connect to NEAR through an Octopus bridge that functions as a smart contract. The speed of NEAR transactions also benefits from NEAR’s block production algorithm, called DoomSlug, which allows it to reach finality much faster and with fewer validators than other L1 chains that typically use Byzantine Fault Tolerant Consensus (BFT) algorithms. Even to ensure security and communication within the network, NEAR used a new approach to randomization, which is designed to allow unpredictability and fairness until at least 2/3 of the malicious actors. With scalability and security resolved, NEAR’s path to decentralization becomes much easier to achieve. ## Token economics Like most L1 chains, NEAR Protocol has a native token with different uses. The token is $NEAR, and its uses are: -Network security. -A medium of exchange for services and activities on the platform. -Transaction fees A unit of account Network security is ensured by staking the token. And the unique nature of NEAR’s token economy does not allow reordering transactions with additional fees as in other chains such as Solana, Cardano and Polkadot. Reordering transactions with additional fees allows users to saturate the platform with higher gas fees to get their transactions through first, creating congestion, increased gas fees and latency. With an annual yield of about 11% for bettors, NEAR has one of the highest yields among L1s. The yield applies to both validators and delegates, and the DeFi ecosystem is still opening up, with opportunities for even higher returns on platforms such as Ref Finance. ## Ecosystems Another peculiarity of NEAR is that the platform did not pitch DeFi and built for profit or money hunters, preferring to build around an engaged and active community, with rewards coming organically. The developer ecosystem has been one of the platform’s most impressive achievements, growing four times that of all other chains except Solana by 2021. Only Binance has seen faster growth to at least 400 developers. The incentive is that developers find it easy to dive into NEAR with traditional languages running on WebAssembly and because the platform rewards them directly. The community in NEAR is also very active and committed to the growth of the platform through the commitment of over $800 million into the community through guilds and DAOs through the NEAR Foundation, surpassing the numbers of other emerging L1s such as Celo and Fantom. On the app side, NEAR has seen an exponential boom of apps on its platform, with more than 300 apps strong and counting. One of the biggest reasons for this is Rainbow Bridge, Ethereum’s bridge. The bridge alone is responsible for $750 million in Total Locked Value (TVL) and an increase in transactions on the platform. The other possible reason for the massive influx of developers on the platform is the $800 million grant fund with over $300 million dedicated to developers and startups. It is one of the largest grant funds ever for an L1 blockchain. With a community that is engaged and active, the various sectors of the ecosystem such as DeFi and NFTs have been growing rapidly. ## Risk Assessment NEAR Protocol is not without its own flaws, with a long way to go to reach the level of decentralization of Avalanche and Solana or the mass of validators of Polkadot, with a significantly lower Nakamoto Coefficient than other L1s. However, the NEAR Protocol roadmap clearly lays out a plan to continuously improve the protocol and achieve better decentralization in the not too distant future. Note: The number of validators is not always a very accurate measure of decentralization, but it is an indicative metric. In addition, the effectiveness of the Aurora bridge is a double-edged sword, as the easy portability means that developers can take their NEAR projects to another network just as easily. Finally, NEAR’s technology is future-proof and appears to be better than its current L1 competition. Still, the general feeling is that the platform has yet to pass a serious test, and competitors continue to increase. In less than two years, NEAR Protocol stands out in key technical metrics among other L1 competition, which bodes well for the platform as it continues to implement its roadmap. NEAR’s vision is not limited to any particular ecosystem, but drives it to be the underlying web stack of the growing and emerging Web3.