Near protocol is a platform on which developers can launch decentralised applications (dApps) and smart contracts, almost like a decentralised version of Amazon Web Services. Its website promises “more transparent and resilient” online experiences that are “shaped and controlled by their creators and users”.
Anyone that helps to develop or sustain the network through transaction processing, security, and smart contract development is rewarded for their contributions with their native cryptocurrency, NEAR.
Note
Luno does not currently support sending or receiving NEAR, but you can still buy or sell it like any of our other cryptocurrencies. This decision has been made in order to ensure there are appropriate controls in place to maintain the highest standards of investor protection. Learn more about why you can't send or receive NEAR.
How is NEAR protocol different to competitors, like Ethereum?
Sharding
Sharding is used by blockchains to improve performance and increase the number of transactions it can process. It is done by breaking up the blockchain into smaller, more manageable sets called shards. Nodes then process the data in individual shards to verify transactions on the network, rather than each node being responsible for every transaction across the entire network. It effectively allows for parallel processing, which significantly increases the network’s transaction capacity.
Near uses a specific method of sharding called Nightshade to make its network faster and more secure. Nightshade divides the network into shards, with each shard having its own group of validators. These validators are like security guards who make sure transactions are valid. To communicate between these shards, Near uses a system called "fisherman" to double-check transactions and keep everything running smoothly. By doing this, Near can handle lots of transactions quickly without sacrificing safety or fairness across the entire network.
Thresholded Proof of Stake
Near’s Thresholded Proof of Stake (TPoS) consensus mechanism allows validators to join the network based on the amount of cryptocurrency they hold. Validators are required to stake a certain amount of NEAR to participate, ensuring their commitment to the network’s security and integrity.
This approach incentives wider participation while maintaining the network’s security standards, as validators with larger stakes have a greater influence on consensus decision-making.
Aurora Virtual Machine
Near uses a version of the Ethereum Virtual Machine (EVM), known as Aurora. The EVM is a set of tools that developers use to build and execute smart contracts on the Ethereum blockchain. This integration allows developers to migrate their Ethereum-based decentralised applications (dApps) onto the Near network.
What is NEAR’s cryptocurrency?
The native cryptocurrency of Near Protocol is NEAR. The cryptocurrency powers its governance, security, and economic systems. NEAR incentivises active participation, secures the network, and allows users to interact with and contribute to the broader NEAR ecosystem.
Tip
Are you keen to explore NEAR a bit more? You can learn about NEAR basics and get all the latest cryptocurrency news on Luno Discover.
Want to know how to buy or sell NEAR? We’ve got answers in the following help articles:
This information is not intended to be nor does it constitute financial, tax, legal, investment or other advice; nor is it a call to trade. The information is intended as general market commentary for information purposes only. Before making any decision or taking any action regarding your finances, you should consult a qualified Financial Advisor.