NEAR: A Pioneer in the Integration of Blockchain and AI

NEAR is quickly becoming a leader in the integration of Web3 and artificial intelligence, with deeper roots in the AI field than many realize. Interestingly, NEAR was not originally envisioned as a blockchain project. One of the co-founders embarked on this journey with a different goal: to create an AI-driven company. He was one of the eight researchers who introduced the revolutionary Transformer model, which provides key architectural support for today's most popular AI tools.

However, when launching the initial artificial intelligence projects, the team encountered significant challenges, particularly in incentivizing and coordinating the various contributors involved in building artificial intelligence models. It was this obstacle that made them realize: blockchain technology could provide the perfect solution. By leveraging a high-performance blockchain integrated with encrypted payments, they could facilitate the seamless exchange of foundational data, computing, and artificial intelligence models—this is a key feature in building an outstanding decentralized artificial intelligence ecosystem. This insight prompted a critical shift from artificial intelligence to blockchain, ultimately giving rise to what is now known as the NEAR Protocol.

NEAR has an astonishing alignment with some of the most compelling narratives in today's tech world. Whether the focus of discussion is on artificial intelligence, chain abstraction, achieving modularity through data availability, or scaling through sharding, NEAR's name always comes up. This raises an interesting question: Is NEAR simply riding the wave of popular trends, or is it genuinely providing innovative products that enhance the blockchain experience?

To answer this question, we must delve into the infrastructure of NEAR.

Solving Blockchain Scalability Issues: NEAR's Approach

Scalability is a challenge faced by Blockchain networks, and various parties are exploring solutions to meet the growing demand for fast and efficient transactions. While some Blockchains have already implemented technologies such as layer-2 scaling, sidechains, and state channels, these methods often involve trade-offs in terms of interoperability, composability, and usability.

Nightshade Sharding 2.0: NEAR's scalable backbone

A major feature of NEAR is its Nightshade sharding technology, which is a core component of the protocol's scalability strategy. The sharding technology divides the blockchain state into smaller, more manageable parts called "shards," each of which can independently process transactions. This design significantly increases the network's throughput without placing the burden of processing all transactions on any single node.

In the initial stage, NEAR implemented a design that divides each Block into "chunks", with each chunk containing transactions specific to a shard. Block producers and validators are assigned to specific shards, meaning they only need to process transactions related to their shard. This not only optimizes processing efficiency but also allows NEAR to achieve a throughput of approximately 3,000 transactions per second with the initial setup of four shards.

In the process of continuous development, NEAR is enhancing this system through stateless validation, allowing validators to verify transactions without storing the entire Blockchain state. This innovation reduces hardware requirements, further enhances accessibility, and achieves decentralization of the network. Additionally, NEAR is exploring the integration of zero-knowledge proofs and dynamic re-sharding into its sharding design, which can further improve scalability by enabling faster and more secure transaction validation. NEAR will expand to 10 shards by the end of the year, increasing network capacity by 50% to meet the growing demand.

NEAR's Nightshade Sharding provides the scalability, speed, and interoperability required for AI projects that need to handle large datasets and execute transactions quickly. The network's rapid finality ensures that AI-driven applications can run in real-time, making NEAR an ideal platform for developers looking to innovate in the decentralized AI space.

NEAR's Blockchain Interoperability Full-Stack Modular Architecture

As the blockchain landscape becomes increasingly decentralized, the demand for interoperability and seamless cross-chain interactions is more important than ever. The NEAR protocol recognizes this challenge and has built its platform to be a leading force in a unified multi-chain ecosystem. By implementing a range of innovative technologies—such as fast data availability layers, multi-party computation for secure cross-chain transactions, ultra-fast finality layers, and chain abstraction—NEAR aims to provide a unified and user-friendly experience across multiple blockchains. Each of these components plays a crucial role in positioning NEAR as a top interoperable blockchain.

Enhance cross-chain compatibility and connectivity

NEAR's commitment to interoperability is further exemplified by its integration with Ethereum and the broader Blockchain ecosystem. Certain platform is a smart contract on NEAR that is compatible with Ethereum's blockchain and ecosystem. The platform's engine runtime supports seamless deployment of Solidity and Vyper smart contracts, allowing developers to leverage NEAR's powerful infrastructure while maintaining compatibility with Ethereum. NEAR is compatible with popular wallets through specific tools, while a certain cross-chain bridge facilitates the transfer of tokens and data between Ethereum, NEAR, and certain platforms, highlighting the commitment to interoperability.

In addition to maintaining interoperability with other ecosystems, NEAR also provides seamlessly usable assets across chains through re-staking. A certain re-staking platform allows for cross-chain native re-staked assets, thereby creating a trustless decentralized ecosystem that contributes to the security of AVS. Re-staking through this platform, built on the NEAR protocol, can leverage liquidity from multiple ecosystems to create a seamless experience across blockchains.

The fastest data availability layer in the market

The data availability layer of NEAR is managed by a dedicated team to ensure that the Blockchain can efficiently access and process large amounts of data. With Nightshade, the NEAR data availability layer provides a robust solution for Ethereum rollups and other high transaction volume projects. Unlike other data availability solutions, NEAR's consensus mechanism can maintain speed even in the face of large data inflows, ensuring quick publishing and querying of data.

As more and more blockchains use zero-knowledge proofs to achieve unified security across chains, the NEAR data availability layer provides decentralized applications from multiple networks with easier and cheaper data querying and settlement. Moreover, the NEAR data availability layer ensures that nodes can remain synchronized even if operators are offline, adding a layer of reliability. This feature is beneficial not only for currently high-demand applications but also positions NEAR as a key player in future cross-chain settlements.

uses ultra-fast finality layer to support other Blockchain infrastructures.

According to the modular Blockchain theory, NEAR has collaborated with a certain platform to develop an ultra-fast final layer. This innovative settlement layer significantly reduces transaction time and Rollup costs while inheriting the security and finality of NEAR and Ethereum through the platform. The ultra-fast final layer relies on the NEAR data availability layer to obtain transaction data, enabling nodes to efficiently access and verify transactions.

Due to the ultra-fast finality layer supporting cross-rollup transactions, it has boosted NEAR's transaction volume, resulting in a deflationary effect on NEAR tokens as 70% of the transaction fees are burned. Collaboration with a certain platform has further strengthened NEAR's position in the modular blockchain stack, which has delegated a large amount of ETH to the ultra-fast finality layer, bringing the vision of chain abstraction closer to reality.

The Unification of Blockchain: NEAR's Chain Abstraction Vision

Modular blockchain architecture achieves scalability but also leads to fragmentation, resulting in the fragmentation of liquidity, user experience, and interoperability. NEAR addresses these challenges by advancing chain abstraction—a concept aimed at providing users with a unified experience across multiple blockchains.

NEAR's key management system allows users to manage their NEAR accounts using an email address, simplifying account creation and recovery. The system also supports multiple keys for different functionalities, enhancing security and usability.

In addition, NEAR integrates multi-party computation technology through chain signatures to ensure the security of cross-chain transactions, allowing users to interact with multiple Blockchains without the need to manage different wallets and mnemonic phrases.

The Attractiveness of NEAR

Stablecoins and Total Locked Value Growth

Since July 2023, the market capitalization of NEAR's stablecoins has remained relatively stable at around 75 million USD. However, the beginning of the second quarter of 2024 marks a significant turning point, with the market capitalization of all stablecoins on NEAR experiencing substantial growth.

This growth is reflected in the total locked value of NEAR and its EVM-compatible sibling blockchains. From July 2023 to now, the total locked value of NEAR and that blockchain has skyrocketed from about $55 million to $230 million, a year-on-year increase of 3 times in dollar terms. After adjusting for the value of native tokens, the total locked value calculated in NEAR has doubled, while the total locked value calculated in that blockchain's tokens has decreased by 40%.

Decentralized Finance on NEAR

The decentralized finance landscape on NEAR is currently dominated by two key platforms: a certain lending platform and a certain decentralized exchange. The lending platform has seen a significant increase in activity due to incentive lending programs for stablecoins. Similarly, the decentralized exchange is also actively incentivizing its stablecoin mining pools, with recent total trading volume surpassing $7 billion. These incentive measures are primarily funded by NEAR token rewards and may have played a key role in the surge of stablecoin market capitalization in 2024.

NEAR emerging categories and trends in the ecosystem

Re-staking

Re-staking has emerged as a growing category in the NEAR decentralized finance ecosystem, with platforms contributing approximately 15 million dollars to the total locked value. Although liquid staking is typically not included in the total locked value metric, it remains the largest category, with a total locked value exceeding 280 million dollars.

In a certain Blockchain aspect, although there are several popular EVM decentralized applications, the most widely used application is still a certain platform, which is designed to enable free transactions and facilitate token staking.

NEAR's Commitment to Web3 Artificial Intelligence Development

As part of its broader strategy to become a leading artificial intelligence platform in the Web3 ecosystem, NEAR is making significant progress in developing and nurturing artificial intelligence projects on its network. In addition to the efforts of the NEAR R&D Lab, the protocol has also launched an incubation program specifically designed to support groundbreaking projects at the intersection of artificial intelligence and blockchain technology. In the first batch of incubation projects, the program provides equity-free guidance, technical assistance, and guidance for expanding innovation to six selected projects.

NEAR's no-equity model allows artificial intelligence projects to fully focus on building and improving their products without the pressure of relinquishing ownership. This supportive environment is crucial for fostering innovation and has proven successful, as demonstrated by previous alumni, who have collectively raised over $20 million in external capital. The program starts a new round of funding every May, continuing three times a year, aimed at incubating a continuous stream of groundbreaking artificial intelligence projects.

NEAR Plan Objective