I recently talked about NEAR Protocol with some friends, and it turns out many people still don't quite understand how it works. So I’ll try to explain from the beginning.

So NEAR is a layer 1 blockchain that has a unique sharding technology called Nightshade. This technology is designed to solve scalability issues we often see on Ethereum, where gas fees can skyrocket during high traffic. NEAR was launched in 2020 as a decentralized cloud infrastructure that can host DApps more efficiently.

What’s interesting about NEAR is that they have several solutions for cross-chain interoperability. There’s Rainbow Bridge, which allows users to transfer ERC-20 tokens from Ethereum to NEAR at much lower costs. Then there’s Aurora, which is an L2 solution on NEAR Protocol. Aurora can handle thousands of transactions per second with block confirmation times of around 2 seconds. This means developers familiar with Ethereum tooling can build directly on Aurora without needing to rewrite their applications.

Now, about the Nightshade technology. This is NEAR’s core technology that processes data by dividing work across many validator nodes. Each node only handles part of the network’s transactions, so throughput is much higher. The process is somewhat complex—transaction data is processed in parallel across multiple shards, and each shard generates part of the next block called a (chunk). These chunks are then processed and stored on the blockchain to finalize transactions. Theoretically, Nightshade can handle millions of transactions per second without degrading performance. The network can also dynamically split or merge shards depending on traffic.

For validator selection, NEAR uses a mechanism called Thresholded Proof of Stake (TPoS). It’s more like an auction where potential validators show how many NEAR tokens they’re willing to stake. Then TPoS sets a minimum threshold, and those who stake above that threshold have a chance to be selected as validators.

Regarding the NEAR token itself—this is the native token of the ecosystem. NEAR is an ERC-20 token with a max supply of 1 billion. The token is used to pay for transaction fees and storage on the network. Smart contract developers can also receive a portion of the fees generated by their contracts, while the rest is burned to maintain token scarcity.

If you hold NEAR tokens, you can stake them in NEAR Wallet to earn rewards. Rewards can be up to 4.5% of the total NEAR supply. Additionally, holders can participate in governance by voting on decisions and submitting proposals.

The current price of NEAR is quite interesting—around $1.28, with a 3.50% increase in the last 24 hours. Its market cap is approximately $1.65 billion, with a trading volume of $1.17 million. If you’re interested in buying NEAR, you can check various crypto exchanges that support NEAR trading pairs.

As blockchain continues to evolve, platforms that offer low fees and high throughput will be crucial for mainstream adoption. NEAR has the potential to attract developers who want to build more efficient DeFi and DApp solutions. Their roadmap includes further sharding development and L2 cross-chain solutions to scale blockchain even further. This can benefit both developers and users in the long run.