NEAR is helping to remove roadblocks to Web 3 adoption. NEAR’s climate-neutral Blockchain is primed for tremendous growth due to its high speed, cheap fees, and radical user experience.
What is proof-of-stake?
There are 2 consensus mechanisms, Proof of Work (PoW) and Proof of Stake (PoS). Ethereum 2.0 is a case of moving from the PoW to the PoS consensus mechanism and applying Sharding to improve the transaction processing speed of Ethereum.
Accordingly, the transition to PoS will help Ethereum overcome the old disadvantages of the PoW system: low performance, high transaction costs, scalability, and poor security of the network.
NEAR’s PoS is based on a voting mechanism: once a validator is selected, they begin working on solving the block.
Compare PoW and PoS
|Proof of Work (PoW)||Proof of Stake (PoS)|
|Proof of work (PoW) s a specific protocol designed to combat cyber-attacks such as DDoS (distributed denial-of-service attacks).||Proof of Stake (PoS) is a sort of consensus technique used to validate blockchain transactions.|
|A 51% assault requires a hacker to access more than 50% of overall computational power.||It is impossible for hackers to own more than 50% of all cryptocurrencies on the same network.|
|The mining probability is determined by the amount of computing labor completed.||The validity of a new block is determined by the size of the stake.|
|Miners are rewarded for complex cryptographic problem solving.||The validator does not get a block reward. Instead, they simply receive network costs as payment.|
|Mining hardware that is powerful and up to date is required.||A server-grade device is required for efficient processing.|
|PoW is the initial cryptographic consensus mechanism that predates PoS.||PoS is based on PoW, but it has significant advantages.|
|All nodes within a transaction are involved to gain greater scalability.||Every transaction does not include the entire network in its verification.|
The challenge of Proof-of-stake
Thus, PoS ecosystem stakeholder challenges the following
- There is a high centralization of stake and voting power among top validators. This staking invariably leads to increased centralization and the rich becoming even richer.
- Networks are having difficulty decentralizing stakes with their current staking architecture.
- Validators in the mid to long tail struggle to recruit delegations, resulting in significant validator churn.
The other challenge is that with each shard having its own validators, each shard is now 10 times less secure than the entire chain. So if a non-sharded chain with X validators decides to hard-fork into a sharded chain, and splits X validators across 10 shards, each shard now only has X/10 validators, and corrupting one shard only requires corrupting 5.1% (51% / 10) of the total number of validators.
However, the PoS participating position as a validator of PoS is subject to market pressure participating in a node validator runs but the value of the native token is devalued (ex: validator is suffering from joining a NEAR network node, decreasing from 12$ to 4$).
What is sustainable Proof-of-stake?
A sustainable PoS is to have many validators that stay with the ecosystem when the market is volatile. At the same time, they have a long-term vision for the ecosystem rather than short-term profit growth.
What should a validator’s portrait look like?
Validators are technical teams who run nodes and build NEAR’s network infrastructure. Validators have to run their node 24/7 and need to ensure they never miss a network update.
To become a validator of NEAR, they must not only match the criteria of a validator node but also have a vision and direction for the NEAR ecosystem. At the same time, validators should also be interested in the proliferation of projects and directly participate in supporting projects.
NEAR’s action to build trust among validators in the ecosystem
NEAR Protocol’s level of decentralization is lower than Avalanche and Solana’s or Polkadot’s validator volume, with the Nakamoto Factor significantly lower than other L1. 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.
L1 Blockchain Validator and Nakamoto Coefficient Comparison
NEAR is building a Sharded Blockchain
There are 4 stages of sharding:
– Phase 0: Simple Nightshade – Increasing the Throughput of the Network (November, 2021)
– Phase 1: Chunk-Only Producers – Further Decentralizing the Network (in progress, July 2022)
– Phase 2: Nightshade – Increasing the Accessibility for Validators (Expected, Q3 2022)
– Phase 3: Dynamic Resharding – Unlocking NEAR to Infinite Scale (Expected, Q4 2022)
Phase 0: Simple Nightshade – Increasing the Throughput of the Network (November, 2021)
The Phase 0 announcement is the transition of the NEAR mainnet from a single shard to four shards. The great thing is that this doesn’t change the NEAR community’s smart contracts. You don’t have to upgrade them. The Simple Nightshade approach is unique in that each block contains all transactions from all shards. No participant downloads either the full state or the full logical block — instead, they maintain the state connected to the shards for which they validate transactions
L1 Blockchain Block Time Comparison
Phase 1: Chunk-Only Producers – Further Decentralizing the Network (in progress, July 2022)
What’s Stake Wars III?
Stake Wars is a program that helps the community become familiar with what it means to be a NEAR validator, and gives the community an early chance to access the chunk-only producer.
Recently, Near informed implementation of phase 1 testnet from July 13 to Sep 2022. Stake Wars is back to help decentralize the NEAR network and help the community with cool new challenges and rewards to members who want to become validators. In Stake Wars: Episode III, NEAR is focusing on Chunk-Only Producers — NEAR’s next step toward a fully-sharded protocol.
With Stake Wars III set for July 13, here’s a brief rundown of the new Chunk-Only Producer role, and what to expect from the Stake Wars program.
Stake Wars is community-operated, and community members such as Metapool, Everstake, LiNEAR and Open Shards Alliance (OSA) will offer their support to the program. NEAR plans to use more than 4M $NEAR tokens as delegation rewards for the participants who complete the challenges. These rewards help put participants in a position to become a mainnet validators by Q4 of 2022.
Stake Wars gives participants challenges, mainly focused on technical deliverables, and offers them support as they progress throughout the technical work. Solving challenges gives participants rewards, shaped as NEAR tokens granted or delegated.
What is a “Chunk-Only Producer”?
Indeed, this is Chunk-Only Producer – a new kind of validator with lower hardware requirements than the current one. Chunk-only producers is only validate one shard. They produce chunks (shard blocks) for some specific shard and only need to run inexpensive hardware. Because they neither produce blocks nor contribute to the approvals, the security of the chain is not affected.
Specifically, Chunk only requires a 4-Core CPU, 8GB RAM, and 200GB SSD memory . The number of validators is estimated will increase 2-3 times to 200-300 validators. Compared to other blockchains, NEAR’s hardware requirements are lower, so the number of validators will be more and the impact on the environment will be reduced.
In fact, Chunk-Only Producer Mainnet must be implemented since Jan 2022 as Near’s Roadmap This means NEAR has delayed 6,5 months on testnet and 9 months on mainnet.
Besides, in this recent article, NEAR Protocol also reduced the number of max estimated increased validators from 400 to 300 You can check out the old post.
Anyone who holds a sufficient number of NEAR tokens can become a Chunk-Only Producer. Below are the various ways you can run your own Chunk-Only Producer node:
– Hardware Node
– Software as a Service Node
– Join the Validator Bootcamp
Guideline Deploy a NEAR chunk validator on AWS: https://github.com/Scott-Canning/Deploy-a-NEAR-chunk-validator-on-AWS
Benefits of becoming a Validator/Chunk-only Producers
The Stake Wars gives everyone the opportunity to join the MainNet, and receive delegated tokens from anyone who already has NEAR tokens.
– 4.5M NEAR in Delegation Rewards
– $250k in Unlocked NEAR Tokens
A leaderboard of validators will be maintained during Stake Wars III, highlighting those validators with the most consistent uptime.
Stake Wars III is an opportunity to gain confidence and learn how to work with contract-based delegation, with the goal of joining the network as a Chunk-Only Producer and being ready to launch your service on the mainnet.
NEAR Protocol currently has 100 validators and thousands of delegators, and is working to increase those numbers in order to further decentralize the system. The top 7 validators on NEAR Protocol have the most stake $NEAR.
Sharding is not the final phase of evolution for the NEAR Protocol. Rather, they hope it’s just the beginning. They are simultaneously working on a number of improvements on the protocol level to build a secure, developer-friendly, and scalable blockchain that can support mainstream usage and adoption.
The Validator’s Responsibility
In September 2021, NEAR only had 300+ projects, so now (July 2022), it has increased to 700+ projects in the ecosystem. Besides, during the bear period, the number of new wallet account openings as well as transactions on NEAR increased significantly, which shows the development potential of the NEAR ecosystem. That means the number of validators will be linear with the growth of the ecosystem. Validators need to have a long-term vision of the ecosystem, not just short-term profits. When the number of validators increases but there are few viable projects, there will be an excess of validators due to a lack of active transactions and on-chain activity. Therefore, validators should also contribute to promoting the economy on NEAR Protocol (DeFi, NFT, GameFi, Metaverse…).
Finally, although being less than two years, NEAR’s parameters demonstrate that it is not inferior, and in fact outperforms several other layers one blockchain platforms. NEAR has demonstrated largely organic growth which is sustainable in the mid to long term. NEAR is a potential ecosystem. Become a sustainable validator and care about developing the ecosystem to receive more benefits. In addition, the current validators continue to stay in the ecosystem to still participate in the development of the ecosystem, the community of industries on the NEAR blockchain. The benefits of validators will be associated with the development of the ecosystem.