Welcome to the 4NTS January Newsletter. January has felt like a year of its own. Turmoil in traditional financial markets has made many people take a second look at crypto, both as an investment and a core technology. Elon Musk has jumped on Bitcoin, and to some extent DeFi. NEAR has continued to build at rapid speed – with the EVM making serious progress, and the NEAR marketing team kicking into gear. Here’s what happened in January:
The NEAR Vision: “A world where people have control of their money, data, and power of governance.”
The NEAR Mission: “Accelerating the World’s transition to open technologies by growing and enabling a community of Developers and Makers.”
NEAR Goals (Posted in this update here): “We’ve got a shared goal across NEAR to help onboard 2,500 developers and support 10 successful apps in 2021. We think this is achievable but it means we need to ramp up awareness campaigns.”
Our takeaways from these updates: Support NEAR because it is explicit about it’s desire to safeguard privacy, and democratize innovation. It also is going to boom.
NEAR EVM Update:
After significant discussion, the NEAR EVM team reported that nETH will base the NEAR EVM. You can follow the discussion on this decision here. Second, the EVM Team set a Q1 goal of launching the EVM on testnet. Team lead Arto Bendiken had the following to say:
“For most of our partners to succeed in deploying they should be able to deploy their apps to test-net once it is all up and going and they should certainly be able to bring it over.”
The team set the aspirational goal of getting to Main Net by the end of the quarter. Regardless of whether this is reached it is fair to expect a Main Net Debut of the EVM around Mid-Q2 based on current progress (i.e. that is subject to change). The full update can be found here.
DragonFly Capital Joins the NEAR Validator Advisory Board:
The NEAR Governance Forum Launched. It’s awesome to use and will definitely be the home for much discussion and development into NEAR’s future. NEAR DAO’s are making a steady march into the Ecosystem (Sputnik, Developer, Angel) → More on this to come in February. And the NEAR DevEx, led by Matt Lockyer is staffing up for a busy spring starting with ETH Denver.
Humans of NEAR is an original series on the backstory of the different NEAR team members. It is poised to launch in the coming weeks, with insights into the origins of NEAR, and unique stories in crypto.
Academics incoming – the 4NTS Vector strategy will officially launch in February, bringing in new perspectives, discussions, and contributors to the NEAR Ecosystem.
Crypto is an emerging industry – we all know that. Some of us have done this before, in the 1990s during the early days of the internet. Others are here for the first time. With market volatility and crypto twitter, it’s pretty easy to lose sight of the bigger picture and revert back to common paradigms of viewing product development, competition, and new products. But emerging industries are usually different – at least at first – and even then, crypto is very different from other industries.
This article provides an informal overview of how I think it would be healthy to view NEAR’s development in parallel to Ethereum. To date, there have been lots of narratives surrounding Ethereum: Ethereum Killers, Ethereum and Open Finance, Ethereum outgrowing Bitcoin, as well as interoperability between Ethereum and other L1’s (like NEAR or Polkadot). Everyone is very opinionated on the topic, and understandably so: If you have stuck around with Ethereum over the years, you are undoubtedly fond of it. Or, if you missed the boat, you might be looking for the next opportunity.
Regardless of what your background is, there is a certain picture I want to paint that hopefully does justice to the context of NEAR’s development alongside Ethereum. While that picture will touch upon technical details and protocol design features, as well as the words of NEAR Co-founder Illia Polosukhin, it actually starts with a comparison made by Haseeb Qureshi, Managing Partner of Dragonfly Capital:
“NEAR is not trying to kill Ethereum. At this point, Ethereum is going to forever be a fixture in the smart contract landscape. Rather, NEAR collaborates with and augments Ethereum, as another major city in the landscape of blockchain networks.”
Smart contract land, is the name of the space Haseeb refers to when referencing the development of different cities, farms and suburbs (i.e. different protocols, Layer Twos, etc). And when we look at project development from this perspective, it actually dissolves a lot of the artificial divisions we might make between the ‘competition’ and ‘success’ of projects compared to one another:
Cities rise and fall. Some cities endure for thousands of years, while other cities fade out over time as resources are depleted or better infrastructure is built elsewhere. It’s a process, and at the very center of the process is the identity of the city in question: What kind of a culture does the city have? Is it expensive? What kind of people does it attract? Does it have a massive population? Or perhaps a key focus on sustainability or innovation?
Another point to keep in mind, is that while some people really identify with ‘their city’ (like New Yorkers or Bostonians) others who grow up in the suburbs, may come to spend time between cities. The point is that comparing cities is not necessarily a metrics-based-comparison, as much as it is a value, culture, infrastructure and identity-based comparison. How should that affect how we view NEAR and Ethereum?
There Are Some Fundamental Design Differences Between NEAR and Ethereum
Anyone who takes the Open Web and the development of Crypto seriously needs to be able to ask themselves the following three questions:
1. Scalability: For where crypto is going in the future, is Ethereum (or my favorite L1) capable of scaling over time to handle massive levels of mainstream interest and adoption?
2. Developer Friendly: For how cryptocurrencies and smart contracts will evolve into traditional computer science and software development, is Ethereum (or my favorite L1) developer friendly, accessible or appealing?
3. Usability: For the global user-base that we expect to use all of these dApps, is Ethereum (or my favorite L1) cost effective, easily accessible and intuitive for new users?
NEAR is building a city of the future, based on the original vision created by Ethereum. NEAR’s city is going to be massive, but it will take time for it to grow. NEAR’s City will be a central hub for future crypto innovation and emerging technology integrations, and will attract developers and entrepreneurs interested in quickly getting their business launched. It will be a commercial hub, where anyone and everyone – from any background can participate in the Open Web and a new ownership economy, regardless of where they come from or what they believe in. And perhaps most importantly, it will be a city with a culture of inclusion: Where companies port across ecosystems to other blockchains – like Ethereum – and where the people are friendly.
Ethereum is the city of the future manifested in the present. It’s extremely developed, beautiful, funded and renowned. A definite wonder of the crypto-world – today and for the next two hundred years. As the first city of its kind, Ethereum attracts the best and the brightest getting into crypto. However, it’s not the most inclusive place: A large portion of its population has lived in Ethereum since before it was this glistening behemoth of the new world. The language can be hard to learn. And parts of the city can be extremely expensive. The character, nevertheless, is that of a global hub for Decentralized Finance and Enterprise Blockchain. The value of the city towers above anyone who goes into it.
A Tale Of Two Cities: Scalability
Let’s address the first question:
For where crypto is going in the future, is Ethereum (or my favorite L1) capable of scaling over time with massive levels of mainstream interest and adoption?
We all know that Ethereum Gas problems have made scalability a challenge.
And while the Ethereum team is hard at work, Haseeb refers to the amount of time it will take for a durable solution to be implemented as a long-term solution:
“Vitalik recently claimed that smart contracts on Ethereum 2.0 will take so long, Ethereum has to go all-in on rollups in the intervening years.”
This is where things become interesting if we ask the same question in relation to NEAR:
NEAR is already launched as a horizontally sharded blockchain platform. As Illia explains, block times are quick, and fees miniscule:
“Right now we have 1 second blocks, roughly, and 2 to 3 second finality, right. Which in comparison to the ETH 2 approach you guys have like 12 second slots and 13 minute finality or something like that in the best cases. So that is a spectrum, and finding how to create tiers of security – that is what we did with our shards. There will be a lot more validators on the shards then block production.” (Illia – Grilling the Rainbow)
In terms of costs, that translates to an initial price for 1 TGas being 0.0001 N. Making one block 0.1N at the minimum. A larger overview for setup costs on NEAR is listed below:
Overall, NEAR has baked scalability into the core design of the protocol so that as more projects start to build on top of the network and more transactions accrue, the network is able to naturally handle the transaction load by adding more shards:
“To give you a sense for the sheer scalability improvements NEAR offers, each shard on the NEAR blockchain can process 10x more transactions individually than Ethereum 1.0. The NEAR blockchain will eventually have over 100 shards. This means that NEAR will eventually be able to process over 1000 times more transactions per second than Ethereum 1.0.”
One conclusion to take away from this is that while Ethereum will most definitely find a way to continue to operate, it will be some time before it is able to scale at a cost and speed comparable to NEAR. NEAR, while handling significantly less value than Ethereum (eons less in fact) is designed to handle transactions in a quick and cheap manner.
A Tale of Two Cities: Developer Incentives
A 2020 Global Developer study suggests that there are 26.9 million developers around the world. By 2030 that number will increase to 45 million. As the study goes on to explain:
From within this context, any person who is seriously invested in the future of crypto and the widespread development of crypto-based solutions and products, needs to then ask themselves the second question from above:
For how cryptocurrencies and smart contracts will evolve into traditional computer science and software development curriculums, is Ethereum (or my favorite L1) developer friendly, accessible or appealing?
Let’s take NEAR first this time:
NEAR is built by and for developers who want to quickly and easily create blockchain-based dApps, games, and other Web3 solutions. To do that, developers can code in Rust and AssemblyScript. Even more interesting, is the small benefit directed towards developers once they have deployed their solution: Developers take 30% of transaction fees home with them from their contracts. These are things that have been said before – what matters is the effects of this design.
NEAR is built to appeal to the developers of the future by allowing them to build solutions in more familiar programming languages. A lot of other L1 protocols have taken a similar approach (so in this sense it’s not a super unique characteristic of NEAR). The fact that developers take home 30% of rewards from their contracts, is a statement of how value is viewed on the protocol: Developers are natively rewarded by the protocol for building on top of it.
Ethereum was never created with the thought of appealing to the 20 million new developers that will sign onto the internet between 2020 and 2030. It was the first of its kind. And in this context, Solidity is a programming language that may someday look a lot like Ancient Greek: It inaugurated a paradigm shift in computing, but it remains difficult to learn and expensive to contract for.
That being said, building on Ethereum does have a number of advantages for developers: Massive amounts of Layer 2 infrastructure (i.e. Matic) has been built to accommodate developers. A huge world of development opportunities exist on top of existing L2s that can be done in other programming languages, and a huge network exists to source talent, connect to existing solutions, and scale an existing product.
A Tale of Two Cities: Usability and Accessibility
Crypto Twitter is good at creating the illusion that the world of crypto exists in a parallel universe to the rest of the world. But as the history of innovation and technology diffusion has demonstrated at length, dating back to the first industrial revolution, any general purpose technology that creates value is inevitably positioned to tip into other industries with massive network effects. Crypto is no different.
That means that the Layer 1 Protocols of today, like Ethereum and NEAR, need to be asking themselves what was listed above as the third and final question:
For the global user-base that we expect to use all of these dApps, is Ethereum (or my favorite L1) cost effective, easily accessible and intuitive for users?
Let’s start with Ethereum on this one: User-engagement presupposes a certain familiarity with Crypto, that does not look to change in the future. Setting up a MetaMask wallet, figuring out private keys and wallet addresses, and navigating custom network RPC’s is baked into the design of Ethereum. That is not necessarily a problem right now, but it is unclear how that will change in the future as more users coming from a more familiar digital environment begin to experiment with crypto.
NEAR, differentiates itself from the pack when it comes to usability. On NEAR there are two different types of Accounts:
As Illia explains, accounts on NEAR are able to be ‘named’ with an AccountID. These accounts in turn have additional progressive security features including email and phone number verification and backups.
The Main Differences Between the NEAR Account Model vs. ETH
Notably, this model can create its own host of problems as well (i.e. See here the Account Faucet Discussion), but the overall intention is to make the NEAR ecosystem more user-friendly, intuitive, and familiar to new users. Future projections about mass adoption and new users entering the space are exactly that – projections – so the real effects of the different user-engagement designs will only be revealed in time.
What Does A Tale of Two Cities Entail Into the Future?
To conclude, I want to take a big-picture view of the crypto space and its development in the coming decade. One thing that I think is highly underestimated in this space, is the lack of focus on accessibility for new participants:
If we believe that Web3 will continue to grow in both development and users in the coming decade, we need to ask where those users will be coming from?
While one may stereotypically assume that Europe, the United States and East Asia will be the fundamental drivers of the crypto revolution, others hold that much of the developing world will be the primary users of a lot of the core products being built today. Charles Hoskinson, Founder of Cardano and current CEO of Input Output, discusses in the interview below why he believes that the future of crypto is largely to be found in developing economies predominantly in Africa, South East Asia, India, and South America:
In the context of building the great blockchain cities of tomorrow, it is important to recognize that in order for crypto to be accessible and appealing to this massive user-base, it also has to be affordable. And while protocol gas fees are high on ETH, much like an expensive city, the crypto space is young and looking to expand outwards.
Into the future, the two cities of NEAR and Ethereum will both continue to build and morph into deeper and more complex environments. Time will tell what unique characteristics, identities, and cultures they both come to reflect.
In crypto the team behind a project is as important, if not more important, than the technical goals and larger vision that the project puts forward. As the 2017 bubble has demonstrated, being able to execute as a team and bring to life the goals of a particular crypto-ecosystem, is very much dependent upon the personalities involved in that ecosystem day-in-and-day out.
The NEAR Team has been known for being exceptionally strong, with serial entrepreneurs, gold medalist coders (6 Gold Medals at ACM ICPC), and decades of combined experience at top Silicon Valley Tech companies (5 ex-Googlers). Nevertheless, there are a couple of noticeable recent hires that should continue to inspire confidence in the development of NEAR as it becomes more widespread, known, and used across the crypto space:
Point 1: Alexandra Tinsman Joins NEAR as a Vice President of Marketing
Alexandra Tinsman brings decades of experience to NEAR. She has worked on Xbox, Pokemon International, and Riot Games. She has been front and center on marketing the world’s first digital assets from League of Legends, Magic: The Gathering Online, and Pokemon Go. What’s interesting is that her background is focused on driving results “by cultivating customer-centered cultures”. In short, she will play a prime role in making sure that usability remains the first priority of NEAR Protocol as it continues to expand for developers and users.
Note: She will be livestream on YouTube today, December 2nd here.
Point 2: NEAR’s Content Team is Gearing Up Alongside It’s Community Team
Mally Anderson recently joined the NEAR team about 2 months ago to take over as ‘Head of Content’. Her background is diverse and well rounded: She was an associate editor for Penguin Press, a writer and editor at ConsenSys, and well published across mainstream journals including Decrypt, Devcon, and Quartz.
In parallel to Mally’s hire, James (@jwaup) and Eunice (@eunicecyl) have joined the NEAR Community Team to focus specifically on Community development in the context of the Guild Program, as well as NEAR Validators.
When one takes all three hires together, it becomes clear that NEAR is investing in not only the technical and social elements of their ecosystem but also the more creative and community based parts as well. It will be interesting to see in the coming months how new content, planning, and community engagement lead to new initiatives and communities within the ecosystem.
Point 3: Business Development and Recruitment Rounds Out The Final Group of Hires
Cameron Dennis and Austin Harshberger join NEAR as recent hires, but this time with a focus on the business and recruitment side of things: Cameron is previously president and founder of the blockchain acceleration foundation based out of California. He Joins NEAR as a Business Development Analyst. Austin meanwhile, is a software engineer by training who is looking to recruit developers into the NEAR ecosystem – he brings experience from Apple, Coinbase, and Github. Last but not least Ashley Tyson, Co-Founder of the Web3 Foundation, is also listed on the NEAR Team Page (although the full extent of her role isn’t clear).
Point 4: Dr. Alex Shevchenko The Joins Rainbow Bridge Team
Dr. Alex Shevchenko joined the NEAR team four months ago. While not a super recent hire, he is an important point in the development of the NEAR Team, especially as it relates to the NEAR – ETH Bridge. With experience from Bitfury, and a Ph.D. in Physics and Mathematics, Alex brings deep experience in high performance computing – perfect for handling massive macro challenges like the NEAR – ETH Bridge, and the implementation of EVM on NEAR.
Taking Stock: New Hires For Growth
The most recent set of hires for the NEAR team brings together more talented individual to execute the NEAR Team’s ambitious vision of Building the Open Web. Team members come from the likes of Pokemon Go, Academia, Apple, Coinbase, ConsenSys and much more.
Most importantly, the hires reflect a balanced engagement with the different pillars of the NEAR Ecosystem: Marketing, Business Development, Community Development, Content, Recruiting, and Ecosystem Growth.
NEAR is Hiring!
If you are interested in joining one of the most stacked teams in the crypto space, check ou the open positions on the NEAR Website. Ecosystem Development, Engineering and Operations are looking for many hires in the coming months!
4NTS Guild recently sat down with Steve Huang from the NEAR Chinese Community to get an update on the development of NEAR protocol in China and the larger Asian community. As a status update for the rest of the NEAR community, there are a number of important takeaways relating to the global development of NEAR Protocol including a link to the most recent NEAR Chinese Community AMA:
Point 1: NEAR Has A Solid Chinese Team
What may come as a surprise for many in Crypto from Europe and North America, is that NEAR has a well-established Chinese team based out of Shanghai and led by NEAR Co-Founder Ilia Polosukhin.
In total Steve, Amos, and Ilia are all based out of Shanghai, while other team members work remotely from other parts of China. Active engagement with the Chinese community is a core part of NEAR’s China engagement strategy, and as such Ilia and Amos partake in Weekly AMA’s on WeChat. For the most recent one that has been translated see Here.
Point 2: The Chinese Community Is Large – And Expanding Quickly
Notably, the NEAR Chinese community is already large, and expanding rapidly. As the images below demonstrate, NEAR’s Chinese Community boasts an astounding 22 Guilds, with a WeChat community of 9,000 strong. Of the 22 Guilds, 2 are considered pure developer guilds looking to build native solutions on NEAR, or using the Rainbow Bridge (more on this below).
“Our Business Development team has actually talked to more than 300 projects thus far, spanning across a wide range of verticals, such as eSports gaming, transcoding services, p2p tournaments, social network, and various other use cases of NFT” – Chinese Community AMA.
A further question also explains NEAR’s approach to China in particular:
The Chinese market has become a huge emerging market that many projects concerns. Share with us some efforts have you made in rooting in the Chinese market, and what’s your plans on building the Chinese community?
China has the largest internet user base in the world and is pretty much cashless. Applications tend to iterate and grow faster in China, and people are much more willing to try out new things. As a project aiming to make blockchain usable for every day users, we place a great strategic focus in China because it’s probably the best place for us to get a bunch of innovative entrepreneurs and a large set of users to help us with quick product iteration.
Point 3: NEAR’s Asia Development Plan Is Just Getting Started
The NEAR China Community officially launched in 2019, and has been growing strong. NEAR Team efforts combined with a rapid growth in NEAR guilds has NEAR Expanding across much of Asia in the coming months. Notably, expansion is already planned into Indonesia, Japan and Vietnam. In this approach, the NEAR team will be focusing on Devs and Founders who will be building solutions on top of NEAR.
To date, many of the most active members in the NEAR Chinese Community already work in other Chinese crypto firms, and thus provide a sustainable foundation for organic development into the future.
The long term development goals of NEAR in China and the larger Asia region are also outlined from the AMA:
“We are already working with many local partners in China and will continue building on these relationships to get more developers, more entrepreneurs, and more users into NEAR’s ecosystem in the next a few years. I am personally super excited about NEAR’s potential in China.” – Chinese Community AMA Question 12.
Point 4: A Lot of Development Is Waiting for the Public Launch and Completion of the NEAR — ETH Rainbow Bridge
A final important point is to understand the importance of the development of the NEAR – ETH Bridge in the context of NEAR’s Asia Development Strategy. According to Steve, half of the Developers building on NEAR in China are waiting on the EVM to be implemented in order to bring their solution onto NEAR. The other half are already actively building solutions that will launch in the coming year.
And even though NEAR is trading on top Chinese exchanges with good support and liquidity, Steve emphasizes the focus of the NEAR team on cultivating developers to build long-term solutions that will bring value to the protocol:
“We are planning to do some localizations and some more localized events, we are planning to experiment with some educational series, and to introduce the technology side of NEAR to more audiences right now. We are still being careful though: We won’t hold any other trading competitions so far. That is not what NEAR aims for. NEAR Will mainly focus on developers and real blockchain users for now.”
As the NEAR China community grows rapidly, it is now easy to see why NEAR Co-Founder Ilia Polosukhin is known as @Ilblackdragon!
Disclaimer: None of the insights or facts explained below should be taken as investing advice. Please consult a financial professional when investing in utility tokens and other financial products. 4NTS Guild does hold NEAR.
A Hosted PDF Version of the Thesis can be found here.
This is a macro-level overview for prospective crypto investors and entrepreneurs interested in better understanding the position of NEAR protocol in the larger crypto- and emerging technology marketplace. For an introduction to NEAR, readers can review The Long Term Value Proposition for NEAR Protocol. In this short paper, a thesis is put forward for NEAR protocol that explains the position of the protocol in the larger crypto – and Web3 space. As an argument, we argue that NEAR is extremely well positioned to sustainably grow in the coming decade, based upon its technical design, developer incentive structure, focus on usability, and global business development approach.
Before we explain our reasons for this thesis, we start by explaining the context of NEAR in the larger Web3 space. This context centers upon an impending crypto bull run, growth of peer-to-contract applications (encompassing decentralized finance, but also much more), as well as the larger infrastructure inversion that Web3 presents and the development opportunities contained therein.
Argument 1: We Are On The Precipice of a Web3 Revolution
Define – Web3: The standardization of value built as a protocol layer of the internet. Peer-to-Peer and Peer-to-Contract network infrastructure from which data and value is handled in a decentralized, public, and permissionless manner using token-based incentive models.
Overview: After three previous market cycles, the cryptocurrency space is positioned for a fourth cycle at a time when smart money, institutional acceptance, and private interest in Web3 is on the rise. Similar to previous technology revolutions, this fourth cycle marks the beginning of a fundamental infrastructure inversion for many of our digital and physical systems. As a result of this inversion, a host of new opportunities and business models will be born in the coming decade plus. NEAR protocol is the platform that is optimally positioned for handling these opportunities.
Premise 1: Demand Factors
Smart Money Before the Masses: After 2 years in a bear market, interest in cryptocurrency and digital tokens is on the rise once again, signalling for many the start of the next bull market. Notably, at the current stage of this cycle, it is predominantly wealthy zip codes in Silicon Valley and New York indicating the entrance of smart money – interested in the value proposition of the underlying technology, and hedging against a weakening dollar. Bitcoin as a whole remains at well below 1/10th of the market cap of gold.
In context, the majority of mainstream finance across the global economy, remains on the sidelines for not only Bitcoin but all of crypto. The trickle-down logic is as follows: If Bitcoin is validated as a serious investment by mainstream investors, private companies, and institutions, interest in other cryptocurrencies such as Ethereum will follow closely. Demand for the more encompassing value proposition of Layer 1 blockchain protocols arrives: As Bitcoin rises to prominence, other cryptocurrencies as a whole rise as well.
Institutional Acceptance of Both Crypto and Blockchain: News about Microstrategy, to Grayscale, to Paypal, to even AirBnB and Venmo are clear indicators of the integration of cryptocurrency payment systems with legacy internet payment systems. Institutional adoption validates the usability of cryptographic tokens – an early stage signal of what the future will look like. This signal is further complemented by numerous central banks planning to launch digital currencies in the coming years. In short, institutional acceptance of cryptocurrencies and the underlying distributed ledger technology (be it private or public), validates the long-term interest in token-based economies and the innovative benefits of blockchain.
The Maturation of Web3: Beyond demand factors coming from traditional finance and institutions, demand for crypto-based products, marketplaces and verticals continues to grow in its own right inside of Web3 itself: The future of blockchain-based gaming, non-fungible tokens, decentralized protocols for music and art, as well as DeFi continue to attract capital and interest. As many protocols have launched, future value in the solutions built on top is only just starting to be created. Demand for these solutions is only starting to develop as they become tangible and usable.
Premise 2: Infrastructure Inversion
Define Infrastructure Inversion – Change that occurs when new infrastructure is laid on top of old, pre-existing infrastructure – and how that creates a conflict
Overview: Serial entrepreneurs and technology investors look beyond the financial market value of cryptocurrency, and focus on the underlying value proposition inherent to its core technology: blockchain. Blockchain has the capacity to re-create digital systems such that self-executing software can operate without human interference in an open and permissionless manner. These recreated digital systems that are self-executing have the potential to not only handle data as currently used on the internet, but also data from other emerging technologies such as sensors, satellites, drones, and autonomous and artificially-intelligent machines. Inverting and digitizing much of our digital or institutional infrastructure thus has the opportunity to offer more inclusive and open systems that in turn can scale with emerging technologies to create new and previously untapped value.
Mike Novogratz on Ethereum: Mike Novogratz is a legendary crypto investor who has been actively involved in both Bitcoin and Ethereum from their early days. His understanding of the coming infrastructure inversion is explained when he discusses the real future of value in crypto over the next five years: “In a lot of ways the real revolution, which is coming in five or ten years, is when we rebuild the whole architecture of the financial system. That is the Ethereum revolution, or maybe it’s the Ethereum plus whatever – some of these level two’s or someone else a part of the level one.” (21:42)
“For the first time what we have is a potentially digitally native store of value where the bits in the computer are the money, which is very different from the existing financial system where you do have a ledger and the bank has an entry that says you have such and such money. But it is really just an IOU from the bank – if you go to the bank they will give you some cash. It’s not that the bits in the computer are the money. So if you take that one step further and say, if the bits in the computer are the money, why is that interesting? Well it is interesting because now what that means is that computers can own money. Computers and machines and software can take custody of money. And so for the first time, a human can pay a machine without another human in the loop. Or a machine can pay another machine without a human even being involved. And if you play that forward, one step forward, you say, well, ‘why is that interesting?’ Well it is interesting because there is a set of stuff that computers are better than humans at – and strictly speaking there is only one thing that computers are better than humans at – and that is that computers are better than humans at deterministically executing some set of instructions on some future time horizon. That is literally what computer code is: Do this and the same thing happens every time. If you think about the world, a lot of the world is ‘here is a huge pile of money’ and ‘here are a bunch of rules about that money’ – who has access to that money, and when that money can move and on some future time horizon I need you to execute some set of instructions: That’s a will, that’s a trust, that’s an escrow, that’s a mortgage, that’s a heloc, that’s an options contract, it’s a securities contract, like literally a hundred trillion dollars of the world is ‘here is a pile of money and here is a bunch of rules around that money and how that money can move around.’ So now what you have is an infrastructure where money is digital, computers can take ownership of money, and since computers are strictly better at executing instructions, it is such a perfect match for this hundred trillion dollar slice of the world that has previously been untouched because software couldn’t actually solve those problems natively that we think over the next 20 to 30 years this programmable money stack is just going to eat up that 100 trillion dollars of the world. It feels to us a lot like the early 1990s…” (14:10)
Danny Zuckerman On the Limits of What Can Be Built: One final, and important note on the nature of a comprehensive digital infrastructure inversion is the new opportunities created therein that might have been previously unimaginable or impractical. Danny Zuckerman, Co-Founder of 3Box explains this when he says:
“Basically anything that you can think of is buildable now. There are types of experiences that were just completely impossible a few years ago, but with the speed of what people are building in the blockchain ecosystem and in the web3 ecosystem more broadly, it’s basically possible to piece together any set of experience that you have seen online into a much more interoperable holistic experience, and whether that’s through some of the app building platforms that are gaining steam…through assets and NFTs on blockchains, through composable data, you can start to design things that are maybe not complete yet, but show the future, and I think are going to come very fast. So if you are curious about it, just start building and if you can think about it, start poking around in fun ways to build it.” (35:53)
Overview: The history of innovation and technological development contains many lessons for understanding current innovations launching today. What technologies from the steam engine, to the automobile, to the original internet demonstrate is that: (1) New technologies require time to diffuse into the mainstream; (2) They often must be refined and simplified for mass appeal; And (3) the speed with which they can diffuse is often correlated with how easy it is for someone to access and engage with the technology itself.
Deployment Time and Productivity Gains: Economic History has demonstrated at length that innovation and deployment of new technologies takes time to diffuse and become valued within a society or context. For the Steam Engine,“social savings” due to steam engine improvements remained stagnant at 0.3% per year between 1830 and 1850. It took more than 50 years for widespread adoption to occur across the most important commercial facets of society. The incremental adoption indicates that any technology needs to be able to ‘fit’ into the world in which it has been created – and this process takes considerable amounts of time.
Usability and Mass Appeal: In the case of the automobile, it is evident that usability and mass-appeal were necessary for the technology to start its diffusion process into the world. While the automobile was credited as being invented in 1886 by Carl Benz, most economic historians consider the creation of the Ford Motor Company in 1904 as the first major development in the commercialization of the technology. Notably, Ford built his company to “To create a reliable, low-cost, easy-to-operate and easier-to-fix device for the masses.” By 1927, Ford had sold more than 15 million cars.
The Acceleration of Technological Development: On the brink of what has been coined a ‘4th Industrial Revolution’, it is important to understand that technological innovation is developing and diffusing more rapidly than at any other time in history. Open source, crypto-economic protocols are prime candidates for facilitating this diffusion as they very often operate as a base layer for more complex and integrated solutions or applications (say, for instance, with the Internet of Things, AI, or automated robotics). Blockchain-based cloud platforms are very much the general purpose technology that has the capacity to be applied widely and in tandem with other technologies as this fourth industrial revolution accelerates.
“We are so early in the development of this, that just because the first 30 or 50 million did a thing, doesn’t necessarily mean that the next two billion people will do that thing. And history of technology tells us that over and over again…I tend to think as an investor, probabilistically speaking, the term profiles are such that it makes sense to have a lot of exposure to things that are running at those same objectives, but are not Bitcoin or Ethereum. So in the case of DeFi, yes, I think it is entirely possible that we don’t know what the killer Apps are yet, or that the killer apps have scaling challenges when it comes to Ethereum, and actually some other platform is able to bootstrap enough network security that they can build those sorts of applications, and because it is so much easier to get money in the door that the liquidity feedback loop ends up being faster and faster on a new platform. And ends up eclipsing Ethereum in the next three to five years.” – Avichal Garg, Building the Open Web Podcast Episode 7.
Argument 2: NEAR Protocol is Uniquely Positioned To Lead This Revolution
Define NEAR Protocol – A dynamically sharded layer one blockchain-based cloud platform, built with usability and scalability in mind.
Overview: NEAR is a dynamically sharded blockchain-based cloud platform that is designed to scale according to demand, with low transaction costs, and built-in incentives for developers. NEAR emphasizes usability first, in both its account model design and in offering developers the ability to build dApps on NEAR in both AssemblyScript and Rust. As such NEAR has been built to be easily understood by existing Web2 developers, as well as users familiar with existing internet permission models.
In addition, NEAR Protocol has been launched with an accompanying Business Engine: The Open Web Collective Incubator, and a global development focus. In the context of Argument 1, NEAR approaches Web3 solutions with a win-win mentality, the capacity to easily scale, and with unrivalled incentive models to developers looking to build on top of it. NEAR in this context, is positioned to power the Open Web over the next 10 years and beyond as a truly permissionless cloud platform.
Premise 1: Protocol Design
Overview: NEAR is designed such that it can scale, at a low cost, and with low risk for users and developers. Most notably, the protocol has been built and launched in the full spirit of decentralization, to such an extent that a fully interoperable and permissionless bridge between NEAR and ETH is on the brink of public launch in the coming months. This is the first major consideration to keep in mind when evaluating the long-term potential of any blockchain protocol: How does the technical design facilitate durability and growth over time?
Dynamic Sharding: NEAR Protocol handles transaction loads via asynchronous sharding on its network. The nightshade consensus mechanism is designed to scale a single blockchain known as the Mainchain through consecutively adding shards in proportion to increased transaction loads. This model is one approach proposed to creating a robust and scalable blockchain infrastructure, that is capable of handling a high throughput of transactions at a low cost (less than 1 cent per transaction). The value in the context of making an argument for the viability of NEAR Protocol, is that in itself, it has been designed to scale – the technical design of the protocol is such that it is capable of handling a global capacity load on par with existing centralized financial infrastructure: NEAR has been built to last.
Low Transaction Fees / No Overpaying: Transaction fees on NEAR are priced in a predictable manner, that does not inflate with increased usage. The protocol has also been designed such that it is not possible to overpay a gas fee: anything paid beyond the required amount is returned to the account of the payer. Such a model for transaction fees makes NEAR optimal for usage and attractive to developers. This is especially the case for the nascent yet fast growing NFT market as well as other core Web3 verticals including gaming and DeFi.
NEAR – ETH Decentralized Interoperability: The NEAR team has built and is in the process of finalizing the launch of a fully decentralized NEAR – ETH Bridge from which tokens between platforms can be independently moved by developers, users, and projects. This bridge is significant insofar as it: 1) Provides a pathway for projects (NFT’s, DeFi, etc.) to migrate value from Ethereum onto NEAR in the event of unreasonable gas fees on the former and 2) Pioneers one of the industry’s first fully decentralized bridges from which interoperability between platforms can be established and scaled into the future.
Premise 2: Usability and Incentives
Overview: Making it easy for existing developers to build on NEAR has been a major consideration of the NEAR team in their design of the protocol. As they explain it, NEAR puts usability first. This is not only for developers, but also for users. Similar to parallel enhancements that made the internet more consumer-friendly, NEAR brings a number of first-time enhancements to Web3 that make it more developer and user friendly.
Account Models and Function-Call Limited Permissions: NEAR puts usability first. This is manifested in a number of ways, but the most notable pertain to the account model structure as well as built-in advanced permissions that allow users to call contracts directly. Unlike other blockchain protocols, accounts on NEAR are denominated in names as opposed to hashes of alphanumeric characters. Sub-accounts can be created by master accounts, while standard Single Sign-On login options make handling an account more natural to existing Web2 users. Function-Call Limited Permissions allow developers to call contracts on sub-accounts, such that gas can be automatically pre-paid from dApps ahead of time. Technicalities aside, these features illustrate the thoughtful design that has gone into making NEAR protocol Usabile for Web2 developers as well as the future mass users interested in different solutions built on top of the protocol.
Developers Take 30% From Their Contracts: The NEAR website explains this feature most clearly: “Contracts are rewarded with 30% of the gas fees they generate, giving developers an immediate business model for apps and infrastructure.” This is a unique feature from all other existing layer 1 protocols: Developers, Entrepreneurs, and new projects that migrate to NEAR have a direct incentive to build on the protocol – built into the core design – due to the fact that they will be rewarded 30% of the fees that cross their contracts.
Program in Rust and AssemblyScript: Making it easy to build blockchain-dApps is a key emphasis of NEAR Protocol. Developers from Web2 can quickly and easily code in Rust or AssemblyScript as opposed to a separate blockchain-specific language such as Solidity. In context of the macro transition discussed above, this is another key factor that makes NEAR usable for developers looking to easily transition from Web2 to Web3.
Premise 3 – Business Engine:
Overview: NEAR compliments its robust technical design and usability-first features with a strong focus on the global business landscape for Web3 applications. The Open Web Collective – an early stage incubator for future blockchain solutions – combined with the global focus of the NEAR team, notably in Asia as well as Silicon Valley, is a strong basis for the NEAR Business Engine.
The Open Web Collective: The Open Web Collective is a blockchain-agnostic incubator for early stage crypto projects. It is operated by core NEAR team members and takes applications on a rolling basis. In context of the development of the protocol, the Web Collective is an extremely unique business engine: It provides NEAR (as well as the general blockchain space) with a means by which new projects and ideas can be grown to scale from ideation with input along the way from experienced entrepreneurs in the space. The value here is that NEAR is able to reliably facilitate new projects, games, and startups in the coming future as the protocol and its community continues to grow. As the Web3 space matures, the OWC allows NEAR to harvest the next major trend.
Global Focus: Finally, what is often forgotten in Crypto is the global focus that any serious project must embrace. As Joyce Yang of Global Coin Research explains on Building the Open Web Podcast #23, “I think one of the reasons I invested in NEAR was that I knew you guys were globally minded in the first place. Illia spoke Chinese, and I see him in conferences there all of the time. To see a founder engaged with the global community regardless of geography is something worth learning from.” The NEAR team spans across the globe, while the NEAR community – including Guilds – continue to expand on all continents. Such a focus means that NEAR is well positioned and actively engaging the solutions of tomorrow and the next ten years irrespective of geographical location.
Many may be inclined to respond to this argument by focusing on the merits of other Layer 1 Protocols in comparison to NEAR. As stated above, NEAR is a collaborator and not a competitor of such protocols. What differentiates NEAR as a protocol is its capacity to facilitate existing Web2 adoption into a future of decentralization and self-executing software in an equitable, familiar, and mutually incentivized manner. The fundamental premise of 4NTS is that NEAR is Building the Open Web – and as such, is optimally positioned to lead the impending digital revolution and its accompanying infrastructure inversion. This premise is based on both technical and historical factors.
The context of this revolution is clear: Cryptocurrencies and open-source blockchain protocols are entering a new market cycle of interest and speculation. NEAR Protocol is uniquely positioned to handle such interest for both users and consumers, and with a global focus. As a young protocol that is capable of scaling according to demand, there is almost no better time to become a community member, stake tokens, build dApps, and generally start participating in an open and inclusive Ecosystem building the internet of value.
For comments and questions, please reach out to email@example.com
NEAR Without The Noise is a Community-Run Ecosystem initiative developed and supported by the NEAR Team and 4NTS Guild. Once a week on Thursday at 4pm CET time, 4NTS will host a 45min to 1 hour discussion with a person or project building on or involved in the NEAR Ecosystem.
These talks are meant to be informal and substantive. Community members are able to actively participate – ask questions, share their point of view, or passively listen as different speakers and topics catch-up with the community on where they are at, how their project is developing, what they have been focused on recently, and more. Talks might involve AMA’s, Product Demos, Workshops on Onboarding to a Particular App or simply a casual conversation.
The goal of these talks is to cut through the noise and deliver quality information and personal insight from the NEAR Ecosystem to the larger cryptocurrency community. Prepare to ask questions, hear about what is actually happening, and get an idea about what is in the pipeline across the NEAR Ecosystem!
Peter and Jasper: Building Flux, The Vision and Opportunity of Open Markets – Thursday October 22nd.
Future Topics in the Pipeline Include: Dates TBD!
The Rainbow Bridge in Context: Why Does It Matter?
Validating on NEAR: The Details For Token Holders and Validators with Dokia and Stardust
What’s Building on NEAR?
Introducing GooGuild with Rune: Why Build on NEAR as a Dev Team?
NFT’s and their future on NEAR: With Mintbase and Nate Geier
Designing Web3: With The NEAR Design Guild and NEAR’s Jake Stutzman