We are really happy to share the news today that we have recently joined Metastable, Pantera Capital, ACapital, Accomplice, Multicoin Capital, Coinbase Ventures, Scalar Capital, Amplify Partners and a few others in the $12.1m financing round of Near, creators of NEAR Protocol.
At Greenfield we are committed to making long term bets on early developer teams building towards an open, decentralized and more robust architecture of tomorrow’s web — and that is exactly what the team at Near is working on.
Today we interact with and connect to the internet every day, every hour or even every other minute using all sorts of products and services across many different devices. The internet as we know it today, has evolved over the past decades from an open and browser-centric Web 1 in the 1990’s to a more closed and rather app-centric Web 2 in the mid to late 2000’s.
During the first era of the internet, the web was quite open — the rules of the system were clear, transparent and predictable. Developers mainly relied on open protocols and standards, which were developed and maintained by the wider web community. Over the years the early web companies grew into large platforms and developing web based products consolidated around these very platforms, in particular on mobile. The web as we know it today turned into something that is built upon silos and proprietary, centralized and walled systems. Many of these incumbent platforms were and are driven by network effects — and as they grew over the years, their power over users and developers increased and in many cases transitioned from attracting to extracting users and from cooperating to competing with third parties.
Enter Smart Contract Platforms.
Trust is an essential element in today’s web economy — trust is a value proposition and something that the web allowed to scale. I might not trust the taxi driver in Istanbul or the landlord in Barcelona, but I trust Uber and Airbnb in connecting me to trustworthy people on the other end. But trust on the web also comes at a price.
Web 3 as a whole and blockchain-based smart contract platforms in particular set out to automate and decentralize trust-establishing processes and eventually commoditize trust on the web. But Ethereum in its current version and many other first generation blockchains suffer from a scalability trilemma, as such that they can for the most part only optimize towards two and have to sacrifice on one of the three properties: scalability, decentralization and security. Many networks sacrifice on scalability and a few on decentralization and eventually security.
Besides scalability, usability is another big issue that has kept today’s smart contract platforms from reaching mainstream adoption. Onboarding users to crypto, managing private keys and gas/transaction fees are only a few reasons why user experience in Web 3 is not (yet) anywhere near what we are used to from existing Web 2 services.
Enter NEAR Protocol.
In technical terms, NEAR Protocol is a sharded, proof-of-stake (PoS) blockchain. It is solving the scalability problem of blockchains by enabling parallel execution of code (sharding of transaction processing) as well as parallel data storage (state sharding), which scales the network capacity linearly with the number of participating nodes. State sharding is crucial to enable a broad set of machines (such as mobile phones in the longer term) to participate in consensus and thus enlarge the possible set of participants and even further decentralize the network.
Their Nightshade consensus algorithm limits energy consumption by replacing computationally expensive proof-of-work (PoW) with PoS-based security deposits in the form of tokens as a sybil control mechanism. The system is byzantine fault-tolerant, meaning that it is resistant against up to a third of the nodes being malicious actors, while maintaining permission-less participation and strong decentralization, which differentiates them from projects that attempt to scale by sacrificing on decentralization.
Beyond their focus on scalability, the Near team puts a very strong emphasis on usability and creating a very developer-friendly experience. Onboarding users by letting them transition from the highest usability and low security to the highest security and low usability as their engagement with the system increases over time, is only one of many concepts that differentiates the user experience of both end users and developers with NEAR Protocol from many other systems.
What really stands out is the team’s amazing technical talent — Alex and Illia have not only assembled a strong development team which includes an ACM ICPC World Champion and Gold Medalists but also deep experience in building a sharded database from their time at MemSQL.
We’ve been impressed by the team’s technical thought leadership (really recommend watching some of their recorded whiteboard sessions) and execution from the first time we met them at ETH SF late last year and couldn’t be more excited to join their journey going forward.
If you want to learn more about NEAR Protocol you can check out their blog or follow them on Twitter — for builders go check out their beta program.