NEAR Protocol's Vision for Chain Abstraction and Improved User Experience

In a recent episode of Lightspeed Today, host Mert Mumtaz sat down with Illia Polosukhin, co-founder of NEAR Protocol, to discuss the project's innovative approach to blockchain scalability, interoperability, and user experience. The conversation delved into NEAR's sharding strategy, its plans for chain abstraction, and the intersection of artificial intelligence with blockchain technology.

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NEAR Protocol's Origins

NEAR Protocol's journey began in 2017 when Polosukhin and his team were working on an AI project called NEAR AI. Their goal was to teach machines to code, which at the time seemed like science fiction. To collect data for their modeling, they engaged hundreds of students worldwide to write code, descriptions, and comments. However, they encountered difficulties paying these contributors, especially in countries with limited banking access.

This payment challenge led them to explore blockchain technology as a solution for programmatic, micro-sized payments. Polosukhin explained:

"We need to send money to people programmatically easily and not think about if they have bank accounts and like whatever Swiss transfers and whatnot. And we're doing it at micro like at micro sizes, right? 15 cents."

Finding that existing blockchain solutions like Bitcoin and Ethereum had fees that were too high for their use case, the team pivoted to create NEAR Protocol. Their aim was to develop a blockchain that could scale to billions of users while providing a developer-friendly environment.

NEAR's Sharding Approach

One of NEAR's distinguishing features is its approach to sharding, a technique used to improve blockchain scalability by dividing the network into smaller, more manageable pieces. Polosukhin, drawing from his experience at Google and Microsoft, emphasized the importance of sharding in handling internet-scale data processing.

NEAR's sharding strategy, called Nightshade, aims to maximize performance while maintaining a unified user experience. Polosukhin described it as follows:

"Every account is an independent rollup or app chain or a blockchain. And this is what it gives you now is that you can put this account on a separate computer at any time. And, you know, it's storage and it's transaction processing happens there."

This approach allows for parallel processing of transactions across multiple machines while presenting users with the appearance of a single blockchain. The system dynamically allocates accounts to different shards based on their activity and resource requirements.

Stateless Validation and In-Memory State

NEAR has recently introduced a new feature called stateless validation, which addresses some of the challenges faced by other blockchains, including Solana. Polosukhin explained:

"Because we have sharding, we can limit the amount of size of state on each independent shard. And we just add more machines with kind of when it grows. So we can keep the whole state in memory, which obviously is way more performant."

This approach allows NEAR to overcome the bottleneck of state updates on hard drives, a common issue in blockchain systems. By keeping the entire state in memory for each shard, NEAR can achieve higher performance while maintaining scalability.

Chain Abstraction and User Experience

A significant focus of NEAR's development efforts is on improving the user experience through chain abstraction. Polosukhin emphasized the importance of hiding the complexity of blockchain infrastructure from end-users:

"I as a user experience is fragmented. I have 50 different windows with different wallets with different accounts. There's no notification. There's no way to keep track of what's going on. It's all not a really coherent experience."

To address this, NEAR is developing a blockchain operating system that aims to provide a holistic experience for using Web3 applications without requiring users to understand the underlying blockchain technology. This includes features like account aggregation, which would allow users to transact across multiple blockchains using a single NEAR account.

Data Availability and Rollups

NEAR has positioned itself as a competitive option for data availability (DA) in the growing rollup ecosystem. Polosukhin claimed that NEAR's DA solution is significantly more cost-effective than alternatives:

"When we benched it, we were 30 times cheaper than Celestia, 85,000 times cheaper than Ethereum. At the same time, because it's sharded, we already have 16 megabytes per second of data availability right now."

This cost-effectiveness, combined with NEAR's scalability and existing infrastructure, makes it an attractive option for rollup developers looking for a reliable DA layer.

Intersection of AI and Blockchain

Given Polosukhin's background in AI, the conversation naturally turned to the potential synergies between AI and blockchain technology. He identified several areas where these technologies could complement each other:

1. Cryptographic authentication for content to combat misinformation and manipulation.
2. User-owned AI models that can run locally on devices.
3. Provable execution of large AI models using zero-knowledge proofs and other cryptographic techniques.

Polosukhin emphasized the need for a "society operating system upgrade" to address the challenges posed by AI-generated content and misinformation:

"What we need is a cryptographic authentication so that whenever you look at content, like this video, for example, or audio you're listening, they're able to see like this is signed by Ilya, by Garrett and Mert, you can verify like that this is like authentic."

Challenges and Future Directions

When asked about the biggest challenges facing the crypto industry, Polosukhin identified three key areas:

1. Security: The frequency of hacks and fund losses remains a significant barrier to mainstream adoption.
2. Image problem: The speculative nature of the crypto market can overshadow genuine technological advancements.
3. Limited use cases: The industry needs to expand beyond token farming and basic payment settlement to connect more with real-life interactions.

Polosukhin expressed optimism that chain abstraction could help address some of these challenges by allowing developers to build on top of multiple ecosystems simultaneously, reducing the need for constant narrative shifts and speculation.

NEAR's Position in the Blockchain Ecosystem

While NEAR may not have garnered as much attention as some other blockchain projects in recent years, Polosukhin revealed that the team has been focused on driving mass adoption and working with projects that bring large user bases to Web3. He cited examples like Sweatcoin and Kaikhin, which have millions of monthly active users on NEAR.

The recent introduction of NEAR's chain abstraction vision and its efforts to interconnect with other blockchain ecosystems mark a new phase in the project's development. By positioning itself as a bridge between different chains and focusing on user experience, NEAR aims to play a crucial role in the next evolution of Web3.

Implications for Solana and Other Blockchains

While the conversation primarily focused on NEAR's approach, the insights shared by Polosukhin have implications for other blockchain ecosystems, including Solana. The emphasis on user experience and chain abstraction aligns with Solana's focus on performance and accessibility.

Solana's approach of maintaining a global state without sharding has allowed it to achieve high performance and atomic composability. However, NEAR's sharding strategy and focus on in-memory state management offer an alternative path to scalability that could inform future developments in the Solana ecosystem.

The competition in data availability solutions also presents opportunities for collaboration and innovation across different blockchain networks. As the industry moves towards greater interoperability, the advances made by projects like NEAR in chain abstraction and cross-chain communication could benefit the entire ecosystem, including Solana.

Conclusion

NEAR Protocol's vision for chain abstraction and improved user experience represents an important development in the blockchain space. By addressing key challenges such as scalability, interoperability, and ease of use, NEAR is working towards a future where blockchain technology can seamlessly integrate into everyday applications.

As the crypto industry continues to evolve, the insights shared by Illia Polosukhin highlight the importance of focusing on fundamental issues like security, user experience, and real-world utility. The success of projects like NEAR in tackling these challenges could pave the way for the next wave of blockchain adoption and innovation.

For the Solana ecosystem and other blockchain networks, NEAR's approach offers valuable lessons and potential avenues for collaboration. As the industry moves towards a multi-chain future, the ability to abstract away complexity and provide seamless user experiences across different networks will likely become increasingly important.

The conversation with Polosukhin serves as a reminder that the blockchain space is still in its early stages, with ample room for innovation and improvement. By learning from each other and focusing on solving real-world problems, projects like NEAR and Solana can contribute to building a more accessible, secure, and user-friendly Web3 ecosystem.

Facts + Figures

• NEAR Protocol launched its mainnet in 2020.
• NEAR currently has 4 shards and is planning to re-shard to 5 shards.
• NEAR has over 16 million mass actors and 1.8 million data actors.
• NEAR's data availability solution is claimed to be 30 times cheaper than Celestia and 85,000 times cheaper than Ethereum.
• NEAR currently offers 16 megabytes per second of data availability.
• NEAR has had over 48 protocol changes without interruptions for users.
• The Kaikhin app on NEAR has over 20 million monthly active users.
• NEAR raised an $800 million ecosystem fund.
• NEAR is planning to launch its new sharding design on mainnet in May.
• NEAR's blockchain operating system aims to abstract away blockchain complexity for users.
• NEAR's account aggregation feature will allow users to transact on multiple blockchains using a single NEAR account.
• Illia Polosukhin started diving into AI at the age of 14-15.
• NEAR conducted a series of "whiteboard sessions" with experts from various blockchain projects to inform their design.

Questions Answered

What is NEAR Protocol's approach to sharding?

NEAR Protocol uses a sharding strategy called Nightshade, which treats every account as an independent rollup or app chain. This allows for parallel processing of transactions across multiple machines while presenting users with the appearance of a single blockchain. The system dynamically allocates accounts to different shards based on their activity and resource requirements, enabling scalability without compromising user experience.

How does NEAR's stateless validation work?

NEAR's stateless validation allows block producers to store the entire state of their shard in memory, which significantly improves performance. Validators can then validate blocks without needing to have the full state available to them. This approach enables NEAR to overcome the bottleneck of state updates on hard drives, a common issue in blockchain systems, while maintaining scalability by adding more machines as the network grows.

What is chain abstraction and why is it important?

Chain abstraction is NEAR's vision for simplifying the user experience in Web3 by hiding the complexity of blockchain infrastructure. It aims to provide a unified interface for users to interact with multiple blockchains without needing to understand the underlying technical details. This approach is important because it addresses the current fragmentation in the crypto user experience, potentially enabling broader adoption of blockchain technology.

How does NEAR plan to improve blockchain interoperability?

NEAR is developing features like account aggregation, which would allow users to transact across multiple blockchains using a single NEAR account. Additionally, NEAR's blockchain operating system aims to connect developers and users to all blockchains and underlying hardware ecosystems. This approach to interoperability could facilitate seamless interactions between different blockchain networks without users needing to manage multiple wallets or accounts.

What are the main challenges facing the crypto industry according to Illia Polosukhin?

Illia Polosukhin identified three main challenges: 1) Security, citing the frequent hacks and fund losses as a significant barrier to mainstream adoption. 2) The industry's image problem, where speculation often overshadows genuine technological advancements. 3) Limited use cases, with the need to expand beyond token farming and basic payment settlement to connect more with real-life interactions. Addressing these challenges is crucial for the long-term success and adoption of blockchain technology.

How does NEAR's data availability solution compare to other options?

According to Polosukhin, NEAR's data availability solution is 30 times cheaper than Celestia and 85,000 times cheaper than Ethereum. NEAR currently offers 16 megabytes per second of data availability, with the potential to increase this capacity by adding more shards. This cost-effectiveness and scalability make NEAR an attractive option for rollup developers looking for a reliable data availability layer.

What is the relationship between AI and blockchain according to Polosukhin?

Polosukhin sees several areas where AI and blockchain can complement each other. These include using cryptographic authentication for content to combat misinformation, developing user-owned AI models that can run locally on devices, and creating systems for provable execution of large AI models using zero-knowledge proofs. He emphasizes the need for a "society operating system upgrade" to address challenges posed by AI-generated content and misinformation.

How has NEAR's focus changed in recent years?

While NEAR may have received less attention in the crypto narrative recently, Polosukhin revealed that the team has been focused on driving mass adoption and working with projects that bring large user bases to Web3. They've been collaborating with applications like Sweatcoin and Kaikhin, which have millions of monthly active users on NEAR. The project is now entering a new phase with its chain abstraction vision and efforts to interconnect with other blockchain ecosystems.