THE TRINITY OF NEAR
The growth and popularity of NEAR have been on a steady trend since its launch in early 2020. With the vision to onboard the first 1Billion web3 users, the first question is “how would NEAR achieve this vision?”.
In this article we will explore NEAR, Aurora and Octopus Network from a technical perspective, and a business perspective.
Grab a cup of your favorite beverage and enjoy the reading.
In the simplest form, NEAR is a highly scalable blockchain protocol with a sharded runtime and database that emphasizes ease of software development and use.
NEAR node consists roughly of a blockchain layer and a runtime layer. These layers are designed to be independent from each other — the blockchain layer can in theory support runtime that processes transactions differently, has a different virtual machine (e.g. RISC-V), and a different economic model. On the other hand the runtime is oblivious to where the transactions are coming from. It is not aware whether the blockchain it runs on is sharded, what consensus it uses, and whether it runs as part of a blockchain at all.
This architecture makes NEAR’s maximum transaction speed to be theoretically unlimited.
NEAR core documentation provides more insight to NEAR core functionalities and design.
NEAR software development kit (SDK) provides a simplistic level of abstraction on top of NEAR which greatly simplifies the development of applications on NEAR, and provides a generally good developer experience. The NEAR SDK and its documentation is gradually becoming popular for the vast amount of associated developer resources and documentation provided directly by NEAR core contributors and NEAR developer community.
The NEAR SDK also provides an all in one development environment that also allows developers to choose how to implement their application UI.
NEAR SDK documentation will quickly get you up to speed to build your first application.
Aurora is a layer 2 (L2) protocol on NEAR, that currently allows developers to execute Ethereum contracts in a more performant environment. The goal of Aurora is to create an interoperable future where the gaps between blockchains, developers and users are bridged. From a bird eye view, Aurora is composed of an EVM and a bridge called Rainbow Bridge.
The image below gives a schematic description of Aurora.
Due to Aurora EVM, Ethereum native applications can seamlessly be ported to Near’s L2-like network that is built as a smart contract on NEAR. Developers can enjoy familiar Ethereum tools (like metamask and hardhat) when working with their Solidity smart contracts on Aurora. To provide a smooth experience for dapps’ users, the base fee of Aurora is ETH.
Rainbow bridge allows users to transfer assets between Ethereum, NEAR, and Aurora. Currently Ethereum ERC 20 tokens can be bridge to NEAR and Aurora. NEAR -> Ethereum bridge is currently on the way.
The bridging mechanism of Rainbow bridge is similar to many other bridges that locks a token on one side and mint corresponding amount on the other side of the bridge.
Aurora has integrated several projects including Chainlink and Flux — for oracle service, Machina — a storage solution, The Graph — for data indexing, and Etherscan (Aurorascan).
Aurora developer documentation is the best resource to get started with Aurora.
Octopus Network is a NEAR-based multichain interoperable network for launching and running substrate-based, application-specific blockchains, also known as appchains.
The core of the Octopus Network is the Octopus Relay — a set of smart contracts running on the NEAR blockchain, that implements a (financial) security leasing market. The appchains sit on the demand side of the market, and pay rent in their native tokens to lease (financial) security from Octopus Token($OCT) holders. $OCT holders that delegate their $OCT by staking on appchains.
The Octopus Relay enables appchains’ interoperability with NEAR protocol, and Ethereum via the Rainbow Bridge. Additionally, appchains can utilize an out-of-box Inter-Blockchain Communication (IBC) pallet to connect with any IBC enabled blockchains directly. Thus, assets issued on Ethereum, NEAR, or any IBC enabled blockchain transfer into Octopus Network appchains trustlessly. Conversely, assets issued on appchains can be transferred trustlessly to Ethereum, NEAR, and any IBC enabled blockchain.
I have described in a previous post how appchains differ from other substrate-based blockchains in a different post.
The analysis of NEAR, Aurora and Octopus can not be completely covered in this article. I will draw inference from publicly available information, funding rounds, steady progress of the projects to offer my one cent.
You may be well aware that NEAR, Aurora, and Octopus are run as 3 independent projects by 3 independent but highly collaborative teams.
NEAR was funded by Alexander Skidanov, Illia Polosukhin in 2017. Have had over 4 funding rounds and raised over $450MM to date, however no valuation has been declared by NEAR. NEAR technology as well as its operations and management is fairly stable. The focus has moved from building out the project to actually seeking external parties to use the technology. NEAR has over 200 projects and has given over $1MM to different promising projects (including Aurora and Octopus Network) as grants. NEAR has enjoyed newsworthy partnerships since the last quarter of 2021 with projects including Consensys, Terra, and Chainlink. $NEAR is currently a moderately volatile asset. With over 60% have minted, it has grown over 2000% since launch and does not seem to significantly decline. $NEAR has a market capitalization of over $10B, with over $100MM worth of $NEAR in exchanges.
NEAR is also backed by some of the biggest names in crypto VC including Electric Capital, Coinbase Ventures, MetaStable, and Scalar Capital.
From my perspective, NEAR is a fundamentally sound project, with a team that has continuously delivered since its launch. Although it has a comparable level of maturity with some of the popular public blockchains, it is yet to prove itself under duress.
Aurora is a direct descendent of NEAR. Launched barely one year after the launch of NEAR, Aurora has claimed the highest transaction on NEAR protocol from its 150+ projects. Aurora Inc. team was a spun off from NEAR Inc., composed of some of the best hands and heads in NEAR. Some of the team members include; Alex Shevchenko — CEO, and Arto Bendiken — CTO. Aurora has had 1 funding round and raised $12MM which will be directed towards developing the technology and bringing more talents to build Aurora. The rapid proliferation of projects is a testimony of the use of funds raised.
Aurora has also had several collaborations in partnership with NEAR to ease the developer and user experience on Aurora with projects including Consensys, Chainlink and Etherscan.
$Aurora is a low cap asset. With 2% in circulation, it has a market capitalization of over $240MM and over $6MM worth of Aurora is in exchanges. The tokenomics of Aurora is an unusual one that focuses on incentivising the team, investors as well as contributors.
To say the least Aurora is a continuously growing project that has positioned itself as an indispensable piece of an interconnected web3.
Octopus Network is the youngest of the three, however could be the one with the highest impact in web3. Octopus was launched in 2021 by Louis Liu, Julian Sun, and Mike Tang. Octopus directly compares to polkadot in terms of technology, however that’s where most of the similarity ends. Octopus is still a young start-up whose last funding round was series A and has raised $8MM. Octopus Network Relayer is stable and is under continuous development. Octopus currently has 2 appchains running on its network and has more than 5 in the deployment process. Due to the nature of Octopus technology, it is working closely with other prominent projects including Cosmos and Polkadot to deliver the best products.
$OCT is also a low cap asset. With over 48% in circulation, it has a market capitalization of over $110MM and over $1.5MM worth of $OCT in circulation. The tokenomics of Octopus Network favors early adopters and investors.
Aurora is currently backed by Electric Capital, Puzzle Ventures, Origin Capital and NEAR.
It’s obvious that Octopus is just getting started with a high growth potential and solid vision.
The trinity of NEAR — a scalable layer 1/0 blockchain, Aurora — an EVM and token portal, and Octopus Network — a highly affordable IBC compliant blockchain relayer is a trio to keep a close eye on.
Disclaimer: This article was written for NEAR Protocol Nigeria(NPK Guild). The information in this article is for educational purposes only and is not investment or financial advice. Please do your own research before making any investment decisions.