Recent report from Bank of America (BAC) stated that the Near protocol is one of a new wave of blockchains that are employing creative strategies to improve the “tradeoff between scalability, decentralisation, and security.” The report reflected that developers will likely be interested in blockchains like Near that expand functionality and reward development in the near future.
The analysts from the bank reflected that, “Over the longer term, we expect blockchains that prioritise usability and effectively market themselves to gain market share by attracting a robust and diverse ecosystem of applications that drives adoption, network effects and cash flows.”
The report also said that the sharding method enacted by the Near protocol “mitigates common scaling issues related to increasing centralization due to pooling and decreasing security due to poorly aligned incentives.” Even though they took this stance, the BAC were careful to pick any certain winner or loser.
The second largest blockchain in the world, Ethereum is not nearly as effective at storing data as a centralised web service. Before Ethereum’s system for managing decentralised applications becomes widely used, it has to be able to hold more data, and sharding is one potential solution. Thus, it is a method to split the structure of the cryptocurrency into smaller units in order to accommodate the platform.
Moreover, the report calls this new generation of software powering third-generation blockchains such as Cardano, Solana, Polkadot, Tron, Avalanche and Near as “immature” and that their development is still “in the first innings.” However in the near future, developers are expected to become interested in blockchains like Near that expand functionality and reward development.
Despite its emphasis on accessibility, creative design, and ecosystem of more than a thousand apps, Near development slowed down in 2022 compared to the year before, the bank says. The report also added that, “applications are no longer driving accelerating user growth,” as from the second quarter of last year, the arrival of new users has decreased and transaction fees have decreased.