In brief
- NEAR Protocol announced it had raised $21.6 million in a funding round led by a16z.
- NEAR also launched a proof-of-authority version of its mainnet today as part of a phased release.
- The full blockchain aims to be a scalable network that allows developers to build decentralized apps.
Every few months, a new project is christened an "Ethereum killer." While the massive network still stands tall, Ethereum has a glaring weakness: It's taking its time getting the network to scale.
The NEAR Protocol is the newest Ethereum killer and it's taking aim at Ethereum's soft spot. A proof-of-stake network that uses sharding to tackle blockchain's scalability issues, NEAR launched its network today and subsequently announced it had raised $21.6 million in a funding round that featured Andreessen Horowitz's a16z crypto fund.
On April 30, a16z said it had created a $515 million fund for blockchain and crypto networks. It was particularly interested in DeFi, payment systems, and alternative monetization models for the Internet. It wasted little time in targeting NEAR, which also received investments from Blockchange, Distributed Global, Electric Capital, Libertus, and Pantera Capital.
NEAR, in a nutshell, is a platform for building a variety of decentralized applications—not just digital currency. According to a press release, "NEAR provides the scale and programmability to allow any data—whether digital currency, karma, gaming items or stock certificates—to become a fully portable, programmable and tradable asset."
The scalability is key. NEAR explicitly aims to avoid network congestion via sharding, which has been part of the plan for Ethereum 2.0 since at least 2016 but has yet to be implemented. The proof-of-work network’s transition to proof of stake is taking a while.
NEAR appears to have beaten Ethereum to the punch, boasting on its website that "the NEAR team has previously built one of the only sharded databases in production at scale today (which is used by Uber, Goldman Sachs, and Comcast)."
But not everyone views NEAR as directly competitive with Ethereum. Spencer Noon, head of crypto investments at DTC Capital, tweeted earlier today that he is an investor in both ETH and NEAR and views the networks as complementary pieces in the crypto ecosystem.
Congratulations to the @NEARProtocol team for their newest round of fundraising! As a $NEAR and $ETH investor though, can't say I agree with @TechCrunch's characterization that launch is a "black eye" for Ethereum. I believe both networks will complement each other in the future. https://t.co/UmK7i5783d
— Spencer Noon (@spencernoon) May 4, 2020
Though the NEAR Protocol mainnet went live today and has already hit a million blocks (blocks are created quite a bit quicker than on the Bitcoin or Ethereum protocols), it currently has limited functionality. During this proof-of-authority phase, the network is run by just four nodes and a limited number of validators.
NEAR said it will distribute the funding announced today to continue its rollout plans. Subsequent phases will theoretically lead to a community-run network and remove current restrictions on NEAR tokens. The full blockchain could be operational as soon as July, according to NEAR's timeline.
That would be a sweet spot for NEAR to be in. So far, so good.