Both the Near Protocol and Polkadot are blockchains that perform at a very high level but which is better? Which has the better technology and which proves to be a better investment heading into 2023? In this article we dive into both a technical and fundamental analysis to find out the answers.
Near vs Polkadot
What is Near?
Near is an up and coming decentralized layer 1 blockchain that prides itself on its fast transaction speeds and low transaction fees. Near runs of a proof of stake consensus mechanism using its own unique sharding process to offer DeFi and other dApps at fast and low costs to users.
Built to compete with Ethereum and other networks offering smart contracts, Near focuses on offering a user friendly experience aimed at the masses alongside a developer friendly playground allowing for developers to build and launch dApps on Near with ease.
Nears native token NEAR is used to pay for transaction fees and storage, as Near runs on a proof of stake mechanism users can also stake their NEAR tokens to help the network stay secure and process transactions.
Near was in a sense built as a competitor to Ethereum to try and solve the congestion issues Ethereum has experienced and provide both users and developers with a decentralized and scalable network, Near has approached this task with its own unique consensus mechanism called sharding. Through sharding Near is able to lessen the load on the network by splitting the network into shards and allowing each shard to run a separate part of the network code allowing multiple actions to be able to be run in parallel with each other.
Near Transaction Speeds
Near can achieve fast transaction speeds and finality through its POS consensus which allows validators to process transactions rather than miners on a network such as Ethereum. Near has a finality of just 2.4 seconds making it one of the fastest layer 1 blockchains in the space. This is a transaction speed five times faster than its competitor Ethereum.
Near Transaction Speeds via @Near_daily
Near Transaction Fees
Through Nears POS (proof of stake) and sharding mechanisms Near is able to process transactions at a fraction of the cost of other layer 1 networks such as Ethereum. When a transaction is made different validator nodes process it, these nodes are made up of staked NEAR which can be participated in by every day users.
Nears gas or transaction fees work quite differently from most other blockchains, rather than the fees being paid out to the validators nodes the gas is used as a developer incentive with 30% being paid out to the developer of the smart contract, this encourages development, and the other 70% is burned, constantly shrinking the total supply of NEAR.
But how do validators get paid then? Validators on Near receive rewards independent from the gas fees. In exchange for validating the network and keeping it secure, validators on Near are rewarded with a target number of NEAR each epoch, this target amount is calculated to equate to 4.5% of the total supply annually.
The Near gas fees are not a flat rate and fluctuate based on a number of factors, however you can expect to pay anywhere from a couple of cents per transaction up to $0.50 at the most, this is paid in NEAR.
Near has a thriving ecosystem made up mostly of DeFi and NFT dApps, with over 18M wallets and averaging 300,000 transactions per day Near quickly built a strong community of users and developers. Near currently has 750 active projects and 125 DAOs on the network, this is fueled by fast transaction speeds, low transaction costs, its user friendliness and the grants that Near offers to projects to help them build on the network.
Near 24hr Transactions
What is Polkadot?
Polkadot is a blockchain built to help unrelated networks connect data and communicate with each other, one of Polkadots main goals is cross chain interoperability. It was built for its scalability, security and as an alternative to other blockchains such as Ethereum.
Polkadot runs a proof of stake consensus mechanism which uses validators to process transactions and keep the network secure, similar to how Near operates. The big difference between how the Polkadot network and the Near network run is that Polkadot uses what they call a relay chain and parachains to run. The relay chain is the main Polkadot chain while parachains are user created chains that run parallel with the relay chain.
Polkadot Transaction Speeds
Polkadot has been built for its speed and achieves this through a unique method which they call parachains. Parachains are user made chains that run parallel with the main Polkadot chain which is called the “relay chain”, due to these parachains the network can process a lot more information parallel to itself through parachains rather than the relay chain.
Meaning Polkadot can process over 1,000 transactions per second, compared to Ethereum which sits at around 7 transactions per second. In theory the more parachains that are created by users the more transactions the network will be able to process. Polkadot has a finality time of 12-60 seconds and a block time of 12 seconds.
Polkadot Transaction Fees
Polkadots transaction fees are paid in its native token DOT and fluctuate depending on the complexity of the transaction and also the current volume of transactions being made, if the network is congested the transaction fee will be higher than if the network is not experiencing much traffic.
Through Polkadots proof of stake consensus mechanism paired with its parachain technology, transaction fees can be as low as just $0.10 per transaction which is a vast improvement from Ethereum which can range right up into the hundreds when the network is congested.
Due to Polkadot being an interoperable chain that is helping build towards a multichain future it has developed a very vast ecosystem with over 180 projects built of Polkadots relay chain and dozens of others built on parachains.
So which is a better blockchain? Near or Polkadot?
Well, it all depends what you want to use it for. As we can see from the tech Near is a better blockchain for everyday use such as trading NFTs and participating in DeFi with its low transaction costs and fast transaction speeds, meanwhile Polkadot is working towards something bigger, building an interoperable ecosystem.