NEAR Protocol (NEAR) sustainability report

Near Protocol is present on the following networks: Near Protocol.

The NEAR Protocol blockchain network operates on a distinctive consensus mechanism that synergistically combines the principles of Proof of Stake (PoS) with a proprietary innovation known as Doomslug, further enhanced by dynamic sharding through Nightshade. This multi-faceted approach is engineered to deliver high efficiency, rapid transaction finality, and robust security across the network. At its foundation, the system relies on Proof of Stake, where participants, termed validators, secure the network by staking their native NEAR tokens. The greater the stake, coupled with community trust, the higher their probability of being chosen to propose and validate blocks.Doomslug significantly accelerates transaction finality. Unlike single-stage block confirmations, Doomslug introduces a two-stage process. Initially, validators propose new blocks. Finality is achieved swiftly when two-thirds of the participating validators formally approve the proposed block, making confirmed transactions irreversible and preventing potential forks. This rapid finality is crucial for applications demanding near-instant confirmations. Complementing this, NEAR integrates Nightshade, a dynamic sharding technique. Nightshade segments the network into multiple shards, allowing for the parallel processing of transactions. Each shard handles a distinct subset of transactions concurrently, and their respective processing outcomes are then consolidated into a single "snapshot" block. This dynamic sharding is vital for scalability, enabling the network to efficiently manage increasing transaction volumes and user demand without compromising performance.The consensus process also emphasizes decentralization and fairness through epoch rotation. Validators are regularly reshuffled across distinct intervals called epochs. This rotation mechanism ensures a balanced distribution of block proposal opportunities and validation responsibilities among eligible validators, mitigating centralization risks and promoting sustained network resilience. By integrating PoS for economic security, Doomslug for fast finality, and Nightshade for scalable throughput, the NEAR Protocol establishes a high-performance and secure blockchain environment.

Near Protocol is present on the following networks: Near Protocol.

The NEAR Protocol blockchain network employs a comprehensive suite of economic mechanisms designed to ensure network security, incentivize active participation from its community, and manage resource allocation efficiently. A core incentive is the staking reward system, where validators and delegators are compensated for their role in securing transactions. Validators, selected based on their staked NEAR tokens and community trust, receive a share of newly minted tokens, constituting about 90% of the approximate 5% annual inflation. They earn these rewards for proposing and validating blocks. Similarly, token holders who choose not to operate a full validator node can delegate their NEAR tokens to active validators, thereby contributing to network security and earning rewards proportional to their delegated stake. This delegation model fosters broader participation and strengthens the network's overall decentralization.To uphold network integrity, NEAR Protocol implements a robust slashing mechanism. Validators engaging in malicious activities, such as incorrect validation or dishonest behavior, face economic penalties, including the deduction of a portion of their staked tokens. This serves as a powerful deterrent against harmful actions, ensuring validators operate in the network's best interest. Additionally, the network promotes fairness and prevents undue concentration of power through regular epoch rotations. During these predefined intervals, validators are periodically reshuffled, and new block proposers are selected, maintaining a healthy balance between network performance and decentralization.Regarding applicable fees, the NEAR blockchain charges users for transaction processing and data storage, paid in NEAR tokens. A unique aspect of its fee structure is the burning mechanism for transaction fees, which reduces the total circulating supply of NEAR tokens over time, potentially introducing a deflationary effect. While a portion of these fees is burned, the remaining part is distributed to validators as additional compensation, providing a continuous incentive for network maintenance. Furthermore, the protocol imposes storage fees based on the amount of blockchain space consumed by user accounts, smart contracts, and associated data. Users are required to hold NEAR tokens as a deposit commensurate with their storage usage, which encourages efficient resource management and helps prevent network spam. This dual system of incentives and fees creates a self-sustaining economic model for the NEAR Protocol.

Near Protocol is present on the following networks: Near Protocol.

The methodology for assessing the energy consumption of the NEAR Protocol network relies on a "bottom-up" approach, meticulously aggregating data across its various operational components. This method primarily considers the network's nodes as the central contributors to overall energy usage. The fundamental assumptions underpinning these calculations are derived from empirical findings obtained through a combination of public information sources, proprietary in-house crawlers, and publicly available open-source crawlers. These tools are instrumental in gathering essential data about the network's operational footprint.A critical determinant in estimating the hardware deployed within the network is the specific computational requirements necessary to run the client software. Based on these identified requirements, the energy consumption of the corresponding hardware devices is rigorously measured in certified test laboratories. This ensures accuracy and consistency in energy attribution. Furthermore, when calculating energy consumption, the Functionally Fungible Group Digital Token Identifier (FFG DTI) is utilized, where available, to precisely identify and encompass all relevant implementations of any crypto-asset within the network's scope. These mappings are regularly updated, leveraging data from the Digital Token Identifier Foundation, to maintain current and accurate representations.The information pertaining to the hardware used and the total number of participants in the network is built upon assumptions, which are diligently verified using the best available empirical data. A general underlying premise is that network participants are largely economically rational actors. In adherence to a precautionary principle, conservative estimations are favored when uncertainties arise, leading to higher projected adverse impacts to ensure a robust and responsible assessment of energy consumption. This comprehensive methodology allows for a detailed and conservative estimation of the NEAR Protocol network's energy footprint.

Near Protocol is present on the following networks: Near Protocol.

To accurately determine the proportion of renewable energy utilized by the NEAR Protocol network, a systematic methodology is employed focusing on the geographic distribution of its operational nodes. The initial step involves identifying the precise locations of these nodes using a combination of public information sites, advanced open-source crawlers, and internally developed specialized crawlers. This comprehensive data collection ensures a broad and accurate understanding of the physical presence of the network's infrastructure.In instances where precise geographic information for certain nodes might be unavailable, the methodology incorporates a fallback mechanism. It leverages data from reference networks that are deemed comparable to NEAR Protocol in terms of their incentivization structures and underlying consensus mechanisms. This comparative analysis helps to fill data gaps and provide a reasonable proxy for renewable energy usage in such cases.Once the geographical data for the nodes is established, this geo-information is meticulously integrated with publicly available datasets from reputable sources, notably "Our World in Data." This integration allows for the correlation of node locations with regional energy grid compositions and the prevalence of renewable energy sources in those areas. The final aspect of this methodology involves calculating the energy intensity of the network. This is defined as the marginal energy cost incurred with respect to processing one additional transaction on the NEAR Protocol blockchain. This metric provides a granular view of the energy efficiency per unit of network activity. For detailed information regarding the underlying energy data, the following sources are utilized: Share of electricity generated by renewables – Ember and Energy Institute. This rigorous approach ensures a transparent and verifiable assessment of renewable energy integration within the network's operations.

Near Protocol is present on the following networks: Near Protocol.

The assessment of Greenhouse Gas (GHG) Emissions for the NEAR Protocol network follows a structured methodology that prioritizes the precise geographical identification of its operational nodes. This process begins by actively determining the locations of all network nodes, utilizing a combination of publicly accessible information sites, sophisticated open-source crawling tools, and specialized crawlers developed in-house. This multi-pronged data acquisition strategy aims to gather comprehensive location data for the network's infrastructure.Should specific geographic distribution data for certain nodes prove unobtainable, the methodology incorporates the use of reference networks. These are carefully selected based on their similarity to the NEAR Protocol in terms of their incentive structures and consensus mechanisms, allowing for an informed estimation of GHG emissions in the absence of direct data. This comparative approach ensures that even with limited direct information, a credible assessment can still be made.The collected geo-information is subsequently integrated with extensive public datasets, prominently featuring data from "Our World in Data." This integration enables the cross-referencing of node locations with regional carbon intensity data of electricity generation, providing a basis for calculating the associated GHG emissions. A crucial metric derived from this methodology is the GHG intensity, which quantifies the marginal emission attributable to processing one additional transaction on the NEAR Protocol network. This metric offers insights into the environmental footprint per unit of network activity. For detailed data on carbon intensity, the following resource is referenced: Carbon intensity of electricity generation – Ember and Energy Institute. This rigorous and transparent methodology underpins the network's efforts to measure and report its environmental impact.