Through the consensus mechanism and multi-sharding architecture of NEAR, transaction costs can be significantly reduced and processing efficiency can be improved. This is particularly important for Rollup-like scaling solutions. For example, if Arbitrum publishes transaction data from Ethereum to NEAR, it can save $16.2 million in 10 weeks. This article is from zerokn0wledge.
Modular theory will reshape Web3
What can NEAR do?
Architecture of NEAR DA
Can the public chain NEAR become the main data layer for modular blockchains? This article will discuss from the perspective of data-driven NEAR DA.
Modularity, by dividing core functions into different interchangeable layers, has given rise to a future built on scalable suites of execution layers that are optimized at various levels of the tech stack to serve specific use cases or verticals.
While modularity allows for various network configurations, Rollup is perhaps the most well-known modular network design. Simply put, Rollup processes transactions off-chain in batches and then periodically verifies their validity on-chain.
In terms of specific designs, there are finer differences based on the location of the state verification mechanism and where Rollup releases state data. From the perspective of Ethereum-centered view, these details correspond to some key terms:
Validity Rollups: Data and verification state on L1 (validity proof)
Optimistic Rollups: Data and verification state on L1 (fraud proof)
Validiums: Data off-chain & verification state on L1 (validity proof)
Optimiums: Data off-chain & verification state on L1 (fraud proof)
For an overview of the overall architecture, please refer to the visual information in the figure.
So how does the NEAR Protocol serve these highly scalable, Rollup-based scaling solutions with modular extensions?
NEAR Fast Finality Layer: Faster and cheaper state verification
NEAR Data Availability (DA): More efficient data release
NEAR is a complement to Ethereum, not a competitor.
Next, let’s take a closer look at the data. In this article, we will not delve into the fast finality layer, instead, our data-driven analysis will take us into the rabbit hole of data availability.
The scalability bottleneck of Rollup solutions lies in the ability of the base layer to process the data released on-chain, and prior to EIP-4844, the cost of calling data (to release data to L1) accounted for 80-90% of the total cost of Rollup. In the past five months, Rollups on Ethereum have spent a total of 9,000-16,000 ETH on data availability per month. Assuming an average of 12,000 ETH per month, this corresponds to a DA cost of $42 million.
Why do Rollups spend so much money on this? Because Rollups need their state data to be available for calculation and verification. If the data is not available, no one can verify the chain, and the Rollup will shut down or be susceptible to attacks. Ethereum is one of the most secure and tested networks. However, this comes at a cost. Therefore, for many use cases, the aforementioned Validium and Optimium designs are more feasible. By releasing data elsewhere, these network designs can significantly reduce transaction costs and increase throughput. However, while centralized off-chain committees provide an easily implementable alternative, they introduce significant trust assumptions. This is why a decentralized, modular DA layer protected by a globally distributed set of validators and cryptographic economic security mechanisms is crucial:
They allow for the same scalability and cost improvements while maintaining security and decentralization.
Wait, doesn’t the EIP-4844 proposal solve this problem? It can only be said that it partially solves it, but not permanently. Introducing data blobs can reduce the cost of Rollup releasing data to L1. These data blobs are stored outside the EVM execution and are only stored for a few weeks (to avoid state bloat).
However, introducing data blobs only brings one-time improvement, and as more projects use Rollup and the amount of data increases, the demand for block space for data blobs will also increase, leading to increased costs of data blobs.
In the long run, for use cases that are highly cost-sensitive, we need a more scalable DA layer that can be used in conjunction with Ethereum. Currently, the most scalable solution in terms of cost and throughput is the NEAR Protocol.
What makes the NEAR Protocol so highly scalable as a DA layer? NEAR DA leverages an important part of the NEAR consensus mechanism, called Nightshade, which parallelizes the network into multiple shards (essentially multiple parallel blockchains).
Each shard on NEAR generates a small part of the block called a chunk. These chunks are aggregated to produce a block. All of this happens at the protocol level and is invisible to users and developers.
When a block producer processes a receipt, consensus is reached for the corresponding receipt. Once the block is processed and included in a block, the receipt is no longer needed for consensus and can be deleted from the state of the blockchain. Therefore, NEAR does not slow down its consensus speed when there is more data than needed, but any user of NEAR DA will have sufficient time to query transaction data.
Therefore, for any Rollup solution, especially high-throughput solutions, scalable and cost-effective data availability is crucial.
Game networks are undoubtedly one of the areas that urgently need this feature, but other use cases such as AI/machine learning also require scalable data storage.
As NEAR Protocol transitions to stateless verification, it will further reduce the hardware requirements for certain types of validators (block validators). By storing the state in memory, NEAR can support more shards, thereby increasing the decentralization of the system.
This means that the number of shards will increase, thereby increasing overall throughput. Currently, the NEAR protocol is already very efficient, with individual shards processing 4MB of data per second. With the existing 4 shards and future expansion to n shards, it means that NEAR-based Rollup solutions or any other projects no longer need to compete for block space.
This is in stark contrast to single-chain systems and the scalability limitations of other blockchains, and it makes NEAR’s data availability (DA) future-proof.
As the number of shards in the NEAR protocol gradually increases to n, the amount of data that needs to be stored by each individual shard will decrease.
NEAR’s data availability (DA) already demonstrates huge cost-saving potential. For example, using NEAR DA, Arbitrum’s 10-week data storage cost is only $87.62, compared to over $16.2 million with traditional solutions. During the same period, the data storage cost of Celestia is also much higher than NEAR DA.
In conclusion, the NEAR protocol provides a very powerful data availability (DA) solution, which will be widely used in modular stacks, with the following advantages:
– Cost-effectiveness and scalability
– Proven security protection
– Future-oriented technical architecture
Integration of NEAR with Rollup development toolkits/stacks (such as Polygon CDK or Arbitrum Orbit Stack and Rollup-as-a-Service (RaaS) providers like AltLayer) is expanding.
Soon, we will see a complete modular blockchain ecosystem built on top of the NEAR protocol.