Near Protocol’s Approach to Gas Fees: User-Friendly Blockchain Transactions

Near Protocol addresses the common issue of high gas fees in blockchain transactions with a user-friendly approach, making it more accessible and affordable. The platform’s strategy focuses on efficiency, fairness, and incentivizing both users and developers.

Near Protocol’s gas fee structure is a key element in its ecosystem, serving multiple purposes. Each transaction on the network incurs a small fee, which is fundamental for several reasons:

Network Maintenance. These fees play a vital role in maintaining the health and efficiency of the Near Protocol network. A portion of these fees is used to support the infrastructure, including compensating validators who play a critical role in processing transactions and maintaining the blockchain.

Incentivizing Developers. A unique aspect of Near’s fee structure is that it directly incentivizes smart contract developers. A portion of the transaction fees generated by smart contracts is allocated to the developers, encouraging the creation and maintenance of diverse and functional decentralized applications (dApps) on the platform.

Preventing Network Spam. The fee acts as a deterrent against spamming the network with trivial or malicious transactions. By imposing a cost on each transaction, the protocol ensures that users and developers use the network resources judiciously, leading to more efficient operation and allocation of network resources.

Resource Allocation. The fees are intricately linked to the resource usage in the network. They are calculated based on the computational resources consumed by a transaction, including computation, storage, and network bandwidth. This ensures that users pay a fair price relative to the resources their transactions consume, promoting an efficient and sustainable use of the blockchain.

In summary, Near Protocol’s gas fee structure is thoughtfully designed to support network operations, incentivize development, prevent abuse, and ensure efficient resource utilization, making it a cornerstone of the platform’s functionality and user experience.

Near Protocol’s approach to validator compensation and developer incentives is distinct and innovative compared to many blockchain networks:

Independent Validator Compensation. Validators, crucial for processing transactions and maintaining the blockchain, are not paid directly from gas fees. Instead, their compensation is derived from other mechanisms within the protocol. This separation ensures that validators are motivated to maintain network integrity without directly tying their rewards to transaction fees.

Developer Incentives from Gas Fees. For transactions involving smart contracts, Near Protocol allocates 30% of the gas fee to the contract’s developer. This direct financial incentive encourages developers to create and maintain high-quality dApps on the platform, fostering a vibrant and diverse ecosystem.

Burning the Remaining Gas Fees. The remaining 70% of the gas fee is not distributed but burned. This burning mechanism helps in regulating the supply of NEAR tokens, potentially leading to deflationary pressure which can be beneficial for the overall token economy.

This structure creates a balanced ecosystem where validators are fairly compensated for their contributions, developers are incentivized to innovate, and the token economy is carefully managed to ensure long-term sustainability and growth of the Near Protocol network.

Near Protocol’s provision for free transactions on read-only methods represents a notable advancement in making blockchain technology more accessible and user-friendly:

Accessibility of Read-Only Transactions. By allowing users to execute read-only methods on smart contracts without any cost, Near Protocol significantly lowers the barrier to entry for interacting with blockchain applications. This feature is especially beneficial for users who only wish to access data or view information without making any changes to the blockchain state.

No Account Requirement. A remarkable aspect of this feature is that users don’t even need to have a Near account to utilize these free read-only transactions. This unprecedented level of accessibility invites a broader audience to engage with blockchain technology without the need for initial investment or technical hurdles.

Validators Bearing the Costs. The gas costs associated with these read-only transactions are absorbed by the validators, not passed on to the users. This arrangement underscores Near’s commitment to fostering an inclusive and user-centric blockchain environment.

Promoting Inclusivity and Adoption. This approach is a significant stride towards inclusivity in the blockchain space. By removing financial barriers, Near Protocol encourages more people to explore and interact with dApps, potentially leading to wider adoption and understanding of blockchain technologies.

In essence, Near Protocol’s approach to free transactions for read-only methods demonstrates a strong commitment to making blockchain interactions more inclusive and user-friendly, opening up a world of possibilities for both seasoned blockchain enthusiasts and newcomers alike.

Near Protocol’s approach to transaction fees with deterministic gas units and variable gas prices offers a balanced and efficient system:

Consistency with Deterministic Gas Units. Each operation on the Near Protocol has a predetermined gas unit cost, ensuring predictability and consistency for users. This deterministic nature simplifies the process of estimating transaction costs and enhances transparency in the network.

Adaptive Gas Prices. The gas price in Near Protocol is not static; it varies according to network demand. This dynamic pricing mechanism adjusts based on the network’s current load, increasing when the network is busier and decreasing during quieter periods.

Responsiveness to Network Conditions. By allowing the gas prices to fluctuate based on real-time network activity, Near Protocol ensures that transaction fees are always aligned with the current state of the network. This responsiveness prevents congestion and maintains efficient throughput, even during high demand.

Balancing Fairness and Network Health. The combination of fixed gas units and variable gas prices strikes a balance between fairness to users and the overall health of the network. Users benefit from predictable costs, while the network can dynamically adjust to maintain performance and capacity.

Overall, this structure of gas fees in Near Protocol reflects a thoughtful approach to managing network resources, providing a user-friendly experience while maintaining optimal network performance.

Near Protocol’s system of translating gas to computational resources is an innovative approach that enhances transparency and predictability:

Gas Units Reflecting Compute Time. Near Protocol has aligned its gas units to approximate compute time, with 1 TGas (1⁰¹² gas units) roughly equating to 1 millisecond of compute time. This alignment simplifies the understanding of transaction costs for users, linking them directly to the tangible metric of processing time.

Inclusive Resource Measurement. Beyond just CPU time, Near’s gas units encompass a broader range of computational resources. This includes bandwidth for network time and storage for input/output (IO) operations, providing a more comprehensive cost measurement.

Minimum Gas Price Correlation. The cost in milliNEAR, using the minimum gas price, is directly correlated with the TGas units. This correlation offers users a straightforward way to estimate the financial cost of their transactions based on the computational resources they will consume.

Future Adjustments Through Governance. The protocol also allows for future adjustments in the mapping between TGas and milliseconds through its governance mechanism. This flexibility ensures that the system can adapt to changes in technology and network conditions, maintaining a fair and efficient cost structure.

In summary, Near Protocol’s method of converting gas into computational resources offers an intuitive and comprehensive way for users to understand and estimate the costs of their blockchain transactions.

Near Protocol’s transparent approach to gas costs for common actions ensures users are well-informed about potential fees:

Listed Costs for Standard Operations. The platform clearly lists the gas costs for typical blockchain operations, including account creation, fund transfers, and staking. This transparency helps users plan and budget their blockchain activities.

Gas Costs in TGas and milliNEAR. Fees are presented in both TGas (teragas) and milliNEAR, making it easy for users to understand the cost in both computational and monetary terms.

Enabling Informed Decision-Making. By providing this information upfront, Near Protocol empowers users to make informed decisions about their transactions on the network, enhancing their overall experience and trust in the platform.

Near Protocol’s prepaid gas feature greatly enhances the user experience, particularly for new users:

Developer-Funded Gas Fees. Developers can set up funded accounts specifically for covering their users’ gas fees. This can significantly lower the entry barrier for new users who might be hesitant about incurring costs while exploring new dApps.

Smoother Onboarding Process. By absorbing the initial costs, developers can provide a frictionless onboarding experience. Users can interact with applications without worrying about transaction fees, leading to higher engagement and adoption rates.

Flexible User Support Mechanism. This system allows developers to support their users flexibly, tailoring the support to specific user groups or transaction types, thus enhancing user satisfaction and loyalty.

Overall, Near Protocol’s approach to gas fees represents a thoughtful balance between network maintenance, developer incentives, and user accessibility. By implementing these innovative mechanisms, Near Protocol makes blockchain transactions more affordable and accessible, encouraging broader adoption and participation in the blockchain ecosystem.