NEAR Protocol raises $21.6M from A16Z and launches its MainNet, beating Ethereum 2.0

Mike Butcher

It was only the other week that Andreesen Horowitz announced their second blockchain-focused fund of $515 million. In the announcement, they said: "We are still early in this Web 3 build-out. High-performance programmable blockchains will make decentralized network development much more accessible. After years of R&D, we are excited that a number of next-gen programmable blockchains will begin rolling out in the near future.”

The firm obviously had something in mind when that was published, it's emerged that it's leading a $21.6 million funding round for the NEAR Protocol project (a round which just closed in the middle of US COVID-19 lockdowns). A16Z has been joined by investors including Libertus, Blockchange, Animal Ventures and various undisclosed ethereum projects founders. There was also participation from existing investors (Pantera, Electric) and others listed here.

Not only that but NEAR launches its "MainNet” (as in, ‘production-ready') network today. The move is a black-eye for the much-vaunted Ethereum 2.0 release, which has yet to appear.

What’s the TL;DR for blockchain to date? Well, we know Bitcoin (worth $143 billion) created a digital currency but without much programmability. Ethereum (now worth $22 billion) used the same concepts to build a decentralized application platform on top of a cryptocurrency (Ether) and now has over $1 billion stored in financial applications on top of it. However, the race to create a blockchain that can compete with the existing speed of the world’s financial system, and gain the same amount of user adoption has so far fallen short of expectations. The Ethereum project has proven quite slow, expensive and pretty difficult to use for anything but niche financial applications.

NEAR is the new kid on the block. After almost two years in development, it now claims that its platform is more performant, more usable and less expensive than Ethereum, allowing developers to realize many of the original use cases which got people so excited about blockchain in the first place.

In fact, Vitalik Buterin, the Ethereum founder, has been known to make statements to the effect that NEAR may represent a significant challenge to Ethereum at some point.

Technically speaking, the NEAR Protocol is a brand new public, proof-of-stake blockchain which is built using a novel consensus mechanism called “Nightshade". NEAR Protocol uses a technique called “sharding” that splits the network into multiple pieces so that the computation is done in parallel, meaning there isn’t a theoretical limit on the network’s capacity.

Near is also drawing on a Silicon Valley culture of “ship it, and ship it fast!” where Blockchain culture, in general, has suffered from a great deal of theory, philosophical navel-gazing, and not a lot of 'get shit done'.

Cofounder Alex Skidanov started his professional career at Microsoft in 2009, then joined MemSQL in 2011 as Engineer #1, where he worked for 5 years as Architect and Director of Engineering. The other co-founder is Illia Polosukhin, who has over 10 years of experience, including three years at Google where he was a major Tensor-Flow contributor and a manager of the team building question-answering capabilities for the core Google search.