# NEAR - Near Protocol

### **Nightshade Sharding**

* sharding is a scaling solution to increase network’s transaction per second (TPS)
* nodes of validator are divided into groups, each group processes one part of data
* groups can then process transactions simultaneously to produce chunks
* a single validator produces block by assembling all chunks created
* dynamic re-sharding adjusts # of shards based on user demand, technically limitlessly

### Rainbow Bridge

* bring ERC-20 tokens and assets from Ethereum chain to NEAR network
  * locks tokens to be sent in a Ethereum smart contract, tokens are taken out of circulation
  * give proof to NEAR network, create corresponding amount of tokens in NEAR
  * NEAR verifies the proof, and *then* creates 20 new DAI for me to use on NEAR.

### **Aurora**

* layer 2 solution on the NEAR Protocol
* use ETH as gas fees like ETH layer 2 design
* Aurora Engine - EVM that is compatible to Ethereum DApps deployment
* Aurora Bridge - permissionless transfer of tokens & data between Ethereum & Aurora

### USN algorithmic stablecoin

* NEAR-native stablecoin soft-pegged to the US dollar
* $NEAR is used to absorb the volatility of USN
* an arbitrage smart contract allows the exchange of 1 USN to $1 worth of $NEAR
  * when USN=$0.99, people buy 1 USN and sell it for $1 worth of NEAR, making $0.01 profit
  * when USN=$1.01, people exchange $1 worth of NEAR for 1 USN, making $0.01 profit
* back USN with a reserve fund that is greater than 100% of all USN (i.e. double-collateralized)
* in extreme cases, reserve fund in Decentral Bank can repurchase all the USN to re-peg USN