Founder of Cyber ​​Capital: Recognizes the NEAR sharding model. Although it has drawbacks, it represents the future of encryption.

Author: Justin Bons, founder of Cyber ​​Capital

Compiler: Felix, PANews

Editor’s note: May 3, founder of Cyber ​​Capital Justin Bons posted an article on the X platform, accusing SUI token economics of being too centralized. More than 8 billion SUI are pledged, and more than 84% of the pledged supply is held by the founders, without any lock-up period or legal guarantee. Recently, Justin Bons published another article giving a "neutral" interpretation of the NEAR protocol, mainly including its sharding model and governance mechanism. The following is the full text of the content:

NEAR can meet the needs through sharding expansion. There are now 6 shards delegated to 467 permissionless validators. NEAR is committed to stateless verification and dynamic load balancing. ETH and SOL better stay vigilant or NEAR will eat up their market share.

Currently NEAR sharding is not fully implemented. Although all validators still validate all shards, NEAR's TPS can still exceed 1000, consistent with the SOL. With the implementation of the roadmap in a few years, NEAR's TPS may exceed 100,000. This is the power of sharding.

The core here is "parallelism". SOL achieves this in a single computer through parallelization (multithreading). Sharding takes it to the next level by distributing workloads across multiple computers. Thus increasing capacity while maintaining decentralization.

This is how to solve the blockchain trilemma. True horizontal expansion, unlocking millions of TPS in the future. The trade-off here is not security or decentralization, but speed. Due to cross-shard communication, there is a delay of a few seconds before the shard is finally completed.

SOL sacrifices capacity for speed. Sharded chains like NEAR, EGLD, and TON sacrifice speed for capacity. That's why the author prefers sharding, as opposed to "L2 scaling", the trade-off is at least valid.

The author said that he is not too concerned about the data availability of L2. But interestingly, NEAR offers more data availability than Ethereum and is cheaper. One day, chains like NEAR will also be more secure. When this happens, there will be no reason to use Ethereum anymore.

NEAR also adopts a novel sharding model. Since block producers do not create blocks in shards but add their blocks/shards into a single block. This helps improve composability while still spreading the state workload across multiple shards. This is a truly unique design.

NEAR’s token economics are also excellent. Adopting a similar model to Ethereum, combining fee destruction with tail inflation, this may be the ideal economic design for the blockchain. Because it combines long-term sustainability with greater scarcity potential.

However, the author strongly disagrees with NEAR’s governance mechanism, and more importantly, does not recognize NEAR’s development direction. Because NEAR seeks to reduce the power of large token holders. Adhere to the concept of "one person, one vote".

This is completely contrary to the stakeholder-compliant governance design that NEAR should prioritize. Because blockchain is not democratic at all. NEAR is trying to balance their design with democracy, which in fact severely weakens NEAR's governance. The design of democracy requires an element of permission, and as long as the problem of "human proof" is not solved, there will be no democracy. You can see this in NEAR, where joining a "workgroup" requires filling out a form.

NEAR does have an on-chain treasury. This is an excellent, perhaps even critical, mechanism that most blockchains lack. Unfortunately, the treasury is still controlled by the foundation.

NEAR governance is a mixed bag. I would like to remind everyone here that no blockchain can meet all the author's criteria. Nothing is perfect, and governance is often the least mature module in most blockchains. I hope NEAR can make some achievements in stakeholder voting in the future.

Another aspect of NEAR's design that the author says he dislikes is the "development cost." A portion of the revenue will be returned to the person who created the code module. However, this is often set out of contract and does not align with market expectations as it can lead to inefficiencies.

In Justin Bons’ view, various criticisms of sharding are untenable.

Criticism 1. The security of a single shard is poor

The shards share the same security guarantee. Except for DDoS attacks, such attacks can be easily mitigated as long as there is a sufficient number of nodes. Since validator shards are randomly assigned, attackers cannot choose which shard they ultimately validate on. Therefore, the only way to attack a single shard is to attack the entire L1. Mathematically speaking, the chances of controlling a single shard are slim.

Criticism 2. Sharding destroys composability

This is also untrue because due to the inherent nature of the design, perfect composability is maintained between all shards. Since all shards are identical and part of the same consensus mechanism, native interoperability is achieved.

This is exactly what NEAR does with cross-shard TX. A delay of a few seconds does not equate to breaking composability. This is also the reason why seamless interoperability between L2s cannot be completely achieved. Because you are dealing with different rule sets and power blocks.

Since EGLD and TON have fully implemented sharding, NEAR lags behind some competitors. This is because NEAR has added some design requirements along the way, such as stateless verification (which will ultimately help a full shard chain a lot). But this is competition after all.

Whether the NEAR team continues to focus on achieving L1 scalability through sharding is the billion-dollar question. While they are working hard on other new advanced features such as DA and ZK proofs, they are still behind the roadmap, so there is reason to be concerned.

All in all, NEAR is a great blockchain and is at the forefront of industry technology. In comparison, Bitcoin and Ethereum are still in the Stone Age (old).

Ignore the shortcomings of NEAR because it clearly represents the future of encryption.

Related reading: LD Capital: Returning to AI’s NEAR, superimposing multiple narratives or ushering in value discovery?

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