Cyber Capital Founder: Recognizes NEAR's Sharding Model, Though Flawed, Represents the Future of Crypto

Source: Justin Bons X account

Author: Justin Bons, Founder of Cyber Capital

Compiled by: Felix, PANews

Editor’s Note: On May 3, Cyber Capital founder Justin Bons posted on the X platform, accusing the SUI token economics of being overly centralized, with over 8 billion SUI staked, and more than 84% of the staked supply held by the founders, without any lock-up period or legal guarantees. Recently, Justin Bons posted again, providing a "neutral" interpretation of the NEAR protocol, mainly including its sharding model and governance mechanism. The following is the full text:

NEAR can scale to meet demand through sharding. Currently, there are 6 shards delegated to 467 permissionless validators. NEAR is committed to stateless validation and dynamic load balancing. ETH and SOL should be wary, or NEAR will swallow their market share.

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

The core here is "parallelism." SOL achieves this through parallelization (multithreading) on a single machine. Sharding elevates this to a new level by distributing the workload across multiple machines, thereby increasing capacity while maintaining decentralization.

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

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

The author claims to be less concerned about L2's data availability. Interestingly, NEAR offers more data availability than Ethereum, and at a lower cost. One day, chains like NEAR will also be more secure. When that happens, there will be no reason to use Ethereum anymore.

NEAR also employs a novel sharding model. Since block producers do not create blocks within shards, but instead add their blocks/shards to a single block. This helps improve composability while still distributing the state workload across multiple shards. This is a truly unique design.

NEAR's token economics are also impressive. It adopts a model similar to Ethereum, combining fee burning with tail inflation, which may be the ideal economic design for blockchains. Because it combines long-term sustainability with greater scarcity potential.

However, the author strongly disagrees with NEAR's governance mechanism, and more importantly, with NEAR's development direction. Because NEAR attempts to weaken the power of large token holders, insisting on ideas like "one person, one vote."

This is completely contrary to the governance design that NEAR should prioritize, which aligns with stakeholders. Because blockchains are fundamentally not democratic. NEAR is trying to balance their design with democracy, which actually severely undermines NEAR's governance. Democratic design requires permissioned elements; as long as the issue of "human proof" is not resolved, democracy cannot exist. This can be seen in NEAR, where joining a "working group" requires filling out a form.

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

NEAR's governance is a mixed bag. It should be noted that no blockchain can meet all the author's standards. Nothing is perfect, and governance is often the least mature module in most blockchains. It is hoped that NEAR can make progress in stakeholder voting in the future.

The author states that another aspect of NEAR's design they dislike is "development fees." A portion of the revenue will be returned to the person who created the code module. However, this is often determined outside of contracts and does not meet market expectations, leading to inefficiencies.

In Justin Bons' view, various criticisms of sharding are unfounded.

Criticism 1. Single shard security is weaker

Shards share the same security guarantees. Aside from DDoS attacks, such attacks can be easily mitigated with a sufficient number of nodes. Because validators are randomly assigned to shards, attackers cannot choose which shard they will ultimately validate. Therefore, the only way to attack a single shard is to attack the entire L1. Mathematically, the chances of controlling a single shard are negligible.

Criticism 2. Sharding undermines composability

This is also incorrect, as all shards maintain perfect composability due to the inherent nature of the design. Since all shards are the same and part of the same consensus mechanism, native interoperability can be achieved.

This is exactly what NEAR does for cross-shard TX. A few seconds of delay does not equate to undermining composability. This is also why seamless interoperability cannot be fully realized between L2s. Because you are dealing with different sets of rules and power blocks.

As EGLD and TON have fully implemented sharding, NEAR lags behind some competitors. This is because NEAR has added some design requirements in the process, such as stateless validation (which will ultimately be very helpful for the entire sharded chain). But this is competition after all.

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

In summary, NEAR is a great blockchain and is at the forefront of industry technology. In contrast, Bitcoin and Ethereum are still in the Stone Age (outdated).

Ignore the downsides of NEAR, as it clearly represents the future of crypto.