Harnessing AI on the Blockchain: NEAR Protocol’s Innovative Use Cases

AI Narrative Trending

Artificial Intelligence (AI) is a thriving technology being massively adopted, and Web3 is no exception. In fact, the beginning of 2024 witnessed one of the highest spikes in the AI crypto narrative, as the figures below suggest (provided by cryptokoryo).

NEAR is at the forefront of bringing AI into the blockchain, or more exactly, it pioneers AI in Web3. According to the NEAR Chain Report, the first half of 2024 witnessed a considerable growth of new users on the NEAR blockchain. Overall, since January 2024, 30 million new users have registered on the blockchain (provided by Masi).

Importantly, new users have run more transactions than old users.

NEAR price is on the run, too, as CoinGecko suggests.

Integrating AI and Blockchain

Blockchain and AI have a symbiotic relationship. Together, they form a powerful synergy, which the table below illustrates. According to Spherical Insights, the intersection of blockchain and AI is poised to become a billion-dollar industry by 2030, whereas, in 2021, it accounted for only 230.10 mln USD.

That’s exactly what happens when blockchain meets AI: faster transactions, high programmability and automation, complex custom logic, and a user-friendly cross-chain interface. This is a story of how blockchain and AI come together and improve human life. Possible use cases of AI in Web3 include, among others, the following:

• Fintech;
• medical registry;
• supply chain management;
• production automation;
• Internet of Things;
• security systems;
• decentralized data storage;
• authenticity verification;
• smart contract development;
• building DeFis;
• and more.

With AI’s growing influence on software products, it’s poised to automate and enhance economic sectors.

How NEAR Fosters AI

The NEAR Protocol, a cutting-edge blockchain platform, is on the brink of a technological revolution by integrating artificial intelligence (AI) into its infrastructure. This pioneering move is set to unlock myriad real-life use cases that promise to enhance the blockchain experience for users and developers alike, in which we’re going to dive deeper now.

Smart Contract Optimization

AI algorithms can analyze vast amounts of data to identify patterns and inefficiencies in smart contract execution. By applying these insights, NEAR can optimize smart contracts to run more efficiently, saving time, reducing transaction costs for users, and improving smart contract security. Such optimization enhances performance and makes the platform more attractive to developers looking to deploy complex dApps, and it includes the following:

Autonomy and Asynchrony: Smart contracts on Near are known for their high programmability and automation. They are programs that live on the blockchain, interact asynchronously with other contracts, and manage real-value transactions. NEAR smart contracts have complete control over their accounts, allowing them to transfer tokens, call methods, create new accounts, deploy contracts, and update their own code.

Resource Optimization: Smart contracts on NEAR function within a resource-limited environment, necessitating efficient code to optimize processing power and memory usage. This ensures effective execution within the blockchain’s constraints.

Development Languages: NEAR supports JavaScript and Rust languages for smart contract development. JavaScript eases the transition for web developers, while Rust offers performance and safety benefits. The NEAR SDK provides tools for building, testing, and deploying contracts, simplifying blockchain interactions.

WebAssembly Compilation: Smart contracts on NEAR are compiled into WebAssembly (WASM), ensuring high performance and security. WASM’s cross-platform nature allows NEAR smart contracts to run on any supporting machine, thus bringing about portability and flexibility.

Storage Efficiency: NEAR smart contracts store data in key-value pairs using JSON or Borsh serialization, which optimizes storage space and cost. Accounts lock a portion of their balance for their storage, encouraging efficient data usage.

Gas Optimization: AI-driven algorithms help reduce gas costs, making transactions more cost-saving for users.

Blockchain Operating System (BOS)

NEAR’s blockchain operating system (BOS) is not an actual operating system in computer terms but serves as an intermediary layer between software applications and the underlying blockchain network. Unlike traditional operating systems that interface with a single computer’s hardware, BOS interacts with the hardware of all nodes in the network, collectively forming the blockchain. It uses a user-friendly interface to allow end users to easily discover all of Web3’s possibilities in one seamless experience and empower developers to create and code interfaces in a single environment with the ability to fork a host of components to build apps faster. Everything on BOS is easy to discover and open-source by default. This allows developers to see what others have built, learn faster, and gain inspiration.

In essence, the NEAR Blockchain Operating System aims to make Web3 and Web2 easier to access and navigate than ever.

Chain Abstraction

A serious impediment to Web3 adoption is poor interfaces which scares away users. Chain Abstraction in the NEAR Protocol aims to enhance the user experience by abstracting away the complexities of blockchain technology. Ideally, a user doesn’t even have to bother whether he or she is using a Web3 application — it should be like any other online application. NEAR achieves this through several services:

1. FastAuth: This service allows users to create and recover accounts using their email addresses through multi-party computation (MPC). Users can seamlessly onboard without the need for seed phrases or private keys.
2. Relayers: Developers can subsidize gas fees for users by attaching NEAR tokens to transactions. These relayers ensure smooth transaction execution without users directly acquiring funds.
3. Multi-chain signatures: NEAR accounts can sign and execute transactions across different blockchain protocols. Users can use the same NEAR account to interact with Ethereum, Binance Smart Chain, Avalanche, and more, simplifying cross-chain interactions.

Hence, chain abstraction means a good interface on the one hand and a chain-agnostic approach on the other hand. Chain abstraction partially embraces account abstraction, too. By combining these services, the NEAR Protocol enables a seamless user experience, where users log in with their email, receive a zero-fund account, and interact with blockchain applications effortlessly.

Programmable Money

A significant aspect of smart contracts on Near is their ability to handle real money or assets of real-world value in the form of programmable money, which refers to digital currency that can be assigned conditions about its use by leveraging blockchain-based smart contracts. In the NEAR ecosystem, smart contracts reside within NEAR accounts, enabling them to store data, perform transactions, and expose methods for interaction with other accounts.

This integration of programmability and digital value opens up exciting possibilities for innovative financial services and applications. These could take the form of cryptocurrency transactions, tokenized assets, or other financial instruments. The handling of real value elevates the importance of security in contract development.

❗Programmable money is a primitive standing behind NEAR’s core concept — chain abstraction. NEAR founder Ilya Polosukhin, in his speech at the NVIDIA Transforming AI conference in March 2024, said, “Programmable money is what helps coordinate people at scale. So, we ended up building a new protocol, a blockchain, which has been running since 2020 and has the most users in the world in the blockchain space. It has multiple million daily users who don’t even know they’re using a blockchain but are actually interacting with programmable money“.

Enhanced Fraud Detection

Blockchain is renowned for its security, but the addition of AI takes it a step further. Early scam detection and prevention protect users’ assets and maintain the integrity of the platform.

The NEAR blockchain uses these methods to enhance the security of transactions and help maintain the integrity and reliability of blockchain networks.:

1. Comprehensive analysis of vulnerabilities: AI can continuously monitor transactions on blockchains to detect different types of anomalies and fraud using statistical and machine learning methods, game-theoretic solutions, and digital forensics.
2. Privacy-Preserving and Adaptive Incentive-Based Approach: a Machine Learning (ML) algorithm for e-commerce fraud detection by facilitating inter-organizational collaboration. The proposed method uses blockchain to secure the privacy of the data.
3. Real-Time Fraud Detection: when fraudulent activity is reported or when evidence of fraud emerges, the system instantly recognizes the patterns and triggers an alert so that scam transactions can be blocked before completion.

It’s noteworthy that efficiency can depend on various factors, including the nature of the transactions, the size of the network, and the sophistication of the fraud detection algorithms used.

Personalized Blockchain Experiences

AI’s ability to learn and adapt to user behavior can be leveraged to create a more personalized blockchain experience. From recommending dApps based on past interactions to customizing wallet interfaces, AI can make the NEAR Protocol more user-friendly and accessible to a broader audience.

The NEAR blockchain puts forward personalized blockchain experiences in several ways:

1. Built-in name service: users can choose user-friendly addresses that are easy to recall instead of a string of random numbers. This feature is known as ‘Named Addresses’.
2. Unique Key Stream: multiple keys for each account are supported, with distinct permissions for each key. This allows users to give apps access to their accounts while ensuring their funds remain secure.
3. Developer Incentive: Every time code runs on a smart contract, the contract developer earns 30% of the burned gas.
4. Built-In Account Abstraction: NEAR offers meta-transactions, social recovery, gasless (sponsored) transactions, and programmable transactions, to name but a few AA functions.

Predictive Analytics in DeFi

The DeFi sector stands to benefit significantly from AI integration. NEAR’s AI can provide users with predictive analytics, offering insights into market trends and helping inform investment decisions. This level of analysis can empower users to make more informed choices, manage risks better, and potentially increase their returns.

Data-Driven Governance

AI can play a crucial role in governance for decentralized autonomous organizations (DAOs) operating on the NEAR Protocol. By analyzing proposal outcomes, voter behavior, and other governance-related data, AI can offer valuable insights that help streamline decision-making processes and ensure that collective actions align with the community’s best interests.

As NEAR Protocol continues to develop and implement AI into its ecosystem, these use cases represent just the tip of the iceberg. The convergence of AI and blockchain promises to create a more intelligent, efficient, and user-centric digital world. With NEAR at the forefront, the future of blockchain technology looks brighter than ever.

Future Plans

The NEAR Protocol has outlined a strategic roadmap for integrating artificial intelligence (AI) into its blockchain ecosystem with the aim of enhancing the capabilities and accessibility of blockchain applications. The plan includes:

1. Recruitment: NEAR aims to hire AI engineers within the next 3–6 months to build user-owned AI systems.
2. Expertise: leveraging the co-founder’s experience in AI, particularly with the ‘Transformer’ architecture, NEAR is set to merge AI with blockchain functionalities.
3. Open Source AI: as a non-profit, decentralized platform, NEAR focuses on creating an open-source AI ecosystem accessible to everyone.
4. Simplifying Crypto with AI: NEAR’s chain abstraction initiative will use AI to simplify the user experience in crypto, making it easier to navigate a multichain environment.

Staketab is a Professional Staking Provider based in UAE (secured more than $150m TVL https://www.stakingrewards.com/provider/staketab) with extensive experience in offering infrastructure solutions for the Web3 ecosystem for over 3 years. We are seasoned validators operating across more than 40 blockchain networks, ensuring high uptime and 24/7 monitoring.

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