Chain Abstraction II — Near Protocol

14 min readMar 24, 2024

Author: F.F from LBank Labs Research team

TL;DR

The proliferation of various blockchains, rollups, and modular components under the Web3 umbrella has introduced a high level of complexity and fragmentation. This fragmentation has resulted in suboptimal user and developer experience. The abundance of distinct chains leads to liquidity, app, and user fragmentation, creating a user interface of immense complexity that may be challenging for mainstream users to navigate effectively.

The process of bridging assets between different chains often involves wrapping tokens, which can be confusing and non-intuitive for users. Additionally, the bridging mechanisms across chains are often inconsistent and cumbersome, presenting vulnerabilities and security risks. This lack of standardization in bridging mechanisms not only hinders the seamless transfer of assets but also exposes users to potential security threats. Furthermore, the liquidity of non-native assets on different chains is often limited, further complicating the asset transfer process.

And the Bitcoin Renaissance has generated a strong demand to introduce smart contract capabilities into these chains. This, combined with the diverse landscape mentioned above, presents challenges in terms of compatibility and interoperability among different chains.

According to the First Principle Thinking, to realize the vision of mass adoption, a single account system is needed from a user perspective. Here, users can interact with applications on different chains, and assets are either bridged or swapped automatically. This eliminates the need to manage separate accounts for multiple chains, each requiring a different wallet interface. The ability to sign transactions on any chain from a single NEAR account simplifies user interaction through a unified interface, enabling seamless transactions.

NEAR stands out as a comprehensive Chain Abstraction solution due to its core focus on achieving mass adoption. NEAR aims to lower entry barriers for users, reduce developer friction, and provide seamless services. NEAR Protocol allows for account creation and recovery using email addresses, account usage without funds acquisition, and control over accounts on other chains. Despite the complexity of its underlying system, NEAR delivers an easy-to-use platform.

This article marks the second installment in our Chain Abstraction series. The initial piece explored ZetaChain, highlighting its omnichain smart contract capabilities and cross-chain messaging as forms of chain abstraction. NEAR presents a high-level conception that blockchain technology should be abstracted from user experience, ensuring users are unaware of blockchain use or specific chain operations.

Our focus in this article is to delve into the foundational components of NEAR’s chain abstraction stack, including Account Abstraction, Frontend Abstraction, and Backend Abstraction. We will also explore potential new use cases enabled by these abstraction layers.

Account Abstraction: Native Domain Name System

Account Abstraction has been a prominent topic in the Ethereum ecosystem over the past year, with EIP 4337 generating significant discussion. However, there remains a lack of consensus on the precise definition of this concept. Often, people tend to include ancillary features such as social login, multi-sig capabilities, and gas fee payment under the umbrella of Account Abstraction. In essence, Account Abstraction refers to the ability to programmatically establish the validity conditions of a transaction and utilize smart contracts for its implementation.

On the other hand, Near Protocol introduces a native domain name system, associating human-readable accounts with numerous keys possessing varying permissions for different functionalities. Near also offers the functionality to convert externally owned accounts (EOAs) into smart contracts. Essentially, “Account Abstraction” on other blockchain platforms is an inherent aspect of NEAR’s architecture, representing a built-in feature within the protocol.

.near is the Original Account Abstraction

The .NEAR account model forms the foundation for Near’s smart contracts, offering high composability and user possibilities.

FastAuth represents a pivotal key management system enabling users to recover or sign up for a NEAR account using their email addresses. This feature provides a Web2-like onboarding experience without the necessity to store a seed phrase or password. Keys are safeguarded through advanced “Passkeys” technology, which substitutes passwords with biometric data such as fingerprints or FaceID linked to a specific device. Users have the ability to regain access to their accounts at any given time by utilizing their email through the MPC recovery service.

The upcoming version of FastAuth, slated for release this month, will feature mappings for NEAR addresses to EVM, Bitcoin, and other blockchain addresses. NEAR accounts can initiate transaction signing for other chains, facilitating the seamless development of multichain applications directly within NEAR’s smart contracts.

.tg Opens New Era

Each Near account can be associated with different access key pairs. If we consider a Near account as a real person, it can hold various keys to access different protocols, or even different keys to navigate different chains with different signature algorithms.

The integration with Telegram has fully unlocked its potential. Up to this point, Near Protocol users have been confined to one top-level domain, .near. However, the introduction of the .tg domain opens the door to a multitude of opportunities. Any other widely-used platform can now secure its top-level domain on the Near Protocol, such as .x, .ins, and more.

Leading mainstream exchanges have already begun supporting deposits and withdrawals to and from .tg accounts. This paves the way for smoother integration of additional top-level domains.

Telegram has the potential to act as a blockchain gateway through the Here Wallet. This wallet showcases that the user experience can mirror familiar mobile applications. Moreover, it has the ability to introduce multi-chain functionality, offering chain-agnostic Dapps for users.

Frontend Abstraction

Gateway to Near Protocol

The Blockchain Operating System (BOS) marks Near Protocol’s pioneering step towards the Open Web. While Near is not the first public chain that can host static resources, it is the first to propose a composable and decentralized frontend approach. By harnessing the cost-effective storage and computation capabilities of the NEAR Blockchain, NEAR Components’ code is fully stored on-chain within the SocialDB smart contract.

Composable decentralized frontend refers to a framework that seamlessly integrates with any Web2 or Web3 backend, as well as any wallet. BOS inherits React’s design, where each component is built on top of a React Component. This structure facilitates easy contribution from a large developer community proficient in JavaScript to the open-source library. Notably, many frontend components are reusable through the fork protocol, as exemplified by DEX platforms modeled after Uniswap.

In addition to that, the LEGO block-like composition of components allows for the construction of complex applications. This method simplifies the process of launching a unified platform that provides users with a comprehensive experience and facilitates their navigation through protocols on a single page. The Near official website, near.org, serves as a gateway, not only functions as a social platform but also serves as a component store for developers and a Dapp store for users.

Interoperability between Near components and smart contracts is often overlooked when discussing BOS. NEAR Components can seamlessly interact with smart contracts on the NEAR Blockchain. While view methods permit querying by anyone free of charge, call methods necessitate user authentication.

Gateway to L2, and Future

A decentralized frontend can provide easy-to-use components for building in a chain-abstracted manner.

DapDap serves as the universal gateway to Ethereum L2s, offering a seamless and user-friendly platform that simplifies navigation across the DeFi landscape by consolidating it into a single UI. With support for 10+ Ethereum L2s and over 100 dApps, DapDap stands out as the ultimate DeFi solution for effortless onboarding and seamless exploration of the open web.

Moreover, DapDap is not limited solely to L2s; the ecosystem and protocols within EVM chains are essentially the same, encompassing decentralized exchanges, lending platforms, and NFT marketplaces. This similarity enables the creation of a comprehensive platform that spans across various EVM chains, offering users a one-stop solution for navigating the decentralized finance space.

Backend Abstraction: Chain Signatures

TSS

The underlying technology facilitating this is Chain Signatures, a pioneering threshold signature protocol that leverages an MPC (multi-party computation) signer network on NEAR.

While MPC itself is not a new technology and has been used to build MPC wallets like the Coinbase Wallet, which involves users retaining one key while centralized parties retain others, it offers several distinct advantages:

The user experience remains consistent with traditional applications.
MPC can support any chain, regardless of whether it supports smart contracts or not.
It supports underlying elliptic curves compatible with multiple chains concurrently. For example, Bitcoin and EVM use ECDSA-based curves, while chains like Near, Solana, and Cardano employ the EdDSA algorithm.

One challenge with the conventional MPC signing approach is that changing nodes necessitates generating a new public key. The integration of a novel threshold signature protocol with a key resharing procedure enables the MPC signer to maintain the same aggregate public key even as key shares and nodes undergo constant changes.

When applying MPC to Chain Signatures, a distinct address is generated for each user on every chain, enabling them to deposit assets into these addresses for seamless swaps.

A key advantage of NEAR is its account model, which inherently involves a domain name controlling a series of private keys. The smart contract wallet can directly request validators to sign any arbitrary payload, such as a transaction on Bitcoin or Optimism. NEAR has integrated programmable MPC functionalities within the validators.

Maturing Components

Meta Transaction

A meta transaction represents the foundational transaction type within the Near ecosystem. This feature empowers users to conduct transactions on the Near protocol without possessing any gas or tokens. To facilitate this process, users create and authorize transactions off-chain. The involvement of a third party, known as a relayer, is essential to cover the submission and execution fees, easing the user onboarding process onto the Near platform.

Meta transactions exclusively function in conjunction with a relayer, constituting an application layer concept operationalized off-chain. While a relayer may opt to provide their service at no cost initially, long-term sustainability necessitates alternative payment models. Users could potentially remunerate the relayer through methods external to the Near blockchain. Furthermore, leveraging innovative techniques, users might even utilize fungible tokens on the Near network for remunerating the relayer.

Meta Transaction (Source: Near Protocol)

This feature paves the way for Chain Abstraction, and the introduction of relayers is a key step in supporting Chain Abstraction.

Sweat is the first protocol to adopt this feature and successfully transform its millions of Web2 users into Web3 users.

Intent Relayer

Building upon the aforementioned infrastructure, NEAR requires a crucial component to facilitate user transactions across heterogeneous chains: a relayer network. This network is tasked with monitoring responses from the MPC (Multi-Party Computation) service, handling signed transactions, and submitting them to their respective chains before completing the final transaction.

Essentially, the intent-based infrastructure follows this architecture. At a broader level, NEAR incorporates a sophisticated multichain intent network, simplifying the integration of AI intent features for ecosystem projects and embracing the upcoming AI-driven future.

Multichain Gas Relayer (Source: Proximity)

Gas Payment in Any Tokens

When used in combination with Chain Signatures, the multichain gas relayer prevents apps and users from dealing with multiple gas tokens across various chains. The gas relayer efficiently manages gas payments on the respective chains, simplifying the process for users who only need to utilize a single token for gas transactions.

Near enables wallet and application developers to explore diverse options, including using application tokens for multichain transaction payments, implementing a subscription model with flat fees, or providing additional discounts to incentivize specific user behaviors.

Moreover, the Sweat Economy protocol is also the first to demonstrate its functionality on the testnet.

New Design Space for Cross-Chain Dapps

Currently applications are only targeting the user base of the single chain they have launched on. While one account for using apps on all chains unlocks a range of previously difficult use cases for founders and developers.

Multi-Chain Wallet

Within a NEAR account, users can manage any number of keys, facilitate key rotation for enhanced security, and implement multi-signer patterns. The Multichain Gas Relayer further simplifies the complexities associated with various gas tokens across different chains. Through Chain Signatures, one can effectively “NEAR-ify” any account on different chains, facilitating account abstraction on a multichain scale — from Ethereum and Solana to Bitcoin.

Account and Keys (Source: Near Protocol)

Wallet developers can easily leverage NEAR’s decentralized and composable interfaces to integrate applications across all chains directly within their wallet experience. For instance, the wallet serves as a prime example of such integration.

Additionally, the Account Abstraction feature offers social recovery possibilities. Suppose there is a social_recovery.near contract that maintains a record of friends associated with a specific account root.near. Initially, the root.near account added a public key that the social_recovery.near account can sign through Chain Signatures. Friends can initiate a recovery process by forwarding a new public key, provided by the user, to social_recovery.near. Upon receiving a sufficient number of such requests, social_recovery.near can proceed to sign a NEAR transaction, adding a new key on behalf of its own remote key with signer root.near. This transaction, upon execution, adds a new key to root.near, enabling the user to recover their account through a social recovery process that they have pre-set for potential account restoration needs.

The Sender Wallet concept promises to revolutionize user experiences by simplifying private key management in several fundamental ways. Primarily, it offers Instant Ethereum Account Generation from Your NEAR Account, streamlining the process for users. Secondly, it facilitates atomic swaps, allowing seamless transactions between NEAR accounts and other chains, thereby enhancing transaction efficiency. Lastly, Sender Wallet enables gas fee payments in preferred tokens, enhancing flexibility in transaction management.

According to DappRadar, Here Wallet is recognized as the leading Dapp with the highest number of Unique Active Wallets (UAW).

Initially, Here Wallet introduced a mobile version of their wallet, aiming to offer an exceptional user experience. However, despite its merits, it struggled to gain substantial traction.

The recent transition to Telegram has transformed this situation entirely. Telegram enjoys a large user base, a considerable proportion of whom are active participants in the crypto realm. This shift implies a natural growth of users for Near, leading to authentic user engagement.

In the cryptocurrency sphere, token incentives play a pivotal role, exemplified by Bitcoin’s inception through mining. The HOT mining campaign by Here Wallet has proven highly successful, attracting 3 million active miners within just 40 days. While the allure of HOT mining and referral mechanisms initially draws users in, they remain engaged and explore the ecosystem due to Here Wallet’s consistent introduction of new features.

Non-Smart Contract Chain Ecosystem

Chain Signatures enable developers to utilize NEAR as a smart contract “layer” for chains that do not inherently support this functionality.

NEAR smart contracts can function as escrow contracts and manage ownership rights effectively. Building upon this fundamental capability, developers can create swap or lending protocols that accommodate assets from various chains, even those in unique states.

In the Trustless Bitcoin Ordinals Marketplace system operating on NEAR in East Blue, the workflow ensures secure and transparent transactions between sellers and buyers. Sellers set up a deposit account linked to their Bitcoin wallet via the marketplace contract. The marketplace contract exclusively requests MPC signers to carry out transactions on behalf of the Bitcoin account. Sellers have ownership rights over their Bitcoin accounts within the smart contract state, allowing them to deposit and withdraw Ordinals. Upon depositing and listing an Ordinal for 10 USD Coin (USDC), sellers are restricted from withdrawing the Ordinal if an active order is linked to their listing. The marketplace contract safeguards buyers by preventing sellers from making unauthorized withdrawals. Buyers, in turn, deposit USDC into the marketplace contract and proceed to accept the specified 10 USDC listing. The sale is executed only after both parties confirm their consent for the account swap, which is atomically processed in a single block by the marketplace contract.

Bridgeless Cross-chain DeFi

One of the most compelling aspects of Chain Signatures is their capability to obviate the requirement for bridging, instead facilitating cross-chain transactions through an MPC signature protocol. Users have a high demand for DeFi platforms that are functional across multiple chains. Some notable use cases include native cross-chain swaps (such as exchanging $XRP on Ripple for an NFT on Solana), the implementation of a cross-chain lending order book (e.g., utilizing X on Optimism as collateral to borrow Y on Arbitrum), and the ability to restake any asset on any chain while managing the associated reward or slashing conditions from NEAR.

This capability is particularly valuable for apps like DapDap, which is developed on NEAR Protocol and allows users to explore and engage with DeFi apps from different layer 2 solutions within a unified interface. While DapDap currently provides the on-chain frontend component for interacting with layer 2 solutions, users still need to switch network settings on MetaMask to sign transactions. What if users could simply log in to their NEAR wallet and sign transactions on any desired blockchain?

Near Protocol has introduced a novel solution that potentially offers the most cost-effective way to trade assets on-chain without concerns about high transaction fees and latency on legacy chains like Bitcoin and Ethereum. Through a smart contract, users can trade derivative paths, enabling them to trade specific assets deposited in a remote account without involving the entire account in the transaction process. For example, a decentralized exchange (Dex) could maintain path derivations of asset ownership on various chains and facilitate direct asset trading from remote addresses without incurring settlement fees on other blockchains.

Appendix

Disclaimer: This article is provided for informational purposes only and should not be considered as financial advice. The cryptocurrency market is highly volatile and unpredictable. Always conduct thorough your own research and consult with a qualified financial professional before making any investment decisions.