The Mooniswap decentralized exchange protocol, developed by DEX aggregator 1inch, will be the first Ethereum DeFi protocol to develop on NEAR, a sharded smart contract platform.

As part of a collaboration announced on Tuesday, the 1inch team pledged to port its automated market maker protocol to NEAR. Sergej Kunz, CEO of 1inch, told Cointelegraph that its Pathfinder aggregation algorithm will be eventually implemented as well.

The NEAR iteration of Mooniswap will remain independent from the existing version on Ethereum for the time being. While users will be able to use the NEAR Rainbow Bridge to bring Ethereum tokens to the new blockchain, the liquidity pools between the two platforms will be separate.

NEAR is a smart contract platform claiming a much higher current scalability than Ethereum. Unlike other protocols like Polkadot (DOT) or Cosmos (Atom), there are no independent blockchains or parachains on NEAR. Instead, the protocol offers a single chain that is sharded at the level of individual blocks. The goal of this construction is to simplify development by abstracting the underlying architecture into a familiar format. The NEAR Protocol has a single environment shared by all decentralized applications, similar to Ethereum’s current architecture.

Kunz said that the existing scaling technology on NEAR will allow the team to “experiment with sharding and be prepared for the arrival of Ethereum 2.0.” The protocol is set to be deployed on NEAR in 2021.

Mooniswap uses a unique system of delayed virtual prices to prevent front-running and help reduce impermanent loss by reducing the profit collected by arbitrage traders. Under this system, changes to the effective price of an asset from previous exchange transactions are gradually enacted over a fiveminute period.

Mooniswap is among the first major Ethereum DeFi protocols that committed to building on another blockchain. NEAR had previously inked a deal with the Balancer protocol to establish funding for independent developers, though the DeFi app did not commit to building a new iteration of its protocol.

After scaling issues on the main Ethereum chain became evident, DeFi protocol developers began looking into both Ethereum-native layer-two solutions and other layer-one protocols for solutions.

Though some protocols got a head start, the race has yet to officially start, as most scaling solutions are set to be released or completed in 2021.