Nervos (CKB): The must-know Bitcoin scaling solution

远山洞见2024/07/09 06:31

By:远山洞见

I. Project introduction

Nervos Network is a decentralized blockchain ecosystem designed to address the scalability and interoperability challenges of blockchain. Its core layer is called Common Knowledge Base (CKB), which uses a proof-of-work (PoW) consensus mechanism similar to Bitcoin to ensure high security and decentralization. CKB tokens are not only used to pay miner fees, but also to store data, with each CKB representing 1 byte of storage space on the Nervos blockchain.

Nervos adopts a Modularization architecture, which allows it to scale to millions of transactions per second through multiple Layer 2 networks without sacrificing security and decentralization. The network supports all cryptographic primitives and can seamlessly operate and interoperate with multiple heterogeneous blockchains, providing unparalleled flexibility and scalability.

In addition, Nervos allows developers to create decentralized applications (dApps) that can run on various blockchain systems. Its economic model aims to incentivize participants and support the sustainable development of the network by providing network resources and storage space.

II. Project highlights

Layered Architecture: Nervos adopts a unique layered design that separates the base layer (Layer 1) from the application layer (Layer 2), ensuring high security and decentralization while providing flexibility and scalability. The base layer is called Common Knowledge Base (CKB), responsible for consensus and security, while the application layer handles high transaction volume and smart contract execution.

Strong interoperability: Nervos' design supports interoperability with other blockchains, achieving cross-chain transactions and data transmission through its innovative Force Bridge technology. This bridge enables assets and information to move seamlessly between different blockchains, promoting a more interconnected and collaborative blockchain environment.

Innovative Cell Model: Nervos introduced the Cell Model, which treats all assets and data as cells, providing a flexible and efficient way to store and manage information. The model is compatible with multiple blockchain protocols and facilitates integration with different networks.

Economic model and token usage: CKB tokens are not only used to pay miner fees, but also to store data. Each CKB represents 1 byte of storage space on the Nervos blockchain. Its token economic model aims to incentivize participants, ensure that miners continue to receive compensation, and support the long-term development of the network.

Nervos Network uses innovative layered architecture and interoperability technology to provide a highly secure, flexible, and scalable blockchain ecosystem through a unique Cell Model and economic model.

III. Market value expectations

With the increasing demand for scalability and functionality beyond the original functions of Bitcoin, the Bitcoin L2 market is also continuously developing. Various L2 solutions, such as Lightning Network, sidechains, and Rollup, aim to increase Bitcoin throughput by moving transactions off the main chain without compromising security. However, these solutions often bring new complexity and security challenges.

The difference of Nervos lies in extending the RGB protocol through RGB ++, providing native extensions for Bitcoin and integrating deeper smart contract functions directly related to the Bitcoin UTXO model. These functions promote a more seamless and secure extension of Bitcoin's practicality.

In addition, work is underway to connect the payment channel network with the Lightning Network, which will make CKB more scalable and suitable for many blockchain applications.

Nervos has extended the Bitcoin protocol through RGB ++, achieving more secure and seamless smart contract functions, improving its scalability in blockchain applications. Currently, it is still in a low value area in this round, and we are expected to see the CKB stable Top market cap ranking in this cycle.

At the same time, in the short term, Nervos Network recently launched a vulnerability bounty program worth up to $1 million, inviting white hat hackers to help enhance the security of its CKB blockchain, and announced a strategic partnership with Mobitapp to integrate Joy Protocol to enhance the convenience of BTC, ETH, and CKB asset management and trading. It is expected that the short-term price will be affected by positive events and have the conditions for market speculation.

IV. Economic model

CKB is the native token and governance token of Nervos Network. In order to fully reflect the needs of the value storage platform, the native token CKB has designed two publishing methods: basic publishing (also known as primary publishing) and secondary publishing.

The total amount of CKB base publishers is 33.60 billion. Similar to the publishing schedule of Bitcoin, the amount of CKB base publishers is approximately halved every four years until all the base publishers are mined and put into circulation.

This means that the first four years through the base publish amount is 16.80 billion CKB, which is 4.20 billion per year. All CKB of the base publish is rewarded to the miners, that is, a fixed amount of CKB is paid to the miners for processing transactions and protecting the network for each block. As the Nervos network develops and the CKB token becomes more valuable, the rewards obtained through the base publish will gradually decrease and eventually stop, but it will not have a negative impact on the security of the Nervos network.

The purpose of secondary publishing is to collect state rent, ensuring that regardless of the on-chain transaction volume of CKB, miners will be compensated for permanently protecting the security of the network.

There is no upper limit for secondary publishing, following a fixed publishing plan of 1.344 billion CKB per year. However, unlike basic publishing, which is completely miner-oriented, secondary publishing is distributed among miners, NervosDAO depositors, and treasury funds.

It should be emphasized here that the inflationary impact caused by secondary publishing is limited and only affects on-chain state occupants. This means that CKB can act as both a deflationary token for long-term holders and an inflationary token for blockchain users.

Among them, when the mainnet was launched in November 2019, the genesis block minted 33.60 billion CKB tokens, and the specific distribution is as follows:

Public offering (21.5%): The largest portion of the genesis block was offered to public investors in 2018 and was fully released when the mainnet launched in November 2019.

Ecological Fund (17%): The Ecological Fund will support third-party developers within the Nervos ecosystem. In the Genesis Block plan, 3% of this grant was already in place when the mainnet was launched, and the remaining part will be distributed within two years until December 2022.

Team (15%): Reserved for project teams, with a four-year lock-up period ending in May 2022.

Private placement (14%): Provided to private investors in July 2018. 66.60% of it was released when the mainnet launched, and the remaining part ended the two-year lock-up period in 2020.

Partners (5%): This grant is reserved for strategic partners to help establish the Nervos Network, with a lock-up period of four years.

Foundation (2%): These rewards are used for foundation control.

Testnet rewards (0.5%): These rewards are all distributed to participants in the testnet and vulnerability bounty program when the mainnet is launched.

Destruction (25%): In the genesis block, this part is directly destroyed to ensure that miners and treasury funds continue to obtain secondary publishing.

V. Team and financing

The founding team of Nervos Network comes from core members of well-known organizations in the industry such as Ethereum, imToken, and Yuncoin. Among them, Jan Xie, the chief architect and head of the research team, was a core R & D member of Ethereum; CEO Terry Tai is the core developer of the cryptocurrency/digital currency exchange Yuncoin; co-founder and COO Daniel Lv was the CTO of the world's largest Ethereum wallet imToken; co-founder and North American team leader Kevin Wang is the founder of Launch School and a former IBM engineer.

Previously, the publicly announced A round and public fundraising round totaled $100 million, with funding from institutions such as Blockchain Capital, HashKey Capital, Sequoia China *, Wanxiang Blockchain *, 1kx, Blockchain Capital, and Polychain.

VI. Risk Warning

1. The cryptocurrency market is volatile, and large price fluctuations may lead to investment losses. Therefore, cautious decisions should be made and market risks should be fully understood.

2. It may face risks such as technical vulnerabilities and hacker attacks, which affect the operation of the platform and the interests of investors.

VII. Official link

Website： https://www.nervos.org/

Twitter： https://x.com/NervosNetwork

Telegram： https://t.me/NervosNetwork

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.