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Academy > Crypto Insights > What is Nervos Network (CKB): One-Stop Shop for DApp Development >

What is Nervos Network (CKB): One-Stop Shop for DApp Development

2022-10-21 10:11:09

Summary

  • The Nervos Network is both a Layer 1 and 2 Proof-of-Work blockchain that aims to solve the issues of interoperability and scalability.
  • It does this by providing a suite of tools called the Universal Passport for the creation of “Universal Applications” i.e.  apps that can work across every chain in the ecosystem.
  • The CKB coin is the native token of the Nervos Network; it allows holders to purchase space on the blockchain and prevent low-quality DApps from taking up resources and creating congestion on the chain.

nervos network (ckb crypto)

What is Nervos Network?

Nervos Network is a Proof-of-Work Layer 1 and 2 blockchain platform that aims to solve, or at least alleviate, the problem of interoperability.

Its strategy–become a central hub for all things decentralized, by providing a suite of developer tools called “Your Universal Passport to Blockchain.”

This will in turn enable the creation of decentralized apps (DApps) that can work on various chains. It states on its website,

“The frustration of multiple wallets, exchanges and seed phrases is no more with Nervos,”

Nervos Universal Passport features

An infographic describing how Nervos’ Universal Passport feature works. (Source: nervos.org)

From the developers’ perspective, Nervos enables them to reach a massive base of potential users on other chains, even as they build on their blockchain of choice.

How Does the Nervos Network Work?

There are three key elements of the Nervos Network blockchain:

  1. The first is the primary Layer-1 element (called the “Common Knowledge Base”) that ensures the blockchain’s validation and security, relying on Proof-of Work-consensus to ensure decentralization.
  2. The second element is the Layer-2 collection of protocols (called “Godwoken”), which keeps the Layer 1 free of congestion by handling the bulk of transaction processing.
  3. The third is the CKB crypto, with a more detailed explanation in the next section.

CKB Crypto and Nervos Network

Nervos Network’s native token, the Common Knowledge Byte coin (CKByte or CKB for short), enables the purchase of 1 byte of virtual space on the Layer-1 blockchain.

But for what purpose?

This is the unique selling point of Nervos Network–the CKB token enables users to “hold space” of 1 byte on the blockchain so that it prevents low-quality DApps from taking up space on the blockchain. This addresses the problem of congestion which leads to high gas fees.

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Who Owns the Nervos Network?

The current Nervos team numbers almost 90 people, but here are the main names associated with this project’s existence.

Nervos’ co-founders are Terry Tai, Kevin Wang, and Daniel Lv, all three of whom have experience developing digital ventures.

Tai, who is the main developer of the Yunbi crypto exchange, graduated in Computer Science from SiChuan University and co-founded a number of businesses. Perhaps the most popular of these is Teahour.FM, a developer-oriented podcast that enjoys a large following worldwide. Tai is also the host of the program.

Wang is the lead researcher for the Nervos project and also oversees its tokenomics. He has a degree in Electronics and IT from Beijing Jiaotong University and a Master’s Degree in Telecommunications and Networks from The University of Pennsylvania. He worked for close to a decade as a software engineer at IBM. He is also the co-creator of Teahour.FM, and the online developer learning platform Launch School.

The third co-founder of the Nervos blockchain network, Daniel Lv, is responsible for creating and maintaining the project’s faithful community. He graduated in Mechanical Engineering from the University of Shanghai for Science and Technology. He has extensive professional experience as a software engineer, having also held the position of CTO at Yunbi. He is the co-creator of two other crypto projects, among them imToken, which was one of the most popular Ethereum storage solutions in China.

What is the Nervos DAO?

The Nervos network also operates a Decentralized Autonomous Organization (DAO). DAOs are decentralized governing bodies that are a popular part of many crypto ventures. The main idea is to give management power to the community of stakeholders, i.e., to avoid a single-person management model.

For the Nervos DAO, holders of the blockchain’s native token, CKB, can receive rewards by locking up their coins in the Nervos DAO. According to the network, this is a way to ensure the sustainable value of CKB tokens and protect them from secondary issuance dilution.

Nervos’ creators have ensured this through several elements embedded in CKB’s tokenomics:

  • Firstly is the limited amount of tokens that will be offered during the main issuance, which will span years into the future. Here, Nervos developers have followed the Bitcoin model of releasing a limited number of tokens at lengthy intervals.
  • CKB will also be available through a secondary issuance aimed at operational support of the project, including rewarding miners and depositors. It is against this secondary issuance that CKB holders can protect themselves by depositing their available tokens in the Nervos DAO.

In order to offer this protection, the annual interest rate (APR) that depositors will receive will correspond to the percentage increase in CKB supply resulting from the secondary issuance.

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Nervos Network’s Explosive Growth

Nervos dates back to 2018, while the platform’s mainnet was launched a year later. Since then, the project has been in full swing, and the massive team, and the fact that Nervos also has several announced open positions, show that the team intends to continue growing.

The all-around faith in the project’s future is evidenced by the several rounds of investment the Nervos network has received since inception. Even in 2018, the blockchain was supported by several big players in the crypto industry, including Sequoia. When it launched on CoinList around the time of the mainnet release, Nervos raised over $70 million in token sales.

Technical successes include Forcebridges with Ethereum as well as several partnerships and integrations with other crypto projects such as Ankr, Kava, and Bybit.

CKB Crypto Price History

Seven-day CKB price history from 4 to 11 Oct, 2022 (Source: Coinmarketcap)

The CKB crypto coin reached its all-time high of $0.04412 (just over 90% growth from the current price) on 31 March 2021.

Price corrected for the rest of the year, before rising to $0.03 in November 2021, as Bitcoin achieved an all-time high of $69,000.

At the time of writing, CKB is trading at $0.0037, with a circulating supply of 33.34B tokens for a market cap of almost $125 million.

Is Nervos Network A Good Investment?

Since its inception, Nervos Network has proven to be diligent in fulfilling the goals set out in its roadmap. Its differentiating point about using tokens to “hold space” on the blockchain is also first-of-its-kind, with positive ramifications for the overall blockchain infrastructure if it proves effective.

It may be too early to stamp a seal of investing approval on it, but this is definitely one project to keep an eye on.


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