What is Nervos Network?
Nervos Network is a Proof-of-Work (POW) blockchain that launched in 2018 and sought to solve the scalability issues commonly found with layer-1 blockchains. Nervos Network’s mainnet officially launched in November 2019 and since then has attracted a large community of users, dApps, and developers.
Nervos Network Overview
Nervos Networks stands out from other similar blockchains with its multi-layer design that separates state and computation, providing further scalability and flexibility for the network. The Nervos Common Knowledge Base (CKB) acts as the layer-1 or base layer of the network, providing public and secure custody for common knowledge such as assets or identities. It is a public and permissionless Proof-of-Work (POW) blockchain that acts as the consensus engine for the rest of the network.
The CKB layer features cells that store state and cells are created or destroyed when cell content is updated. Every transaction on the network results in the destruction of some cells and the creation of others. This is similar to Bitcoin’s UXTO model in that cells are marked as destroyed (for Bitcoin, a UXTO is marked as spent) but aren’t actually removed from the blockchain.
Layer-2s are built on top of CKB and act as computational layers responsible for handling the majority of the transactions. Layer-2s also generate new states and host dApps.
CKB Overview
CKB is the native utility token of the Nervos Network and represents state storage units. Holders of CKB can purchase storage space of cells proportional to the number of tokens they own. Therefore, a user with 10 CKB can create 10-bytes worth of cells on the network. When a user releases state storage, they receive the equivalent (1 CKB = 1 byte) in CKB tokens.
CKB is paid out to miners from block rewards and transaction fees. Miners receive the full base issuance reward as well as a portion of secondary issuance rewards. Base issuance is very similar to Bitcoin mining as miners are paid a fixed amount of CKB for mining a block. The rewards come from a fixed inflationary schedule that halves the rewards every four years until it reaches the cap of 33.6 billion released CKB. When base issuance ultimately ends, secondary issuance provides incentives to miners to continue securing the network. Secondary issuance also follows a fixed inflationary schedule, releasing 1.344 billion CKB every year in perpetuity. This is paid out to miners for “state rent” rewards and the Nervos Treasury for future development.
Users can also lock their CKB in the NervosDAO to earn a portion of the secondary issuance.
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CKB Tokenomics
There were a total of 33.6 billion CKB at the genesis block. Nervos raised a total of $28 million from the Private Sale and $72 million from the Public Sale. Allocation details are given below:
- 25% were burned
- 21.5% to Public Sale investors (no lock)
- 14% to Private Sale investors (vesting over 2 years with 2/3 released upon Mainnet launch)
- 17% to the ecosystem fund (vesting over 2 years with quarterly unlocks)
- 15% to the team (vesting over 4 years with 1/3 released upon Mainnet launch)
- 5% to strategic founding partners (vesting with annual unlocks until May 2022)
- 2% to the foundation (fully vested on July 2020)
- 0.5% to Testnet incentives (no lock)
Supply Schedule Breakdown:
As stated before, CKB inflates from both base and secondary issuance. For the first 4 years, 4.2 billion tokens will be released from base issuance and this number will halve every four years until the cap of 33.6 billion tokens is reached. Secondary issuance will continue in perpetuity with 1.344 billion tokens issued each year.
FAQs
What is CKB?
CKB is the native token of the Nervos Network and represents state storage units for the chain.
What is PoW?
A consensus mechanism in which miners add valid blocks to the blockchain. This is the same mechanism that Bitcoin uses.
What is Nervos Network? (one sentence answer)
Nervos Network is a multi-layered blockchain network that aims to solve the issues of scalability found with layer-1 blockchains.
