Today multiple crypto platforms are aiming to build the framework for a decentralized Web 3.0. But a fundamental issue is–if a decentralized application is built on one blockchain, how can it connect to Web 3.0 and other blockchains?
You may be familiar with the blockchain “trilemma,” proposed by Ethereum founder Vitalik Buterin, which highlights a public blockchain’s ability to sustain two of these three principles: scalability, security, or decentralization. Ideally, users and developers want all three, and the need for this is what brought about the creation of multi-layer solutions. With this challenge in mind, Nervos set out to create a platform that transcends scalability through universal interoperability, allowing all blockchains to better communicate with each other.
Nervos works to accomplish its mission by featuring security and decentralization, being a sustainable store of value, and creating a Layer 1 (main blockchain architecture) built for Layer 2 (the overlaying network). Additionally, to make the blockchain application universal, Nervos offers developers a suite of integrated solutions to build Universal Apps.
Nervos Network is working to be “the nervous system” of a future “layered crypto-economy,” all powered by the native Nervos token, which can be traded on the Voyager app.
Nervos’ two-layer blockchain
Nervos Network uses a hybrid proof-of-work model (specifically the Nakamoto Consensus) and features a two-layer blockchain solution.
Nervos Layer 1 Blockchain
In keeping with the need to allow for security, scalability, and decentralization to simultaneously be accomplished on the network, Nervos segmented the functions of its ecosystem to operate across two layers. Layer 1, known as the Common Knowledge Base (CKB), is tasked with security for the network. This layer doesn’t do any computation, but focuses solely on validation of transactions, keeping the blockchain honest. CKB is referred to as being a “cryptographic court” because it serves as a regulator for off-chain transactions.
By design, this frees up Layer 2 of the Nervos ecosystem to focus on scalability and providing optimal decentralization to its users. This secondary layer doesn’t just help the Nervos Network provide maximum efficiency but also allows for interoperability with other networks.
Nervos Layer 2 blockchain
The Layer 2 blockchain is built for scalability and state generation, and because transactions are peer-to-peer and not communicated to Layer 1, it allows for transaction privacy. To support a growing user base and to enable flexibility and creativity when designing systems, the network’s Layer 2 protocol allows users to build with customized cryptographic primitives (a well-known piece of foundational cryptography that builds blockchain protocol the way notes build a song).
Layer 2 allows developers to customize their trade-offs, finality, privacy, and trust models to best suit their applications and users. This ability to customize also makes it much easier to upgrade the network, making it “future-proof.”
To help developers launch side-chains, Layer 2 features a proof of stake blockchain framework called "Muta" and a side-chain solution based on it by the name of "Axon.” Muta is a highly customizable, high-performance blockchain framework. It supports high throughput and various virtual machines. Muta makes it much easier for developers to build high-performance blockchains with highly customized protocols. Axon is a complete solution built with Muta and enables developers to focus on building applications and not expend energy on building infrastructure or cross-chain protocols. Nervos Network hopes for “a future in which all Layer 2 protocols are standardized and seamlessly interoperate.”
Along with supporting its own Layer 1, Nervos also works to fix scalability issues on the Ethereum Layer 1 blockchain. Many Layer 2 solutions are inspired and spurred by the traffic issues on the Ethereum network. Nervos creators recognized the importance and value in dApp development and, taking notice of the user influx making ETH gas fees soar, made its Layer 2 available for more cost-effective dApp transactions and enhanced scalability for developers. This is possible because the Nervos Network proof-of-work concept was built to adjust to different levels of user traffic. If Ethereum is 3G, Nervos is its 5G solution.
Nervos’ two blockchains work together to create a highly interoperable network that prioritizes security and scalability.
Nervos Network’s native currency: CKB
Nervos Network’s native currency, CKByte, is a unique and advanced token that fuels the Nervos Network. The “crypto-economic design” makes CKB a use case for “store of value” and captures the network’s total value. The design also allows for CKB to facilitate transactions and preserve long-term value to scale with network growth and value creation. This increases security and aligns the interests of users, miners, developers, and Node operators.
CKByte is unique because of its multi-use abilities, such as being a medium of exchange, a store value, executing smart contracts, an instrument in dApps, renting out space on the blockchain, and more. It is both a powerful tool for the Nervos Network and a considerable standalone, store of value asset.
Latest news and partnerships
xUDTs: The Next Stage of UDTs
After successfully integrating sUDTs, tokens that users can easily create to tokenize assets secured on Nervos’ CKB Layer 1 blockchain, Nervos launched xUDTs. These are an extension of sUDTs to allow for defining more behaviors a UDT might need. The addition of xUDTs offers a new world of possibilities and complexity for user-defined tokens.
Nervos First U.S. Crypto Listing via Voyager
Voyager was the first to list Nervos (CKB) in February 2021, allowing U.S. users to directly access and trade CKbyte. Nervos co-founder Terry Tai said, “we welcome U.S. investors to our ecosystem and look forward to introducing CKB and Nervos to crypto enthusiasts around the world.”
$5M DeFi Ecosystem Grant
Nervos Network pledged $5 million dollars to blockchain and fintech entrepreneurs who are working to build new solutions for the future of decentralized finance (DeFi). They feel this is the right step for them to take, stating, “we feel our ecosystem is well placed for teams to build applications that can be universal and user friendly.” Grant applications are open to anyone building a DeFi project and looking to “solve any of the inefficiencies and inequities that currently plague the financial services industry.”
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