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Nervos Network (CKB) – A Gold Standard Altcoin with Complete L1 and L2 Solutions

With the likes of SHIBA, Safemoon, and recently Apecoin dominating crypto altcoin markets, one does often question what it takes for an altcoin to become a top contender. Perhaps it is innovation; does it introduce new technologies? Or perhaps it improves upon existing solutions. Maybe it has a cute dog as its logo. Or maybe it is simply the hype.

Whatever it is, one thing we can agree on is that an altcoin with good foundations and utility will likely fare well in the long run. It may not necessarily succeed; but it’s chances of survival – and perhaps success - in a sea of millions of different cryptocurrencies, will be much better.

Well, dear reader, one such contender is the Nervos Network ecosystem.

What is the Nervos Network?

Well, in a single sentence: Nervos Network is much more than a cryptographic token; it is a decentralised ecosystem.

Layer 1 / L1 – Nervos Network Basics

The Nervos Network’s foundation starts at the base level; the Nervos Network blockchain. This blockchain is secured by a proof-of-work consensus and has the native token CKB. Contrary to popular belief, Nervos Network isn’t called CKB for short; CKB actually stands for Common Knowledge Base. A wide network of miners from around the world mine CKB tokens, strengthening its decentralisation.

Now, you may ask, why is it called a Common Knowledge Base? The idea behind it is that CKB tokens can be locked up to store decentralised applications on the Nervos Network blockchain. One CKB token = 1 byte of data on the blockchain. We explore further in the next section, Layer 2 / L2 – Nervos Network’s Scalability Solution.

As for the Tokenomics, there is no limit on the number of CKB tokens that can be mined (much like Ethereum), only that the difficulty of the algorithm is adjusted (dependent on network hash rate) such that the block times are approximately 10 seconds.

The purpose of the L1 Nervos Blockchain is to act as a rock-solid state verification system of all the L2 solutions built on top of L1 Nervos. 

Layer 2 / L2 – Nervos Network Scalability Solution

A Layer 2 or L2 solution is, at its essence, another framework or protocol built on top of the L1 solution. In this case, this could be a dApp (decentralised application) that sits on top of the Nervos Network blockchain.

One example of this is Yokaiswap; a decentralised exchange. To use Yokaiswap, users can transfer tokens from L1 to L2. Users are able to stake and farm tokens to earn $YOK (Yokaiswap’s DEX token) or use the swap feature to trade tokens. These tokens can then be withdrawn back to L1 and then, if desired, they can be bridged to the Ethereum blockchain or BSC using Force Bridge.

Another great L2 dApp built on Nervos is “.bit” (previous known as DAS). .bit is a Web3.0 self-sovereign data container; in other words, it is a decentralised account service. Let’s say you own a .bit account; for example, d0naldtrump.bit. This means you own the decentralised web address You can customise this webpage, or even have it redirect to another website. It is similar to an Ethereum Name Service address. Read more in this article.

These L2 solutions that are built on Nervos will send its transactions at regular intervals to be validated by the Nervos Network Blockchain (L1). In this manner, the L1 blockchain secures the L2. A little more precisely, (note this is still an oversimplification) a certain number of L2 transactions are hashed and sent to the L1 for verification (state proof). If any of the L2 transactions are “illegal” (for example, if a rogue L2 minted CKB from thin air), then the whole block of transactions that were sent together are deemed invalid by the L1.

Exchanges and Wallets

The CKB token has been listed on many exchanges such as Binance, Kraken,, and many more. You can find more information on this page of the official Nervos Network website

The two most popular wallets used to store CKB is the official Neuron Wallet (for computers) or SafePal (iOS and Android). More information can be found with the same link as above.


Nervos Network is a fairly new ecosystem and the CKB token has seen two “pumps” during the 2021 bullrun. As of writing this article, CKB is traded at $0.0125 USD per token with a total supply of 36.2B. The total (fully diluted) market cap is hence $453M USD. About 6 billion of the 36 billion token supply is locked in both staking and liquidity farming. This puts the actual circulating supply worth $380M USD.

Base Issuance and Secondary Issuance

CKB tokens can be minted via two methods – Base Issuance and Secondary Issuance. Let’s explore what these mean. Also note that in the genesis block, there were effectively 25.2B CKB tokens minted.

Base Issuance

Much like Bitcoin, Nervos Network has a halving rate of 4 years. The initial block rewards mean that there will be 16.8B CKB tokens mined in the first 4 years of the blockchain. The next 4 years, a total of 8.4B, 4.2B the next 4, and so on. The total amount of CKB mined will slowly approach 33.6B. 

Secondary Issuance

A second mechanism to mint CKB tokens is Secondary Issuance. In addition to the Base Issuance as described in the previous section, every year a constant 1.344B CKB tokens minted. This is distributed to the miners, DAO depositors, and a treasury fund for the core Nervos team. As a result of this fixed issuance, the inflation is a predictable arithmetic occurrence. Assuming the Base Issuance to be close to nil, the percentage increase of the total supply of CKB tokens decreases every year due to this constant 1.344B annual inflation value.

Read more about Nervos tokenomics here

Wrapping Up

Nervos Network is still in its early stages; it’s driven by an excellent team and the fundamentals behind the technology is indeed promising. Over the next 2 years, the first halving will occur; who knows how the price will react then? Perhaps at that point, many developers will have already deployed their dApps on the Nervos Network, and it gain in popularity.

Or maybe it will remain a shadow forever.

In any case, in this game of altcoin roulette, Nervos Network seems to be the promising bet yet.


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