NERVOS NETWORK - ($CKB)?

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9 Mar 2024

Nervos Network: The Foundation of a Layered Crypto-Economy

The blockchain industry is continually evolving, with various projects aiming to address the diverse needs of the digital economy. One such project is the Nervos Network, a unique and innovative blockchain infrastructure designed to provide a scalable and secure foundation for a new era of blockchain applications.

Layered Architecture

At the heart of Nervos lies a dual-layered structure, which separates the blockchain's responsibilities into two distinct layers:

Layer 1: The Nervos Common Knowledge Base (CKB)

The CKB functions as the foundational layer of the Nervos Network. It is a public, permissionless blockchain that is responsible for generating trust and ensuring the security of the entire system. The CKB adopts a Proof-of-Work (PoW) consensus mechanism, which is designed to optimize for openness, correctness, and high performance in distributed environments.
The programming model on CKB is stateful and Turing-complete, relying on the CKB VM (Virtual Machine) and the cell model to facilitate the efficient state generation on Layer 2. This separation of state generation and verification allows for a more flexible and efficient blockchain system.

Layer 2: Generation Layer

The upper layer is where state generation occurs. It is designed to handle the bulk of transaction processing, enabling scalable and efficient applications. By offloading most of the computational work to Layer 2, Nervos can achieve high throughput without sacrificing the security and decentralization provided by Layer 1.

Transactions and State Transitions

In the Nervos CKB, transactions are the mechanisms through which state transitions occur. They can involve transferring cells, updating data within cells, or both. Every transaction is atomic, ensuring that all included state changes are executed together or not at all. Transactions consist of dependencies (deps), inputs, and outputs:

Deps: Dependent cell set needed for transaction verification, which must reference live cells.
Inputs: Cell references and proofs (e.g., signatures) that authorize the transaction creator to use the cells.
Outputs: New cells resulting from the transaction.
This design is particularly beneficial for light clients, as it simplifies the synchronization process and enhances the network's decentralization.

Economic Model

The Nervos economic model is crafted to align the incentives of all network participants, including users, developers, and node operators. The model emphasizes state over computation, utilizing cell capacity and transaction fees as the primary incentives.

State Cost and Cell Capacity

The creation and storage of states on the CKB network incur costs in terms of both computation for verification and ongoing disk space for storage. To address this, Nervos introduces a cost model that accounts for the space occupied by the state and the duration it is stored. This model encourages efficient use of cell capacity and ensures that users pay a fair price for network resources.

Computation Cost and Transaction Fees

Transaction fees in CKB are determined by the computational work required for verification. Miners can select the fee levels they are willing to accept, and users have the flexibility to pay fees using cell capacity or any other user-defined assets, fostering a competitive fee market and a lower barrier to entry for new users.

For a comprehensive understanding of the economic model, interested parties are encouraged to review the Nervos CKB Economic Paper (RFC 0015).

Network Node Types

The Nervos Network can be categorized into three types of nodes, each playing a distinct role:
Mining Nodes: Engage in the consensus process and are responsible for creating new blocks.

Full Nodes: Act as the verifiers of the network, validating new blocks and transactions.

Light Nodes: Designed for mobile devices, these nodes trust full nodes and store only a subset of cells relevant to their interests.

A healthy balance between these node types is crucial for maintaining a decentralized and robust network.

The Nervos Network represents a forward-thinking approach to blockchain infrastructure. With its layered architecture, it provides a scalable and secure base for a wide range of decentralized applications. The economic model incentivizes all network participants to work towards common goals, while the transaction and state models ensure efficiency and ease of use for both light and full clients. As the blockchain space continues to grow, Nervos stands out as a platform that not only addresses current challenges but also paves the way for the future of the crypto-economy.