KuCoin AMA Series — Nervos (CKB) — Full Transcript

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KuCoin AMA Series — Nervos (CKB) — Full Transcript

Dear KuCoin Users,

Time: September 11, 2020, 18:00–19:15 (UTC+8)

KuCoin hosted an AMA (Ask-Me-Anything) session with Nervos (CKB) in the KuCoin Exchange Group.

Introduction for Nervos (CKB):

The Nervos CKB (Common Knowledge Base) is the layer 1, proof of work public blockchain protocol of the Nervos Network. It allows any crypto-asset to be stored with the security, immutability and permissionless nature of Bitcoin while enabling smart contracts and layer 2 scaling. It captures the total network value through its “store of value” crypto-economic design and native token, the CKByte.

Official Website:

White Paper:

Guest: Ben Waters, Head of Operations at Nervos

In over a decade long career in the digital and startup space, Ben brings a wealth of experience in business operations, strategy, marketing and management working across Europe, Asia Pacific and North America. In 2019, Ben joined Nervos as Head of Operations — a collection of protocols and a public blockchain ecosystem aiming to solve the biggest challenges facing blockchains like Bitcoin and Ethereum today.

Prior to joining Nervos, Ben served as Head of International Markets for IOST, overseeing ecosystem development including strategy, operations, marketing and communications. Previously he was Managing Director for Lion & Lion, a digital marketing agency with offices across Asia Pacific and clients including Coca-Cola, Nestlé and L’Oreal. Before that, Ben was Managing Director of an eCommerce startup which went from a local operation to over 100,000 users across 11 countries.

During his career, Ben has worked and consulted with various tech and startup companies and has a strong passion for personal freedoms and equality, digital economies and disruptive technology. Ben believes technological innovation can be a driving force for good by empowering individuals and creating a more borderless and connected world.

Q&A from KuCoin

Q: Can you give a brief introduction about Nervos?

A: Nervos is a collection of protocols and a public blockchain ecosystem aiming to solve the biggest challenges facing blockchains like Bitcoin and Ethereum today.

The layer 1, proof of work blockchain of Nervos allows any crypto-asset to be stored with the security, immutability and permissionless nature of Bitcoin while enabling smart contracts, layer 2 scaling and the capturing of the total value of the network through its “store of value” crypto-economic design and native token, the CKByte (CKB).

Q: Please tell us more about your team? How many people are in the team?

A: The team got its start in China, from a team of founders each with deep roots in the blockchain space, from founding massive Ethereum community EthFans, wallet ImToken, mining pool SparkPool and blockchain software development firm Cryptape.

Now the team is almost 100 people, about half of which is engineering and research and the rest operations, marketing, community, product and business development. Many members of the team are on their 2nd or 3rd project in the space, so we have a strong blockchain culture and this comes through in the engineering decisions and priorities of the project.

Q: What’s the story behind Nervos’ success? What was that vision when it first emerged as an idea? Are there any special prototypes or upcoming NERVOS updates that you want to show/share with us?

A: Nervos really began with a different design decision for smart contract platforms. Nervos uses the “cell model”, inspired by Bitcoin’s UTXO model as opposed to the popular “account model” used by smart contract platforms.

It has lots of implications, for scalability, security, and flexibility. Transactions can be processed in parallel without sharding. Users have full control over their assets (not smart contracts).

The project attracted a number of world-class researchers and engineers, and additional innovations such as CKB VM, NC-Max, and the economic model were added to the project. Each one of these is a conversation of its own.

The co-founders have deep roots in Ethereum and other crypto communities and this has provided a great deal of support to the project on the research and operational side. From the start of the project, it’s been community-driven, to me this is one of its greatest differentiators.

Q: Could you briefly explain the milestones that the Nervos team will accomplish by the end of this year or are going to reach in the future and what you might look like in 2020 and beyond?

A: In the near term there is a focus on creating a world-class developer experience and the building up of Layer 2 protocol support. This includes research on new smart contract language options and SDKs, currently Rust is the go-to language for creating smart contracts on Nervos. User-defined token standards (similar to ERC20 of ERC721) are under development, as well as light client functionality, which would allow for something as simple as a web page, email client or Raspberry Pi to identify the longest chain and validate particular transactions/information.

There is a large amount of ongoing research and development on payment channels, sidechains and rollup-based scaling solutions. The Muta sidechain framework will allow anyone to launch a blockchain platform and leverage the security of CKB. Everything listed above is the focus for this year.

Looking ahead, we can expect a lot more developer activity, hackathons and user-facing products utilizing the tool sets that are being built now. We also expect increased interest from businesses and individuals in operating Layer 2 infrastructure to broaden the network’s capabilities.

Q: What are your views about the next killer dApp area for blockchain? What will be your prime focus for mass adoption like Gaming, DeFi or something?

A: Personally, I am most excited about the broad Defi area that includes finance, payments, stablecoins, value storage and cryptoeconomics.

We are just starting to see the initial growth in this area and what the “future of money” may look like.

With Nervos, so much more is possible with regards to DeFi and solves many of the challenges DeFi experiences on other blockchains like Ethereuem.

So I think we will start to see some truly innovative and revolutionary use cases coming out on Nervos that are not possible on any other blockchain.

Q: I think Nervos’ core team has already developed a layer 2 sidechain called Muta. What kind of use cases do you have there?

A: Muta enables anyone in the world to launch their own blockchain platform while leveraging the security and finality of CKB layer 1 of Nervos.

Muta is a high performance blockchain framework for use by both public and consortium chains. It can be customized as a PoA, PoS or DPoS chain and deployed with different economic and governance models. The interoperability with CKB and other Muta chains is a built-in feature, allowing every Muta powered chain to interact with each other while utilizing the high security and finality of the PoW CKB base layer.

Muta is an important division of the Nervos Network. It uses CKB as the value and security anchor to extend user scenarios and scalability. For example, the Nervos Foundation is cooperating with Huobi Group in building the Huobi Chain, to explore regulation-friendly decentralized financial services, which is based on the Muta framework. Muta will play a pioneering role in the mass adoption of Nervos Network.

Twitter Questions

Q: What is your approach to outsider developers? Is your system open to them? Do you have any bounty programs to encourage them? And are there any criteria to be eligible for development?


A: Yes, developer adoption is our primary focus for the Foundation as well and a lot of work is going on behind the scenes to make this happen.

We have a 30 million USD ecosystem fund which is being used to spearhead adoption for the ecosystem. This includes our Infrastructure grant program which has awarded over 1 million USD of grants to date and several very exciting grant projects are underway or completed, including Bitcoin interoperability, Zero Knowledge Proofs, Browser wallet (like MetaMask), Interoperability bridges, IDE’s and developer tools, etc.

We also recently launched our incubator, CKLabs — this fund projects and teams with up to 100k USD for building their use case and app on Nervos. Additionally we will be opening Dapp and use case grants, marketing and community grants and other initiatives like hackathons, code jams and learning courses to attract more developers to come experiment and build unique applications on Nervos.

Yes, you can check out our grant program here:

You can also see all current, completed and ongoing grants here:

We have many plans for dev workshops, hackathons and courses so make sure to sign up to our mailing list here:

Q: Why do you consider Proof-of-Work (PoW) mechanism as the best option as a consensus mechanism for Nervos Network? What kind of advantages does it have over for example Proof-of-Stake (PoS) mechanism?


A: We believe that PoW’s permissionless participation is a requirement for infrastructure at the foundation of global economic activity.

The foremost goal of layer 1 is to ensure that the blockchain is as decentralized, secure and neutral as possible. While PoS systems have a role to play in the decentralized economy, in our opinion they do not meet the requirements of a truly open and decentralized layer 1.

Block creators in PoS systems are rewarded in a deterministic way, based on the amount staked, with very low operational capital requirements. As the system grows, the impact of natural advantages provided to first moving businesses and individuals will grow. In a PoS system, it is possible that power concentrates in the hands of a few stakers. Though PoW systems have a similar problem with mining concentration, the cost to remain in power in a PoS system is significantly lower. We believe PoW is the only tried and tested consensus algorithm for true decentralisation, and many of the other novel and un-tested mechanisms do not ensure long term sustainability which is a fundamental requirement of a global layer 1 system.

Q: Do you see who your biggest competitors are right now, and what do you think of your own projects in comparison to those projects? and what weaknesses in your project need to be addressed in order for users to choose your project over a competitor?


A: I think there is too much tribalism in crypto, so I don’t want to talk too much about competition. However, I think the advantages of the system come down to key innovations:

1) the programming model: cell model, which allows for parallelizing transactions on the node (increase transactions per second) and also keeps users in control of assets instead of smart contracts (increases security, reduce smart contract hacking damage)

2) CKB virtual machine: a simulation of actual hardware, allowing the blockchain to do anything a computer can do and also allowing for very accurate “gas” calculations

3) Economic model: Nervos charges state rent on users storing data on-chain, which is delivered to miners ensuring they always have a fixed component of a block reward.

For Nervos DAO depositors who are not using their CKB to store data, they receive compensation to offset inflation, creating a “store of value” fixed issuance situation. The purpose of the project is to build a permissionless network that serves as infrastructure of a digital economy and can improve the Internet’s capability to create trust and provide native financial services. Demand for the CKB token is directly tied to adoption of the Nervos network, CKB is scarce and it is also required to store data on-chain. As the number of users and applications increase, so will demand for CKB.

Q: Does Nervos have any Coin Burn / BuyBack system or any plan for Token Burn to increase the value of Token & attract staking Investors to invest?


A: Yes, currently all secondary issuance that is not being paid to miners or token holders that have deposited in the Nervos DAO is being burned.

These tokens from the secondary issuance in the long term will be used for decentralized governance, and when the community chooses to, can implement a hard fork to stop burning these tokens and receive them to a community fund instead. They can then be allocated by DAO voting and community governance.

Q: How does NERVOS solve the block chain trilema?


A: Nervos takes a layered approach to scaling the network. You can compare this to BTC, create a permissionless and very secure and decentralized layer 1 blockchain (PoW and no sharding), then build layer 2 protocols on top of it that leverage the layer 1 security.

There have been enormous advancements in layer 2 blockchain scaling technologies over the last few years, and the idea with Nervos is to be able to support all of them, as well as anything that may come in the future. This is accomplished with CKB’s flexible virtual machine that allows for permissionless upgrades of its cryptographic functionality.

Regarding centralization, one of the design goals is to allow for users to run full nodes on consumer hardware, so a large network of full nodes that can be trustlessly synced from the genesis block is an important part of this. Centralization is also addressed with the proof of work function, which has been intentionally designed for simplicity (along with security of course), to lower the barrier to entry for hardware manufacturers and create many producers of ASICs that can mine on Nervos.


Q: You say that even a smart contract does not have permission for the asset. What mechanisms work in this case?

A: Yes correct. For example, if you are using USDT or any other smart contract based token on Ethereum, that smart contract is centrally controlled by whoever deployed it and owns the private keys. So, if someone wanted to, they could censor, change or even remove these entirely.

On Nervos, data is stored in cells, and those cells are records on the ledger (UTXO’s). So once deployed, anyone can use and access them, and no one has control over these “smart contracts”. This is especially important when they become building blocks for other smart contracts for example in DeFi.

Q: How important is the community to Nervos Network? How can we collaborate or help share tokens for the development of the project?

A: The community is the MOST IMPORTANT thing for Nervos. We are an open source, non-profit Foundation and everything we do and build is to empower the community and give them the awesome technology of Nervos!

We would love for all of you to join our community as well. You can also sign up to our mailing list here:

and follow our social channels here:




Q: Why use CKB as a reserve? Wouldn’t it be more practical to use stablecoin?

A: This is a great question. It is essential that the native token of Nervos can fluctuate and change in price to adjust for demand on the Network.

This is one of the key design principles that makes Nervos sustainable and economically sound. CKB allows the user data storage on the blockchain, and as that demand for data storage increases, so too does the demand for CKB, making it more competitive to store data on the layer 1.

With this mechanism, we envisage data that requires high security to be stored on layer 1, and data that is less needing of security to utilize layer 2. In this way we solve many of the issues facing other blockchain in terms of “state bloat” and issues of centralization around running full nodes.

Giveaway Section:

KuCoin and Nervos (CKB) have prepared a total of 245,000 CKB giveaway to AMA participants:

1. Comment your questions for the AMA Twitter activity: 12,500 CKB

2. Red envelope giveaways during or after the AMA session: 220,500 CKB

3. Free-ask section: 12,000 CKB

If you haven’t got a KuCoin account yet, you can sign up here!

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KuCoin AMA Series — Nervos (CKB) — Full Transcript was originally published in kucoinexchange on Medium, where people are continuing the conversation by highlighting and responding to this story.

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