What is the mining yield of the top-level project Nervos? Is it worth buying in the secondary market?

Genesis tokens: 33.6 billion, 25% were destroyed when the mainnet was launched.

Basic issuance: The total amount is 33.6 billion, which will be halved every 4 years until all are mined.

Secondary issuance: 1.344 billion/year. The annual issuance volume is constant, but the distribution method is determined by the CKB status.

The specific allocation method is as follows:

If I want to buy a mining machine and join the mining army now, then my income structure should be like this:

Miner income = mining income (basic issuance) + secondary issuance + handling fee

Let’s take it apart one by one:

1. Mining income

① Daily output of CKB

The main network has just been launched, so the halving issue is not considered. The mining volume in the first four years was 16.8 billion, the annual output was 4.2 billion, and the average daily output was 11,506,849.3 coins.

② Estimation of the number of tokens produced by mining machines per day

Mining machine daily output = mining machine computing power / total computing power * daily output limit (115066849.3)

There is a problem here. Since Nervos' mainnet has just been launched, although major mining pools have already supported Nervos mining business, compared with other popular currencies, Nervos' computing power is not high, but there is still a problem of computing power growth.

This is a simplification, the real model should be

Mining machine daily output = mining machine computing power / (starting computing power * (1 + N * S)) * daily output limit (115066849.3)

N is the number of mining days

S is the computing power growth rate

③Daily income estimation

Daily income = daily output of mining machine * coin price - electricity cost

In fact, this calculation is not rigorous, because in addition to the daily electricity costs of the mining machine, there are other additional costs such as manual management and site rental. However, considering that this part of the cost is not high when amortized, in order to simplify the model, it is ignored here (I really don’t understand it)

④Cost recovery cycle

Theoretical cost recovery time = mining machine cost / mining machine daily income

Nervos uses graphics cards for mining, which is the same as many current tokens. ETH, Grin, etc. all use graphics cards for mining.

In order to check the price of mining machines, I searched many mining pools and found mining machine information in F2Pool and BTC mining pool, but unfortunately, if I use this model directly, I can't find the corresponding product. To be more precise, these are graphics card models.

But it doesn’t matter. I will use these graphics card models to calculate the benefits.

The card with the highest return is the GTX 1080Ti 8 card.

I continued to look for mining machines and found 3 more mining machines on the mining website. This time it seemed like there were really a lot of them.

Calculate again, how are the mining conditions of these 3 mining machines?

The mining efficiency far exceeds the previous data, the proportion of electricity costs has been reduced to single digits, and the payback period is about half a year.

Of course, this calculation model is not very rigorous and there are several uncertain factors.

①Computing power increase speed

The total computing power I recorded last night was 174670GH/S, and when I checked in the morning, it had dropped to 172103GH/S. Due to the limited observation time, it is difficult to estimate the actual computing power fluctuation, but this will indeed affect the output.

②Coin price

The current coin price is 0.0567, which is at a very low level. According to Ikkiu's calculations, it is actually no different from the private placement price. There is no situation where buying in the secondary market means taking over.

2. Secondary issuance

Secondary issuance: 1.344 billion/year. The annual issuance volume is constant, but the distribution method is determined by the CKB status.

There are actually two types of distribution here. The first is NervosDAO, and the second is the token leasing income;

I searched a lot of information, but couldn't find accurate data. I had to ask the forum owner, Ikkiu, and he gave me a number: 4%

Considering the huge number of Genesis tokens, if these tokens are also locked, NervosDAO's yield of 4% is understandable.

In order to ensure that there are enough CKB for users to store, there are requirements for the amount of locked positions; mining alone is not enough, which is different from the simple currency price model of BTC. This part of the locked position lowers the overall income. After all, 1.344 billion is still average compared to 33.6 billion. However, this is also the highest inflation rate in history, and it will decrease year by year. (We are originally trying to fight against the inflation of fiat currency, so NervosDAO should not pursue too high an inflation rate)

I haven’t found any information on rental income yet, so it’s hard for me to estimate the rate of return. Given that the ecosystem is not very rich, let’s ignore the rental demand for now.

3. Handling Fees

There is not much to say about this project at present, because the network is used very little in the early stage and the transaction fee is almost negligible.

But if Nervos really gets going, when the basic issued tokens have been almost mined, transaction fees and secondary issuance will become the main source of income.

in conclusion

Since the price of the coin is at a very low level (compared with the private and public offering prices), the mining efficiency is still very good. It is feasible for miners to sell the tokens or hold the coins to gain the benefits of rising coin prices. From the perspective of risk control, most of them may still flow into the market for trading, holding a small number of tokens. After all, if the price goes up, the potential benefits may be huge, so it is still okay to take a small position to gamble.

If you use a mining machine from the mining website and the electricity price is 0.3, then the cost can be recovered in about 200 days. Other mining machines can calculate the payback period by themselves according to the above method.

Of course, I won’t do mining, but I will still buy a portion of it, and stand on the same starting line as the first two rounds of investors. There are not many such conscientious projects. Now everyone is looking for a listing or someone to take over. Institutional private equity makes a lot of money, while the leeks have nothing. So based on this point, Nervos is very conscientious.

If there are any errors in the calculation, please correct me. After all, I am still exploring Nervos.