Nervos, which was launched three days later, has soared 170% on the exchange

Text | Huang Xuejiao

Editor | Lu Xiaoming

Nervos, one of the most watched public chains this year, will launch its mainnet "Lina" on November 16 (this Saturday), when its token CKB will be issued at the same time, sparking market expectations.

Some exchanges that pursue traffic, such as GJ, have already listed their token CKB (futures) in August. As the release date approaches, the price of CKB on GJ has also experienced a roller coaster market, with a surge of 170% and then a plunge of 1/4.

According to GJ data, CKB’s daily trading volume on the platform has reached 92 million, with the highest daily trading volume exceeding US$100 million (November 12), accounting for 6.42% of the entire exchange’s daily trading volume, second only to BTC and ETH.

It seems that CKB futures trading has become an important source of income for GJ. I am afraid that this carnival will not last long. According to people familiar with the matter, Huobi, an investor of Nervos, will launch CKB within this month.

Three days later, Nervos will be launched, and more than 12.3 billion CKB will gradually flow into the market. Will the price be as good as expected by then?

Before the mainnet launch, exchanges will play CKB futures on their own

According to public introductions, GJ, the exchange where CKB futures prices skyrocketed, was invested by Bisheng Capital, Gravity Zone Capital, Qianfang Fund, and Deepchain Finance, and was launched in August 2018. It has been launching CKB futures since August 27 this year.

Some Nervos community members expressed concerns about the sharp fluctuations in CKB on exchanges.

“It’s too fake. It’s a stand-alone exchange, they can draw K-lines however they want… 90 million in volume, multiplied by the highest price of 0.36 USDT, the maximum transaction volume is 32 million US dollars. I don’t know if they calculated it before drawing the K-line.”

“These exchanges may be deliberately raising expectations. It would be more reassuring if they see a gradual increase.”

"GJ often does this, just to attract traffic. You think you can make a profit by moving coins, but if you withdraw more than 200 coins, they will not be credited to your account in a day."

“It’s just that there are risks.”

In addition to GJ, there are 3 other exchanges that have listed CKB. Some Nervos community members believe that the prices of these three exchanges are "fair".

Regarding the price difference between exchanges, LBank co-founder He Wei said that in my personal opinion, it may be because the users of the exchanges are different, and the users of exchanges with high coin prices do not have information channels to understand the price of CKB on LBank, so when the target is the same, they will choose the more "expensive" one.

Yang Haipo, founder of CoinEx exchange, said, "Currently, all exchanges are stand-alone, prices are almost unconnected, and there are few circulating stocks, so prices are relatively fictitious."

According to Yang Haipo, there are two modes for exchanges to sell futures. One is that the exchange itself or a cooperative institution participates in a private placement and sells it to the exchange's customers. CoinEx belongs to this type. The other is that the user pays a deposit, but ultimately the spot delivery is not made, but the settlement is in cash.

Although many exchanges are eager to launch their tokens, some Nervos community members expressed their hope to be listed on a large exchange like Huobi first. According to public information, Huobi is an investor and partner of Nervos, and the two have jointly developed Huobi's financial public chain.

“If it is to be listed on Huobi, will it have to be the end of the year? Huobi is slow in listing coins…” In this regard, an insider revealed to Odaily Planet Daily that it will be faster and is expected to be listed on Huobi in November.

Some community members also do not object to small exchanges listing CKB on their own. "For completely open source projects, many exchanges list their own coins. According to what I have learned, if a small exchange can really list CKB without the team providing technical support, it means that the technology of this small exchange is still good. In any case, it is a brand new chain."

Highly anticipated, so popular that proxy investing is everywhere

Nervos was launched in 2017 and is positioned as a basic public chain. Nervos Network is divided into two layers. The bottom layer is Nervos CKB (Common Knowledge Base), which focuses on "security" and "decentralization". The upper layer is various Layer 2 facilities, pursuing high scalability.

Bloomberg calls Nervos and two popular cross-chain projects, Cosmos and Polkadot, the most anticipated public chains in 2019, and the team's strong technical strength is a major reason for this.

Jan Xie, chief architect of Nervos, worked in the Ethereum core team (Research Team) for two years, mainly working on the first version of the Ethereum 2.0 Casper protocol.

In July this year, Nervos also served as Huobi's technical partner, and simultaneously carried out research and development of Huobi's financial public chain before the mainnet was launched.

The popularity of Nervos in the market can also be seen from the fundraising.

In 2018, Nervos received an investment of US$28 million from more than a dozen well-known domestic and foreign institutions, including Sequoia China, Polychain Capital, CMB International, Matrix Partners China, Wanxiang Blockchain, etc.

In May 2019, Nervos released its testnet, which was supported by F2Pool, ViaBTC, Huobi Pool, Spark Pool, and UUPool. In addition, before the Nervos mainnet was launched, wallets such as imToken, Cobo, Bitpie, Hoofu, and RenrenBit announced their support for sending and receiving CKB.

In October this year, Nervos was publicly raised on the compliant crowdfunding platform Coinlist, with a price of $0.01 per coin. Before the sale, many wallets and exchanges launched CKB proxy investment services. As soon as CKB was launched, the subscription volume reached $53.8 million.

On November 7, CKB completed its token sale ahead of schedule and in excess of the target, ultimately raising $72 million, nearly $5 million higher than the expected target.

The tokens purchased by investors in the two rounds will be unlocked in the genesis block when the mainnet is launched.

Nervos operators recommend that using the official wallet now requires running a node, which is suitable for hardcore players but not suitable for ordinary users; ordinary users are advised to download common wallets on the market, such as the wallets mentioned above.

Users can use these wallets to create Nervos mainnet addresses and perform operations such as sending and receiving CKB, as well as importing the private key of the testnet to withdraw CKB. Currently, the Bitpie wallet has been connected to the mainnet, and other wallets are still in the process of connection.

Can Nervos support the price after going online?

CKB represents the storage space of the network, 1CKB = 1CKByte. Holding CKB gives you the right to write data in the underlying layer. Unlike Ethereum's "one-time payment, permanent occupation", Nervos' resources need to be mortgaged CKB to obtain. When the resources are not needed, you can redeem the token or rent it out to others, which is somewhat similar to EOS.

There is no total upper limit for CKB. The genesis block will generate 33.6 billion CKB, of which 8.4 billion will be destroyed immediately (actually sent to Satoshi Nakamoto's account address), and the rest will be distributed to relevant participants, and the unlocking method is slightly different (see the figure below). In short, the initial circulation of CKB is expected to be 12.3 billion CKB when the mainnet is launched.

After that, CKB will be issued through basic issuance (33.6 billion in total) and secondary issuance (1.344 billion per year). The basic issuance rules are similar to Bitcoin, and the block reward is halved approximately every four years. The CKB issued through secondary issuance will be distributed to miners and the native decentralized autonomous organization NervosDAO in proportion.

In other words, the long-term value of CKB depends on the usage rate of the main network. However, most public chains are still in the stage of exploring scenarios. Nervos is so popular, can its coin price support such expectations after it goes online? Some bystanders are worried.

“Many companies that have done well in chain operations have not been able to make their coin prices rise. For example, Algo…” said a cryptocurrency investor.

“The private equity and public equity, plus the team’s, are too big. There is a risk of a market crash after the listing is unlocked. Now there are so few leeks, who can take it over?” A trader who has been paying close attention to Nervos told Odaily Planet Daily.

Although CoinEx has listed CKB ahead of schedule, Yang Haipo still expressed caution. "After the mainnet is launched, the circulating market is still relatively large. Under the current market conditions, we still need to pay attention to risks."

Internet Pulse also points out other potential risks, such as whether the wallet agents who previously obtained quotas from CoinList will eventually fulfill their promise to return the coins; team risk, when great people gather together, they can give investors high expectations, but once they break up, those expectations will be destroyed.

Therefore, some people suggest that retail investors should wait and see when the coin is first launched. "You will not miss out on a good project just because you are late to participate. It is a more stable choice to accompany the project to grow. You can wait for the secondary market price to stabilize and then look for the right time to buy."

It is conceivable that what the price of CKB will be after it goes online and whether investors buy or sell will be a big game.