Nervos DAO is misunderstood by 90% of people

When it comes to Nervos, the first thing that comes to mind is the clever layered design, the solution of state explosion problem, and the powerful engineering ability. In fact, in addition to these shining points, Nervos DAO is also unique.

However, BlockBeats found that many investors were not aware that Nervos DAO was actually a smart contract offering ckb-standard returns, but understood it as an autonomous management organisation such as AragonDAO.

How exactly do you understand Nervos DAO?

The Nervos DAO is a little different from the DAO we usually talk about. Instead of a decentralized autonomous organization, the Nervos DAO is a smart contract related to the CKB proven economic model. To understand Nervos DAO, we must first clarify the distribution scheme of CKB certification.

In addition to the CKB in the creation block, the subsequent release of CKB includes the basic release and the secondary release. In the basic issue, a total of 33.6 billion pieces of fixed CKB certificates are produced by mining in a manner similar to the rule of BTC halving every four years. In the first four years, 16.8 billion CKBS will be mined, in the second four years, 8.4 billion CKBS will be mined, and so on.

In addition to mining earnings, Nervos added a constant secondary issue of $1.344 billion CKBS per year. According to CKB's economic model, the rewards will be distributed among the miners, the Treasury fund and Nervos DAO.

However, investors can enjoy the corresponding subsidies by depositing CKB certificates in Nervos DAO.

The Nervos DAO is a time deposit with a minimum deposit period of 180 epoches (about 30 days). If the user continuously locks in the CKB pass-through for multiple periods, Nervos DAO's earnings will be accrued on a rolling basis of compound interest.

It should be noted that a complete Withdrawal cycle requires three transactions: a Deposit Transaction, an Initial Withdrawal Transaction, and a Final Withdrawal Transaction.

The storage transaction is the first step that CKB investors need to do. They need to lock in the CKB pass that they want to deposit in the Nervos DAO. Once the storage transaction is packaged into a block, investors can start enjoying Nervos DAO's interest rewards from that block.

The investor can then send a transaction to the Nervos DAO at any time to issue a withdrawal request. After the initial withdrawal transaction is issued, the Nervos DAO will return the user's CKB pass and rewards based on the duration of the deposit.

That may still be a little obscure. Nervos's official medium gives an easy to understand example.

User A deposited the CKB pass into Nervos DAO at Epoch 100 and wanted to extract it from Epoch 281. Then, if user A filed A withdrawal application before Epoch 280 (the initial withdrawal transaction), he could receive his CKB pass and reward at any time after Epoch 280. In contrast, if user A does not file A withdrawal application at the first deposit date (i.e., does not send the initial withdrawal transaction before Epoch 280), then he must wait until the next deposit date (i.e., 100+180+180=Epoch 460) to complete the withdrawal of CKB principal and interest.

In summary, users who want to withdraw the principal and interest income from the Nervos DAO as soon as possible need to file withdrawal applications before the end of the storage period (180 Epoch).

How much subsidy do you get for depositing your Nervos DAO?

Quite simply, the subsidy that investors receive by depositing the Nervos DAO is equivalent to the number of CKBS issued in the secondary level per year/the total amount of CKBS. Since the CKB general certificate issued at the secondary level every year is a constant (1.344 billion yuan), the return rate of the first year is about 4%. Later, as the total amount of CKB general certificate is expanded, the annual return rate of the currency standard gradually decreases.

According to BlockBeats, the emergence of Nervos DAO enables all stakeholders in Nervos ecology to enjoy their rights and interests.

For miners, mining rewards are not limited to limited block rewards. Secondary issuance provides long-term incentives to avoid the defect of insufficient block rewards in the traditional PoW block chain. They can also choose to deposit the excavated CKB into the Nervos DAO lock warehouse to pursue the maximization of benefits.

For long-term investors and eco-constructors, they can get the same currency standard incentive as staking in PoS by depositing CKB certificates that do not need to be traded into Nervos DAO, and solve the problem of status explosion through the storage and charging mechanism.

For traders, they did not have the need to hold the general certificate for a long time, but the emergence of Nervos DAO reduced the circulation of the general certificate in the market, and the withdrawal of rewards was also limited by the maturity, which made it easier for professional traders to grasp the market.

What are the advantages of Nervos DAO?

DAO has never been a new topic in the cryptographic world, but it seems to be one that won't go down well at home. "Few people pay attention to DAO unless it makes people money." Currency circle senior investor small J told block pulse BlockBeats. The popularity of management DAO has been very limited, and the DAO attention of UBI classes such as HumanityDAO has also been greatly reduced.

Nervos DAO has changed the problem of low public participation in governance in traditional DAO, because it directly involves the interests of investors and can be regarded as a smart contract to lock up CKB and get subsidies. According to the display of Nervos block browser, the number of currently locked CKB certificates in Nervos DAO is up to 950 million pieces, nearly 8 million dollars. According to the total number of 12.54 billion pieces in circulation at the time of writing, Nervos DAO has locked more than 7.5% of the circulating CKB.

If the Nervos DAO is regarded as a DeFi on the chain, the amount of funds locked has even surpassed Uniswap, ranking fourth among all DeFi, only after MakerDAO,Synthetix& have spent And the Compound.

At the same time, Nervos DAO also brought changes to the valuation model of CKB. We often say that bitcoin is the hard currency of cryptocurrencies, a store of value in digital form, but it is clear that the pervasive model of outright deflation in bitcoin makes it impossible to ever act as a medium of exchange on a large scale.

At present, there is no limit on the total amount of ethereum, and Gas is required for transfer and DApp on ethereum, and ETH is also used as currency anchor for the exchange of certificates on ethereum. At this time, ETH has good transaction media, but it is difficult for ETH to be used as a means of value storage.

The combination of basic issue, secondary issue and Nervos DAO enables CKB general certificate to take into account the roles of SoV (value store) and MoE (medium of exchange) -- Nervos DAO gives CKB general certificate a strong SoV attribute, while the CKB general certificate circulating in the storage and charging mechanism and the second-tier application has both MoE attribute.

PoW 3.0, explore the best of Nervos DAO

BlockBeats observed that, in fact, many large cryptocurrency projects, especially the PoW block chain at the top, would have their own DAO, or the idea of compound PoS in the project, such as Dash, Decred, horizonen, etc., why?

We know that while bitcoin's china-japan consensus is ingenious, it is the miners, investors and eco-builders in the economy that are more torn apart. In the first generation of PoW block chain led by BTC, the miners of "Power Talks" have the absolute right to speak on technology development and sub-chain governance.

"If you're not satisfied, I'll split!" If you only have a lot of bitcoins, you are at best a community KOL, which cannot directly affect the development of the network. At the same time, the traditional PoW block chain has limited incentives for core developers and eco-builders.

In the second generation of PoW block chain led by DASH, DCR and ZEC, people gradually realized this problem and began to introduce mechanisms similar to PoS. In the Dash, for example, the Dash by introducing masternode master and DAO autonomous organization to guide the currency miners, investors, ecological builders "trinity", that is to say the Dash miners if just dig, so they would produce only 45% of its revenue, network development wants to earn all the profits, also need a mortgage of 1000 Dash card into a master node, and actively for the network.

If the SPoS mechanism adopted by DASH was the first project to bring the concept of master node into the block chain, then the mixed consensus of DCR pushed the balance of rights and interests and the governance on the chain to a new height. PoW issued block PoS verification and ticket management ticket also gave ordinary investors a voice. Both from the perspective of the general evidence economy model and the overall development of the block chain, the interests of all parties of these second-generation PoW block chains are more balanced, the network is more secure, and the valuation methods of the general evidence are more diversified.

Although Zcash does not have a mechanism similar to staking, its "mining tax" has attracted many people's ridicule in terms of the general economic model, which is also its promotion to the industry. Zcash makes the concept of "mining tax" popular in the block chain of PoW, and solves the problem that developers do not raise funds, do not pre-dig, or lack of power in the later stage.

In a way, Nervos pushed the PoW blockchain into the 3.0 era.

Nervos, on the premise of ensuring the scarcity and equity of CKB certification, has solved two difficult problems in the first two generations of PoW through the innovation of technology and issuance mechanism of certification -- insufficient incentive for miners caused by the sharp reduction of block rewards in late network period and the problem of block chain state explosion. This is something that the PoW blockchain never came up with a solution for before.

Of this, someone called Nervos DAO is staking of PoS, this is wrong, because Nervos DAO does not participate in the process of Nervos consensus, but it is in terms of economic incentives, ecological drive is similar to the role of staking, it give option to the user - you can trade, also can be stored, and, of course, also can deposit in lock currency subsidy, return the right checks and balances the interests of the parties is Nervos network at the same time, this design is very clever.

So what might be missing from the Nervos design?

Nervos and Nervos DAO have been fully considered in the economic model. The only thing that may be missing is the chain governance of block chain. The positioning white paper of Nervos Network mentioned that the governance scheme will be iterated in the future, and Nervos Foundation will be the governance body in the early stage. However, Nervos DAO does not have the functions of voting and governance, nor will it have any in the future, nor will it naturally enjoy the dividends brought by it, such as platform handling fee buyback and destruction in MakerDAO, and the proposal reward of the second-generation PoW block chain DAO.

However, whether governance on the chain is necessary for Nervos, or for all blockchains, is a subject of debate.

A few days ago, Bram Cohen, inventor of the BitTorrent protocol and founder of Chia Network, commented on V god's post "have all the 16 blockchain problems solved five years ago?" on twitter. ", he said, "the fundamental consensus of bitcoin is to avoid human governance. To talk about governance on the chain is to repeat mistakes, not to return to the original."

What will the future of Nervos and Nervos DAO look like? What will block chain's economic design and governance evolve into?

Let's give the answer to time.

Silver block rhythm BlockBeats reminded, according to the circ and other five departments issued in August 2018 on the guard against in the name of the "virtual currency" "block chain" illegal fund-raising risk warning "file, please the public rationality block chain, don't blindly believe in reduction commitment, set up correct concept of money and investment philosophy, effectively raise the risk consciousness; To the illegal crime clue that discovers, can report to concerned branch actively reflect. & have spent

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