Partnership Deep Dive - Nervos

Partnership Deep Dive - Nervos

Francesco Ponziani

Francesco Ponziani

MELD Ambassador

July 21, 2022

MELD has seen explosive engagement over the last year with its ISPO launch through to its vision of banking the 2 billion individuals currently unbanked and the plethora of services it aims to offer them. Navigating such a technically complex and political landscape however brings about its challenges. To help with this, MELD has been cultivating strategic partners in order to facilitate their vision and unify the ecosystem.

Here I break down some of these incredibly exciting partnerships.

Nervos Network

Nervos Network is a proof of work (POW) blockchain protocol founded in 2018 and was named after the nervous system in the body due to the flexible layered structure it shares similarities to. Nervos encompasses a collection of protocols in an attempt to solve the biggest challenges facing blockchains today: Security, Scalability, and Interoperability. 

Triumphing in these three foundational pillars seems to be the holy grail for blockchain innovation and for this reason IOHK and Nervos entered a long-term partnership back in Dec 2020, coordinating and collaborating on research around UTXO ledgers and smart contracts in order to improve upon their shared vision of blockchain aspirations.

In Oct 2021, Nervos launched its Force Bridge on mainnet, a bridge allowing for cross-chain transactions between Nervos and Ethereum with embedded support for whitelisted ERC-20 tokens. The bridge allows for interoperability between the two networks so that developers and token holders can utilize and benefit from what each network offers. Ethereum developers are able to be part of the next generation of blockchain evolution by easily porting dApps onto the Nervos network offering them a cheap and fast network environment. With the bridge acting as an integral part of creating universal applications, it plans to roll out further compatibility with other networks. 

As the Nervos and IOHK partnership flourished, Nervos and Cardano announced in June 2021 that they were working on a cross-chain bridge between the two networks, potentially opening a portal that will allow billions of dollars to flow between ecosystems, helping propel their shared ambition of blockchain interoperability.  

The Nervos Team

Nervos network was developed by a rockstar team of leading blockchain professionals with their headquarters in Hangzhou, Zhejiang, China.

Jan Xie: Lead Architect and Researcher

Jan Xie’s work on Ethereum has made him a well-renowned blockchain entrepreneur having co-founded ethfans.org, an Ethereum fan token ecosystem where tokens built on BEP20 invest into Ethereum without paying the high gas fees associated with the network directly. Jan was an architect for Peatio, an open-source accounting software programme for a crypto and digital asset exchange platform, and also founded a blockchain infrastructure company called Cryptape, the largest and most recognized blockchain engineering contract platform in China, created for research and development of blockchain technology.

Terry Tai: Co-Founder - Blockchain Developer

Terry's blockchain path started in 2014 when he became a core developer at Peatio. Having also co-founded Teahour.fm, one of China’s most popular tech podcasts, Terry also worked for Cryptape as Chief Product Officer in 2017 where he then co-founded Nervos.

Kevin Wang: Co-Founder - Researcher, Token Economics

Kevin’s background includes working on data solutions for IBM Silicon Valley Lab and also co-founding Launch School, an online school for software engineers.

Daniel Lv: Co-Founder - Community Building

Daniel, former CTO of Yunbi, a China-based cryptocurrency exchange was also CTO and co-founder of imToken, Ethereum’s most popular wallet.

As an expert in the programming language Ruby, Daniel co-founded ruby-China.org and supported the Chinese Ruby community for over 10 years.

As the host of the podcast Teahour.fm. The Nervos team first met and shared their ambitions of where and how they wanted to develop blockchain technology. 

Cardano - Nervos similarities

Cardano and Nervos share some similarities in how they are architectured:

Cardano Layers 

Cardano Settlement Layer (CSL)

The CSL acts as the account ledger and uses a proof-of-stake (POS) consensus algorithm to generate new blocks and confirm transactions. It manages the movement of value from sender to receiver while remaining separate from its computational data. 

Cardano Computation Layer (CCL)

The CCL gives flexibility in how the value is transferred, allowing users of the CCL to customize rules when evaluating transactions which translate to the building of unique smart contracts. 

Nervos Layers

Common Knowledge Base (CKB)

Nervos Network has the Common Knowledge Base (CKB) as its foundation layer, instead, operating as a proof-of-work consensus (POW), tasked with security for the network, acting as the consensus layer validating and regulating on and off-chain transactions, similar to Cardano. A big difference here is the unique Nervos Cell Model, a model that facilitates development on the network to be flexible, scalable, secure and accessible to businesses. Holders of its native CKByte (CKB) token are entitled to an allocation of limited state storage space on the CKB blockchain. 1 CKB token = 1 byte of storage and therefore incentivises developers to efficiently use the blockchain. As storage becomes scarce, CKB tokens can be proportionally priced and traded freely on the open market.  

Godwoken and Polyjuice

Nervos’s second layers named Godwoken and Polyjuice are designed for scaling, smart contracts, and interoperability, again with comparable outcomes to how CCL works. Godwoken is Ethereum Virtual Machine (EVM) compatible built on Nervos’ Layer 1. Godwoken was the first Optimistic Rollup account model built on eUTXO. It inherently adopts multi-chain functionality, utilizing advanced account retrieval features allowing for a flexible internet-like experience. Polyjuice is a framework layer working inside of the optimistic rollup (Godwoken), allowing it to be EVM compatible and provides the Godwoken layer custom logic. Polyjuice can be modified to function with other networks such as Cardano.   

Nervos Network Milestones

May 2019 - Nervos Testnet launch

This testnet represents a significant accomplishment for everyone working on Nervos Network and its supporters. It is a key step forward on the path toward Nervos Network’s ultimate goal of enabling a truly decentralized economy.

November 2019 - Nervos Mainnet Launch

The birth of the Nervos mainnet comes after months of activity, including changes and improvements on our testnet, and a series of mining competitions intended to help identify potential vulnerabilities.

March 2020 - Nervos Foundation Joins Cross-Chain Group

A group building a coalition of projects with the shared goal of promoting the design and implementation of cross-chain technology.

July 2020 - China’s Blockchain Services Network (BSN) Integration 

BSN will make the Nervos blockchain available to millions of potential users and developers through the International Portal.

July 2020 - Nervos joins Coinbase’s Rosetta

Rosetta is an open-source toolkit from Coinbase designed to simplify blockchain integration and make it more effective.

August 2020 - Integrating Chainlink’s Widely Used Oracles

By leveraging Chainlink’s large collection of independent secure node operators and high-quality data resources, Nervos developers can start constructing next-generation decentralized applications (dApps) that are connected to real-world data and traditional systems without compromising security and reliability.

Dec 2020 - Nervos and IOHK Join Forces

Nervos has entered into a long-term partnership with global blockchain engineering company IOHK aiming to reduce the security risks that smart contracts present to the growing DeFi space

Feb 2021 - Major Milestone with First U.S. Crypto Listing via Voyager

The listing of CKB on Voyager marks the first time users in the United States had direct access to the token.

June 2021 - Nervos Force Bridge collaboration with Cardano

The bridge will allow users to use Nervos and Cardano’s native currencies interchangeably and create their own tokens.

Oct 2021 - Nervos launches Force Bridge on Mainnet

The Ethereum Force Bridge connects the Ethereum ecosystem to the Nervos ecosystem for increased interoperability and token liquidity.

Nov 2021 - Godwoken Launch - EVM-compatible Layer 2 Blockchain

In a major step along Nervos’s interoperability roadmap, Godwoken is an EVM-compatible Layer 2 blockchain, and will help propel Nervos to be a future-proof blockchain platform of choice for developers.

Dec 2021 - Nervos Partners with MELD 

Cardano DeFi banking protocol MELD has announced that it will utilize the Force Bridge to increase liquidity.

Jan 2022 - Nervos Expands to BSC With Force Bridge

As part of the continued expansion of the Nervos Network, it is announced that Nervos will be bridging to Binance Smart Chain (BSC) with the use of the Force Bridge.

Nervos’s ongoing roadmap illustrates all their planned development with some fantastic statistics, insights, and analysis also viewable at Crunchbase.com.

Nervos x MELD Partnership 

In the recently announced partnership between MELD and Nervos, MELD plans to utilize Nervos’s Force Bridge to leverage the liquidity that the Nervos, Ethereum, and Binance networks can bring to MELD. MELD plans to launch a suite of pioneering DeFi solutions to its users such as negative interest loans, under collateralized loans and genius loans, where the interest earned through the locked collateral covers the principal. In order for MELD to deploy these unique lending solutions, deep liquidity is required and the collaboration with Nervos is a giant leap in attaining this. 

With Akamon, MELD’s bridging solution to multiple blockchains, also on the horizon, the Nervos x MELD collaboration extends the vital reach necessary for the networks’ shared vision of blockchain ambitions to reach every realm and corner of the globe and for interoperability to flourish truly. 

Low liquidity within an ecosystem results in a more volatile environment where small transactions may cause drastic spikes and influence the price greatly. Higher liquidity provision makes tradable assets easier, quicker and cheaper to convert into other assets via decentralized smart contracts. 

The Nervos x MELD partnership will ensure deeper pools of liquidity are provided for each ecosystem in the form of wrapped assets (native assets of one blockchain transferring value to another blockchain), from which each network’s participants will benefit. Participants can use their wrapped assets to join liquidity pools, provide collateral for borrowing or lend out their assets. This cross-chain liquidity provision generally results in higher interest rates for lenders/stakers and lower fees, which ensures a healthy financial environment. In short, money will be brought into each ecosystem from outside which will help businesses flourish. At the time of writing, approximately 1.3% (280,000) Bitcoin equating to about $6.2 billion is wrapped in the form of WBTC and brought to Ethereum’s network. This clearly highlights the demand and value that can be introduced into another ecosystem through wrapped asset technology.   

It is clear that Nervos is a pioneering third generation blockchain geared up to tackle and solve the problems that have plagued blockchain technology in the past. With Nervos and Cardano at the frontline of blockchain innovation, this collaborative and formidable force is knocking at the locked doors of legacy financial institutions, and whether the doors are voluntarily opened or not, the tsunami of blockchain innovation will eventually sweep over the world resulting in a global financial transformation.

Disclaimer

The opinions shared within this article are those solely of the MELD Ambassador. Note that the content within should not be considered financial, legal, or tax advice. Neither the author nor MELD Labs PTE Ltd. are financial, legal or tax advisors. None of this content should be used to make any form of financial, tax, or legal decisions. Do your own research and consult professionals as needed for official policies, restrictions, and requirements in your jurisdiction.

If you believe in the MELD vision, want to support this initiative, and want to help promote the future of finance then we want you to join the MELD Ambassador Program!

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