In the throes of a broad price recalibration that’s shaking up the top 100 cryptocurrencies, one digital asset has bravely bucked the trend. Nervos Network, along with its inherent currency CKB, hasn’t merely marked up noteworthy gains; it has vaulted to 79th place in the market. Market observers are buzzing about the factors steering this impressive rise.
Nervos Network operates on a proof-of-work (PoW) Layer 1 (L1) blockchain, a system devised to enhance application-specific Layer 2 chains. The system is aimed towards shaping its native currency, CKB, as a more sustainable store of value (SoV) than Bitcoin (BTC) and a more solid smart contract platform than Ethereum (ETH).
BTC, with its finite supply and diminishing block rewards, sparks worry about enduring economic incentives for miners. Here, Nervos Network leaps into the fray by bringing out a fixed yearly supplementary issuance of CKBs alongside the base supply, thus assuring long-term incentives for miners.
The network also takes on possible security threats linked with Ethereum. In the Ethereum ecosystem, there’s no direct correlation between the value of its inherent currency (ETH) and the valuations of apps built on it. Nervos Network’s strategy to avert this risk involves leveraging CKB for transaction fees and storage, instigating a robust economic bond between the network’s native asset and its entire landscape.
Guided by a persistent secondary issuance model, Nervos bolsters CKB’s SoV credentials. This model prompts users to perpetually lock up CKB correlating to their applications’ size. Additionally, locked CKBs are subject to “state rent” via inflation, which facilitates state rent payments and guarantees a viable economic model.
Nervos Network also ushers in a secondary market for chain space, facilitating apps to unlock and vend CKBs without requiring pertinent storage. Investors can counterbalance inflation by acquiring CKBs and depositing them into NervosDAO, an apparatus that receives a slice of the secondary issuance to offset looming inflation. Interestingly, this drips of “treasury bonds” and hints at potential investment avenues.
Having delved into the network’s mechanisms, it’s clear that CKB is riding a wave of value appreciation, breaking free from a prolonged consolidation cycle of close to two years. Following a steadfast trading session at a price range of $0.0024 to $0.0035, the currency has since swerved from this niche since January 30, witnessing noteworthy gains in the interim.
Currently pegged at $0.032, CKB is within grasping distance of its highest ever value of $0.043, attained in March 2021. The digital asset has posted eye-catching price surges of 47%, 69%, 75%, and 14% over the past fortnight, week, and day, respectively. Data from CoinGecko indicates an upswing in CKB’s trading volume, settling at $207 million in the past day alone, showing an uptick of 9.7% from the previous day.
Furthermore, the market capitalization of CKB has ballooned impressively, practically doubling from $740 million on April 2 to about $1.35 billion in just over a week. This price leap is attributed to the announcement that Bitcoin’s network will soon host Nervos Network’s CKB token. The token’s impending rollout of smart contract functionality along with its interoperability and modularity features, slated for 2024, has sparked investor enthusiasm.
As Bitcoin inches towards its Halving event, an occurrence historically known to escalate its value, Nervos Network stands to gain from its profound ties with the behemoth cryptocurrency. With the uptrend showing no signs of losing steam, coupled with anticipated increments in BTC’s price, CKB might be on the verge of jotting new record highs.
This review of the daily chart reveals CKB’s price favoring an upward trajectory.
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