This article is reproduced from ChainFeeds, author Linda Bell, original link:
https://substack.chainfeeds.xyz/p/ckb-layer2
With the launch of ETF, the explosion of BRC-20 ecology and the support of halving narrative, the market’s attention seems to be focused on the Bitcoin ecology again. In this context, CKB, as a veteran project in the public chain ecosystem, has also made frequent moves recently, announcing that after adjusting its main network positioning to Bitcoin Layer 2, it launched a layer of asset protocol RGB++. Leveraging the development momentum of Bitcoin Layer 2, coupled with its own UTXO + PoW orthodox "BUFF", CKB quickly became a hot topic in the community.
However, before we delve into the concept of RGB++, why the CKB team chose the RGB protocol, and how they plan the development of Bitcoin Layer 2, it is necessary for us to go back in time and learn more about the history, background, and original intentions of CKB.
road to birth
In early 2018, when market attention was focused on the Ethereum ecosystem, CKB was officially launched. In July of the same year, CKB completed US$28 million in financing, with participation from many well-known investment institutions such as Polychain Capital, Sequoia China, Wanxiang Blockchain, and Blockchain Capital. Subsequently, on October 24, 2019, CKB completed an excess fundraising of US$67.2 million on Coinlist. On November 16, 2019, the CKB mainnet "Lina" was launched.
The team background of CKB can be called a star team, and the founders have been deeply involved in the encryption industry for many years. Olaf, the founder of Polychain Capital, also said in an interview that he is very optimistic about the background of the CKB team.
Chief Architect Jan Xie: He has long contributed to the development of Ethereum clients Ruby-ethereum and pyethereum, and has also worked with Ethereum founder Vitalik Buterin to develop Casper consensus and sharding technology. In addition, he also founded Cryptape, a company engaged in underlying blockchain platform development and consensus algorithm research.
Lianchuang Kevin Wang: worked on enterprise data solutions at IBM Silicon Valley Lab and co-founded Launch School, an online school for software engineers. In addition, Kevin Wang is the co-creator of Khalani, an intent-driven centralized solver infrastructure. (Khalani is a versatile “collective solver” that can be seamlessly integrated into a variety of intent-centric applications and ecosystems.)
Lianchuang and COO Daniel Lv: Ethereum wallet imToken Lianchuang, and the former chief technology officer of crypto exchange Yunbi. In addition, Daniel Lv organized the Ruby China community for 10 years and co-founded ruby-china.org.
CEO Terry Tai: Was a core developer of the crypto exchange Yunbi and co-creator of the technology podcast Teahour.fm.
Interestingly, although the CKB founding team has close ties with the Ethereum community, they chose to inherit the Bitcoin UTXO + PoW model in their Layer1 construction architecture. This is because the team recognized the limitations of Ethereum’s infrastructure. They realized that Ethereum’s architecture limited the overhaul of the entire system, preventing fundamental reconstruction and bold innovation. Therefore, the CKB team decided to take a different path from Ethereum and build a new blockchain.
On the other hand, the reason why the CKB team chose to rebuild a public chain may be inspired by the name Nervos. The word Nervos comes from "Nerve", which also draws on Charles Darwin's theory of evolution: "Only species that adapt and flexibly adjust to changing environments can survive." It means allowing the network to self-adjust and evolve at the lowest level. . However, there is another theory about the origin of Nervos, because CKB's Lianchuang is also a lover of e-sports and animation, and the abbreviation of the "United Nations Secret Service Agency" in the animation "Neon Genesis Evangelion" happens to be "NERV".
为了加速生态进展，CKB 从 2020 年初开始专注于开发工具，陆续推出了一系列工具，包括基于 JavaScript/TypeScript 的框架 Lumos、允许在 CKB 上使用账户模型的以太坊兼容层 Polyjuice、连接以太坊和 CKB 的跨链桥 Force Bridge 及 dApp 开发套件 Tippy 等。这些工具大大降低了开发应用的门槛。基于这些工具，CKB 生态已经上线了 127 个项目，涵盖 DID、钱包及铭文等不同赛道。
Going against the mainstream: What’s new about the CKB architecture?
在社区普遍关注 TPS 和 PoS 的背景下，CKB 选择了一条与主流完全不同的技术路线。他们坚持认为在抗审查和无需许可的问题上绝不能妥协。因此选择降低 L1 性能以维持足够的去中心化，并采用改进的 PoW 和简单的哈希函数来确保网络的安全性和无需许可性。
layering concept
The reason for choosing a layered architecture is based on the team's reflection on the Internet's operating model. The Internet has built a relatively stable trust network through a layered and decoupled architecture, but its trust level is limited and lacks the inherent support of a self-protection protocol. CKB’s ideal crypto-economic network infrastructure should also adopt a layered and decoupled architecture. This means defining the network by a set of protocols rather than just one, while providing native support for self-guaranteed protocols. Therefore, the team decided to build a secure and scalable layered network, where Layer1 focuses on providing security and decentralization, and Layer2 leverages the security of Layer1 to provide unlimited scalability.
As Layer1, CKB stands for "Common Knowledge Base". "Common knowledge" is defined as knowledge that is common and widely known, that everyone or almost everyone knows and knows that everyone else knows it too. In the context of blockchain, "common knowledge" refers to a state that has been verified by global consensus and accepted by everyone in the network. This attribute is also why we can use cryptocurrency stored on the public chain as currency. Nervos CKB aims to store all types of common knowledge, not just currency. For example, it can store user-defined crypto assets, including FT, NFT, etc.
Layer2 protocols can use CKB to ensure security while providing unlimited scalability. The layered architecture proposed by CKB was later recognized by Ethereum. Ethereum gave up its previous research on execution sharding in 2019 and instead expanded its capacity with Layer2 as the core, which continues to this day.
PoW mechanism ensures decentralization
CKB firmly believes that Layer 1 is the cornerstone of the crypto economy and therefore must be a permissionless network. In contrast, PoS determines the proportion of block production based on stake weight, which leads to a conflict with the goals of decentralization and neutrality. In contrast, PoW is completely permissionless, and users only need to purchase mining machines and electricity to participate in block production. In addition, in terms of security, it is extremely difficult to forge or reconstruct a PoW chain because the computing power of each block needs to be recalculated. Vitalik also coined the concept of "weak subjectivity" to explain that the security of PoS is no less than PoW.
Therefore, the CKB team believes that although PoS is indeed better than PoW in terms of performance, if you want Layer1 to be as decentralized and secure as possible, PoW is more suitable than PoS.
Cell model achieves scalability
With the rise of the Bitcoin ecosystem, the debate between the account model and the UTXO model has once again attracted attention. In the early days, both models were interpreted around assets, but over time, UTXO still regards assets as the core (point-to-point), while the account model has evolved to serve contracts, and users’ assets are hosted in smart contracts. and interact with it. This results in the security level of assets issued on the UTXO chain being higher than that of ERC-20 assets issued on Ethereum. In addition to security, the UTXO model has better privacy, the address is changed with every transaction, and it naturally supports parallel transaction processing. The most important thing is that unlike the account model, which performs calculations and verification on the chain at the same time, the UTXO model places the calculation process off-chain and only verifies it on the chain, thus simplifying the implementation of the application, which means that there is no need to consider it on the chain. optimization problem.
CKB not only inherited the ideas of Bitcoin architecture, but also abstracted the UTXO model and created the Cell model. While retaining the consistency and simplicity of Bitcoin, CKB has the ability to support smart contracts. Specifically, Cell abstracts the nValue field in UTXO, which represents the token value, and divides it into two fields: capacity and data. Data saves the state and can store any data. At the same time, the Cell data structure also contains two fields, LockScript and TypeScript. The former mainly reflects ownership, while the latter can customize many rich functions.
In summary, the Cell model is a more general UTXO model, allowing CKB to have smart contract functions similar to Ethereum. But unlike other smart contracts, CKB adopts an economic model for common knowledge storage, rather than an economic model designed for payments in decentralized computing.
High level "abstraction"
The concept of "abstraction" is no stranger to encryption users. It refers to removing the specificity of the system and creating universality, so that the system can be applied to a wider range of scenarios. The development from Bitcoin to Ethereum is actually an abstraction process. Bitcoin lacks programmability, making it difficult to build applications. Ethereum introduces virtual machines and operating environments, providing a platform for building various types of applications. Ethereum has also continued to abstract during its development process, whether it is the "account abstraction" that Vitalik mentioned many times, or the addition of precompiled "cryptographic abstraction", etc.
Just like Ethereum is an abstraction of Bitcoin, CKB is also an abstraction of Ethereum to some extent, providing smart contract developers with more freedom.
1) Account abstraction
CKB implements account abstraction through the Cell model. For example, the Nervos ecological wallet UniPass has created an identity authentication system based on email and mobile phones. Users are able to log in via email and password, similar to traditional Internet accounts. The decentralized domain name protocol .bit developed by the decentralized identity service provider d.id team also takes advantage of the characteristics of the Nervos abstract account, allowing Internet users, Ethereum users, and EOS users to directly operate applications, not just limited to CKB user.
2) Cryptographic abstraction
At the heart of the cryptographic abstraction is an efficient virtual machine. CKB uses CKB-VM. With the characteristics of the RISC-V instruction set, CKB-VM allows developers to implement cryptographic algorithms using languages such as C and Rust. For example, the JoyID wallet built on CKB makes full use of the advantages of Nervos CKB's custom cryptography, eliminating the need for passwords and mnemonic words, and directly using biometric technologies such as fingerprints to create wallets and confirm transactions.
3) Run the abstraction
The goal of CKB is to build higher-level abstractions to improve performance and throughput. As the level of abstraction increases, the Nervos network is able to move more work off-chain or onto Layer 2. For example, although XBOX is an abstract universal platform, there are still some limitations, such as the inability to change the hardware. PC allows users to replace hardware such as graphics cards, CPUs, memory and hard drives. The PC is therefore a more abstract system. The goal of CKB is to transform from XBOX to PC to meet more needs and provide more convenience to developers.
CKB Economic Model Analysis: Mining Rewards and Inflation Mechanism
CKB’s native token is CKB (Common Knowledge Byte), which represents the global state of the blockchain that holders can occupy. For example, if you have 1,000 CKBs, you can create a Cell with a space of 1,000 Bytes, and use these 1,000 Bytes to store assets, application status, or other types of data.
CKB’s economic model is very unique. In addition to halving mining rewards every 4 years (similar to Bitcoin), it also introduces an inflation design similar to mainstream PoS coins, with an additional issuance of 1.344 billion every year. As of now, according to statistics from ckbdapps.com, the number of CKB issued is 44.379 billion, of which the circulating supply is 43.69 billion. details as follows:
1) Genesis Release
A total of 33.6 billion coins were issued in the genesis block. In order to pay tribute to Satoshi Nakamoto, 8.4 billion CKB were deposited into Satoshi Nakamoto’s address at the beginning of the issuance. The remaining 25.2 billion CKB are allocated to institutional investors, ecological funds, development teams, public investors, etc., and have all been unlocked.
2) First level issuance
一级发行总量为 336 亿。与比特币类似，每四年减半一次，直至所有一级发行量都被开采。目前 CKB 已经于 2023 年 11 月进行了首次减半，发行量已经降至每年 21 亿 CKB。第二次减半预计将于 2027 年 11 月进行，发行量将降至每年 10.5 亿 CKB。一级发行的所有 CKB 都会奖励给矿工。
Specific distribution:
21.5% is used for public token sales, all will be unlocked when the mainnet is launched
17% is allocated to the ecosystem fund, 3% is unlocked when the mainnet is launched, and the remainder will be unlocked within 3 years
15% is allocated to the Nervos team, with a four-year vesting period and 1/3 will be unlocked when the mainnet is launched.
14% will be used for private placement in 2018, locked for two years
5% is allocated to the founding partners, locked for three years, and will not be circulated on the mainnet.
2% is used for the foundation reserve, which was unlocked in July 2020 and will not be circulated on the main network.
0.5% is used for testnet incentives, providing rewards to testnet participants through mining competitions and bug bounty programs
The remaining 25% has been destroyed
3) Secondary issuance
In order to ensure that the income source of miners is not affected by halving and on-chain transaction volume, CKB has introduced the concept of "secondary issuance", with a fixed issuance of 1.344 billion CKB every year. How CKB is distributed depends on how CKB is used on the network:
Miners: Proportional to on-chain state occupancy
NervosDAO: Proportional to the proportion of locked CKB in NervosDAO to the total issuance
National Treasury: Proportional to the proportion of CKB in circulation to the total issuance. The current governance mechanism has not been perfected, and this part is directly destroyed.
Secondary issuance can be viewed as an "inflation tax" mechanism. That is, if a user needs to store data or status on CKB, he or she needs to pay a certain amount of CKB as "state rent" to the miners. If storage is no longer needed, CKB can be unlocked and deposited into Nervos DAO. Those holding users who have no storage needs can directly deposit their CKB into Nervos DAO and receive subsidies to avoid the token value being diluted by secondary issuance.
According to CKB browser data, 11.4% of the secondary issuance tokens are used for mining rewards, 19.1% are used for lock-up subsidies, and 69.5% are allocated to treasury funds and destroyed.
Network computing power
CKB mining started on May 18, 2019, using the Eaglesong hashing algorithm. After March 2020, there has been a gradual shift from CPU, GPU, and FPGA to ASIC mining machines. Currently, ASIC mining such as Antminer K7 and Goldshell CK6 is supported (the income from CKB mining with GPU and FPGA mining machines is too low to be profitable).
Currently, the network mining power is 240.06 PH/s and the mining difficulty is 2.31 EH. Mining pools currently supporting CKB include F2Pool, Poolin, 2miners, etc.
Controversy continues. What do you think of Bitcoin’s new Layer 2 ideas?
On February 13, CKB co-created Cipher proposed the RGB extension protocol: RGB++. This move affected the secondary market price of CKB to a certain extent and triggered a discussion about the legitimacy of Bitcoin Layer 2.
Some users believe that compared to the EVM compatibility faction, RGB ++ inherits the legitimacy of Bitcoin UTXO, and the team is deeply involved in the Bitcoin ecosystem, whether it is the layered architecture, UTXO abstraction, or the recently proposed OTX protocol CoBuild Open Transaction. Extension and innovation of Bitcoin ideas. However, there is some opinion that CKB is overly positioned. From the cooperation with Huobi from 2019 to 2020, and the game direction from 2020 to 2022, no substantial progress has been made. Therefore, this shift to Layer 2 may be suspected of hype.
In addition, native Bitcoin developers also expressed their disagreement with the meaning of the RGB++ name, believing that there is a meaning of "Better than RGB". At present, CKB has launched the RGB++ roadmap. How it will perform in the future may only be answered after the test of time.
Since the beginning of 2024, competition among Bitcoin Layer2 solutions has intensified. However, no matter which solution is adopted, they have promoted the sustainable development and implementation of the Bitcoin ecosystem to a certain extent, and this competition may inspire more ideas and solutions. But fortunately, in this process, CKB seems to have always adhered to its original intention, insisted on being isomorphic with Bitcoin, and further bridged the shortcomings.
