Nervos Network CKB Token: The Market Disruptor With 75% Uptrend, Outshining Top 100 Cryptos
13 April 2024 - 2:30AM
NEWSBTC
Amid a widespread price correction affecting the majority of the
top 100 cryptocurrencies, one digital asset has defied the trend,
surging to impressive heights. Nervos Network, along with its
native token CKB, has not only recorded significant gains but has
also climbed to the 79th rank in the market, raising questions
about the factors behind its surge. Nervos Network Decoded Nervos
Network is a proof-of-work (PoW) Layer 1 (L1) blockchain designed
to optimize application-specific Layer 2 chains. The network aims
to establish its native asset, CKB, as a more sustainable store of
value (SoV) compared to Bitcoin (BTC) while providing a more secure
smart contract platform than Ethereum (ETH). Bitcoin’s capped
supply and decreasing block rewards raise concerns about long-term
economic incentives for miners. Notably, the Nervos Network
tackles this issue by introducing a fixed annual secondary issuance
of CKBs and the base supply, providing long-term incentives for
miners. Related Reading: Traders Forecast Massive Rally For
Altcoins, But Why Is Sentiment “Down”? Nervos Network also
addresses the potential security risk associated with Ethereum. In
Ethereum, the value of its native asset, ETH, is not directly
linked to the value of Layer 2 apps built on top of it.
Nervos Network aims to mitigate this risk by ensuring that CKB is
used for transaction fees and storage, creating a stronger economic
relationship between the native asset and the overall network. How
Secondary Issuance And State Rent Drive Sustainability Nervos
utilizes a perpetual secondary issuance model to increase CKB’s SoV
properties. This model incentivizes users to continuously lock up
CKB in proportion to the size of their applications.
Furthermore, locked CKBs are subject to “state rent” through
inflation, which automates state rent payments and ensures a
sustainable economic model. Nervos Network introduces a secondary
market for chain space, enabling apps to unlock and sell CKBs
without requiring relevant storage. Investors can offset
inflation by purchasing CKBs and depositing them into NervosDAO, a
mechanism that receives a portion of the secondary issuance to
counterbalance inflation. Interestingly, this resembles “treasury
bonds” and offers potential investment opportunities. Approaching
ATH Amidst Bitcoin Integration Announcement Having delved into the
fundamentals, CKB has recently experienced a significant surge in
value, breaking out of a long consolidation phase that lasted
almost two years. After trading in a range of $0.0024 to
$0.0035, the cryptocurrency has broken through this price level
since January 30th and has seen significant gains over the past few
months. Currently trading at $0.032, CKB is close to its all-time
high (ATH) of $0.043, which was reached in March 2021. The token
has seen notable price increases of 47%, 69%, 75%, and 14% over the
past fourteen days, seven days, and 24 hours, respectively.
According to CoinGecko data, CKB has also seen a significant
increase in trading volume, reaching $207 million in the last 24
hours, 9.7% from the previous day’s trading. In addition,
CKB’s market capitalization has increased significantly, nearly
doubling from $740 million on April 2 to approximately $1.35
billion in just over a week. Related Reading: Uniswap Bloodbath:
UNI Price Crashes 16% On SEC Lawsuit Fears The price spike can be
attributed to the announcement that Nervos Network’s CKB token will
join the Bitcoin network. The token’s introduction of smart
contract functionality, along with its interoperability and
modularity features scheduled for 2024, has created excitement
among investors. As Bitcoin approaches the Halving that has
historically increased its value, Nervos Network is well-positioned
to benefit from its strong ties to the largest cryptocurrency in
the market. With its continued bullish momentum and the
predicted increase in BTC’s price, CKB may be poised to reach new
all-time highs soon. Featured image from iStock, chart from
TradingView.com
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