When the Nervos Network—a new, two-tiered Ethereum competitor that relies on a proof-of-work blockchain—raised $72 million in a token sale, a huge chunk of the money was reserved for network development.
Nervos values its development grant pot at $30 million. It’s made up of the cash it raised from the token sale (its token is called the Common Knowledge Byte), as well as some of the money from the market.
“It’s actually not really that much money,” Ben Waters, Nervos’s head of operations, told Decrypt, considering the company’s plan to build up the network over the next five or ten years. “It’s a good raise,” he said, but “we definitely think we need to be very efficient with how we use the capital.”
Today, Nervos announced the first two recipients of the money. They’ll build some of the infrastructure for the Nervos Network.
The first, Summa, a small blockchain company based in San Francisco, will get $75,000 to build a set of open-source libraries that’ll make Nervos interoperable with the Bitcoin network. James Prestwich, co-founder of Summa, told Decrypt he first learned of Nervos in early 2019, and that he was impressed by its innovative state model.
Nervos gave the second recipient, Obsidian Labs, also based in San Francisco, $180,000 to develop a graphic IDE for developers building on Nervos. It’ll make it easier for companies to build on Nervos, Rose Ren, co-founder of Obsidian Labs told Decrypt. “With the Nervos IDE, developers will be able to read a simple tutorial on Medium and spend their time building rather than learning a new language,” she said.
The Nervos Network is a two-tiered blockchain network. On the base layer, a proof-of-work consensus mechanism confirms important transactions. On the top layer, developers can build applications with “unlimited scalability”, claim Nervos. Nervos is underpinned by the CKB token, which users can pledge in exchange for state storage space on the base layer of the network.
Given its reliance on proof of work, and Ethereum’s move toward proof of stake, Waters said that Nervos is for people who think that “that proof of work is the correct consensus algorithm, and the only real consensus algorithm that can deliver decentralization.”
It’s popular in China—the teams’ roots are in China’s crypto space, the core development team is based out of Hangzhou, and it’s raised money from China Merchants Bank International, the international arm of the major Chinese bank.
In around six to twelve months, Nervos will open grants for decentralized applications and use cases, said Waters; these two grants are a “precursor” to more advanced stages of development.