In our most recent Twitter Spaces, we invited Matt Quinn our Ecosystem Development Manager to discuss the current state of the bear market, what developers should focus on to weather the storm, the latest Nervos updates, and live questions from the community.
Now, let’s get into the first topic…
What are your thoughts on the current bear market?
This bear market that we find ourselves in is part of a natural cycle. The terms ,many people in crypto use, Bear market and Bull market, describe the boom and bust cycle of financial markets. These booms and busts are even more pronounced in crypto, with projects going very high, very fast, and other projects going very low, beyond anyone’s expectations like in UST’s case.
Bull markets are a time of economic expansion, bringing people together around ideas, creating opportunities like DeFi and NFTs (which are legitimate new innovations), but over time, the space starts to be very competitive, and in the long term, especially in bear markets, certain markets get heavily tested, leading to contraction and the loss of value. A good example are NFTs like CryptoPunks and Bored Apes that will probably go through a heavy test in this bearish phase.
Also, bear markets are for true believers, because everyone’s faith is getting tested. For example, in March 2020, when bitcoin was $3,200, only the true believers were buying amidst the prospect of lockdowns upon the world and the general sense of doom. The interesting thing about this specific bear phase is that it actually coincides with many negative world events that may test even the true believers amidst geopolitical uncertainty and inflation eating into consumers’ disposable income.
How should dApp developers adapt to this market?
dApp builders should plan for the long term. Even though it feels like the bear market is in full swing, you can see that Bitcoin is still around 50% from the ATH, which could be just the beginning of a protracted bear market.
Builders should look ahead to the future with a longer term horizon while playing it safer and being prepared for more ups and downs. Of course, over the long term, the future is bright for dApp builders with so much potential for innovation opening up in Web3, but it is going to be a more difficult journey than could have been anticipated a few months ago.
dApp developers should not seek out instant gratification from their work. When FOMO skyrocketed over the last 2 years, a project could champion an idea, implement something and relatively easily access capital through NFT sales or an IDO. In a bear market, this kind of fast-paced capital formation is not nearly as common.
Even though it’s one of the hardest things to do in this environment, community building is one of the greatest opportunities offered by a bear market. Even though things are challenging with much less enthusiasm and excitement in the air, I would say that now is the best time to seek out new cool people in crypto to hang out with online or find exciting projects that may be building something fun but have flown under the radar.
This is the time when the projects that will lead us into the next bull run start slowly building their momentum. While building a community during these times does not bring immediate gains, in the long run, if you build up a strong nucleus of believers in a bear market, when the bull market returns, the hype they will produce will be the reward of the hard work you’ve done through community building.
Are there any new Nervos technology updates?
Recently, the first hard fork of the Nervos Network was activated. The “Mirana” protocol upgrade brings a number of exciting developments, laying the groundwork for the implementation of cutting edge cryptography and blazing fast trustless light clients.
What I am most excited about is the launch of Godwoken V1, the next iteration of the Nervos Layer 2 EVM. This release gets us very close to 100% Ethereum compatibility, significantly reducing the barriers to entry for existing Ethereum developers to port dApps to run on Nervos. Contrary to Godwoken V0, there is no approval process to deploy on Godwoken V1, which honors our core principle of decentralization and will be tremendous for growth of the Nervos dApp ecosystem.
From a user perspective, Godwoken V0 will bring increased transaction speeds and the removal of the requirement to create a Layer 1 account (with 400 CKB) in order to utilize Layer 2 dApps. This means airdrops will now be possible and users can seamlessly onboard to Layer 2.
Is there anything else you’d like to share about Nervos and this bear market?
Yes actually, I want to acknowledge the subject of marketing. Marketing has always been a subject of discussion in the Nervos community and as we look into the bear portion of this cycle, I want to ensure that the community knows that there is a good amount of discourse within the foundation about the changing nature of this market and how to best approach our challenges.
Over the course of the bull market, we deployed an array of marketing strategies and as we take stock of where we have been and where we would like to go, we are doing so with a long term orientation and prioritizing sustainable growth. This means meaningful partnerships, building relationships with the right people in the industry and working very closely with developers in our ecosystem to ensure they have the support they need.
Build Club will provide marketing and technical support for early stage projects to launch on Nervos, and we are very excited about how this will accelerate growth of the Nervos developer ecosystem.
You can look forward to more Twitter Spaces and episodes of Hashing It Out, and we will be educating crypto enthusiasts at the major conferences throughout the year. This year our community will grow as new programs like BlockJam launch to attract new developers.
What’s a major challenge that you face?
I think it’s quite hard to hype people up about Nervos at this time. The complexity of the technology is high, and things have been designed in response to industry challenges like monolithic vs. modular scaling, state explosion, and virtual machine flexibility. You can see there are numerous domains of knowledge someone would have to be familiar with to really “get” why Nervos makes sense.
This is compounded by the fact that Nervos today is mostly foundational infrastructure. I like the metaphor of comparing a wheel to a Lambo. Even though the wheel is a foundational technology, it takes someone coming along and building something really cool with it for things to get exciting.
With the launch of Godwoken we can see what happens when we build on this foundation. It’s inspiring to realize that we are only at the start of developers getting their hands on this technology to begin dreaming about what’s possible. An important component of succeeding here is educating people on the underlying technology and its part in a bigger picture so people can see the grandness of our vision and potential of Nervos.
Questions from community
For some people, the staking process is hard to understand, will there be any new wallets that will ease this process?
Yes, you can look forward to the CKBull wallet which is being developed. CKBull is a mobile wallet that supports deposit and withdrawal functionality of the Nervos DAO, as well as .bit addresses and NFTs, without requiring users to sync a full node. We also have a project underway to implement CKB support in TrustWallet.
Additionally there is the Mercury framework, which improves the exchange implementation process. Nowadays exchanges have come to expect API’s to the blockchain which are similar to those of Ethereum, however because of the low-level nature of CKB, there’s some work to be done to present this kind of friendly API. Mercury fills in this gap and will significantly improve the process for exchanges implementing support for CKB.
How are you going to get more people to better understand what Nervos does?
The concepts that are required to explain Nervos are in fact difficult to understand. However, many years ago it would have been similarly difficult to explain smart contracts in the early days of Ethereum, but now, all you have to say is smart contracts and people already know exactly what you’re referring to.
With time, more awareness about Nervos will drive this kind of comprehension as well. We’ll be on the circuit, attending conferences to explain these concepts through peer to peer communication and continuing to refine our explanations of tricky concepts through digestible content.
Nervos is PoW, and we can clearly see that Bitcoin’s model is under high criticism. Are you feeling threatened by the PoS model?
No. This is a question that has been discussed regularly for as long as I have been involved with Nervos. The answer always arrives back at, “if there is a better model, we can change”
We will see Ethereum move to PoS this year. Because PoW and PoS networks are very different, there is already a rift forming in the community about this change. If there is disagreement, there will be a chain split, and very uncertain consequences.
The more time that passes, the less influence the Nervos Foundation will have on the direction of the Nervos network. While I can’t see the Nervos community ever coming to consensus to move to PoS, it is definitely a possibility.
I will say that Nervos is one of a few projects that is taking an active role in improving the Nakamoto Consensus. We have a researcher who is entirely dedicated to this, and Nakamoto Consensus innovation has been a pillar of the Nervos project.
As a community, we can embrace consensus innovation when the time is right. This is a very slow moving area, no one should expect anything to change suddenly. For those of you who think of environmental concerns, I would suggest checking out the Nakamoto Consensus innovations of the Chia blockchain, which significantly reduce the power consumption of the consensus process.
In closing, I want to say that there are times when all attention is focused on the foundation, especially by newcomers and especially in a bear market. People are constantly asking what is being done to push the ecosystem forward, and this is understandable. However, I suggest that people get out of that mindframe and think about Nervos as a community.
The ambitions that were set forth with the Nervos network are larger than a single team can accomplish. The scale of the Ethereum ecosystem or Bitcoin’s network effects are impossible to comprehend. For this effort to be successful it’s going to require a community of people.
While some chains may be able to buy or hype their way through a market cycle, collectively we are all working to create something that is future proof and can be used for not only the next year or two, but for decades into the future. I think mentally framing that this is something we are building together goes a long way to moving us along on this path.
We will go through this bear market together. Everyone contributing to the growth of Nervos is working hard and delivering, often quite independently. Eventually the hype will return, we are starting with a technical foundation like no other in the industry, and we are ready to play a very long game.
Make sure that you are following the official Twitter of Nervos Network for the latest news.
More Twitter Spaces to come in the future so stay tuned.