CKB will usher in the second round of unlocking at the beginning of next month. As the number one public chain of the new generation in China, this unlocking has been closely watched by many people. Some people think that the price of unlocking CKB will drop sharply this time, and some people are waiting for the drop to buy the bottom. People think that this round of unlocking will not have a great impact on the secondary market.

We have been paying close attention to CKB. We have written several articles before. We have conducted a more detailed analysis of this unlocking, hoping to discuss this topic with you from multiple angles.

In this article, I briefly analyzed the following points:

1) How many tokens are unlocked in this round, and how much of the total?

2) What is the flow of tokens unlocked in this round?

3) Is there a certain relationship between the recent rise in computing power and the rise in prices?

How many tokens will be released in this round of unlocking?

According to the data previously released by the official Medium, the CKB unlocked on May 1 mainly includes the tokens of the team, private placement, and strategic partners.

1) Team section

This part of the unlocked tokens is about 840.168 million CKB, accounting for 2.5005% of the total (15% for the team * 16.67% for the second round of unlocking)

This part of the tokens may not all flow to the market, and there is a high probability that they will enter the Nervos DAO. The sale of the tokens unlocked by the team at this time is of little significance to them. The money raised is nearly 100 million US dollars, which is enough for team development and construction ecological.

2) Private placement part

The second part is private placement, about 1.56972 billion CKB, accounting for 4.6718% of the total (private placement 14% * second round of unlocking 33.37%)

2/3 of the private placement tokens have been unlocked on the mainnet. The current price is around 0.0045, and it was around 0.01 at the beginning of the launch. Private placements can be realized at that time. Now is not a good time for private placements to sell their chips.

3) Strategic partner section

The third part is the tokens of strategic partners, about 420 million CKB, accounting for 1.25% of the total (5% for partners * 25% for this round of unlocking)

The total amount of tokens unlocked in this part is not very large, and they are all long-term partners, and the current market and price selling are not cost-effective.

So far, we have briefly summarized that the CKB unlocked this time accounts for 8.4223% of the total (2.5005%+4.6718%+1.25%), and about 2.82989 billion CKB will be unlocked.

Relatively speaking, the amount of this round of unlocking is not very large. The total amount of the first round of unlocking is several times that of this round. When the mainnet was launched, 36.8% of the total initial issuance was unlocked, and the public offering accounted for 20%. Around 0.01.

This round unlocked 8.4223% of the total amount, and the probability of the team and partners selling it should not be high. Private equity institutions are more difficult to judge, but private equity institutions such as Sequoia, Wanxiang, Jingwei, imToken, Spark, and Bixin are all in the industry. The builders should continue to support the project.

However, the current market is even worse than at the end of last year, and the popularity of the community has dropped significantly. It is hard to say whether private equity investors will cash out. They may hold currency and other market conditions, or they may directly flow into the secondary market.

Will the tokens unlocked this time flow directly into the secondary market, causing relatively large selling pressure? In addition to the secondary market, what other flows are there?

The flow of tokens - NervosDAO

One key point is NervosDAO. At present, the locked amount of CKB in DAO has reached 4.5 billion. That is to say, about 1/3 of the 12.3 billion tokens unlocked when the mainnet was launched may be locked in NervosDAO Yes, because locking in Nervos will continue to generate interest and earn income.

The tokens unlocked this time, the team and strategic partners are the builders of the project, and there is a high probability that they will be directly entered into Nervos DAO. If private equity institutions are optimistic, they may also enter into DAO. Of course, the overall market is not optimistic, and they may also be sold and exchanged for fiat currency , but selling at current prices may not be ideal.

The Flow of Tokens - Application Scenarios

The flow of unlocked tokens is nothing more than these points, selling in the secondary market, locking NervosDAO to earn interest, holding in personal wallets, and applying on the chain. However, at present, there are no heavyweight Dapps and application scenarios that can consume tokens on Nervos.

However, they still attach great importance to ecological construction, and allocated 30 million US dollars to support those teams doing infrastructure construction in Nervos. So far, 8 teams have received support.

Some of them have already been used in the ecology. For example, the DApp developed based on pw-sdk (called pw-dapp) can be directly run in the wallet environment of Bitcoin, Ethereum, EOS, Tron and other public chains, and other ecological resources It is a way to quickly build an ecology for your own use, which is pretty good.

Nervos is currently conducting developer training courses to teach developers how to use CKB Studio to develop Dapps. Maybe we will soon see more Dapps appear on Nervos and continue to increase the use of CKB.

Is the price increase of CKB related to computing power?

Finally, let’s talk about computing power and price. This is an interesting topic. CKB also experienced a sharp drop when the global market fell last time, but then rose from around 0.003 to around 0.0045, and the surge in CKB’s computing power happened to start to surge after March. So is there a necessary connection between price increases and computing power surges?

image description

https://explorer.nervos.org/charts/hash-rate

Through the data of the Nervos browser, it can be found that the computing power of CKB has been increasing sharply since the beginning of March, and has reached more than 6PH/s at present.

image description

https://charts.bitcoin.com/btc/chart/hash-rate#5moc

The green one in the picture is the price of Bitcoin, and the red one is the computing power of Bitcoin's entire network. The time is taken from the trend chart from 2016 to 2020. It can be seen from the figure that the computing power of the entire Bitcoin network has been rising steadily since 2016, and the two sharp drops in computing power are highly correlated with the price, which are the two big ones in November 2018 and March this year. At that time, the price fell to the cost price of many mining machines. In the big bull market at the end of 2017, the price and computing power ratio did not have a strong correlation, but then the increase in computing power accelerated significantly.

According to Jiang Zhuoer, the founder of LeBit Mining Pool (BTC.TOP), on the relationship between Bitcoin price and computing power, it basically confirmed my conclusion above.

Jiang Zhuoer believes that the Bitcoin computing power is basically determined by the currency price, which means that the currency price directly determines the computing power. Because the miners will always increase the computing power until there is no profit. Then the increase in computing power will increase the market's confidence in the currency price to a certain extent, because after the production cost of the currency is high, everyone will have a certain psychological support.

image description

https://www.sparkpool.com/token/CKB

According to the statistical data of Spark Mining Pool, in the past month, CKB price and computing power have shown a positive correlation. However, with the sharp drop in crude oil futures, even falling to a negative value, and the decline in the global market, it is difficult for the digital currency market to stand alone. There has been a decline in the market, and CKB also showed a certain degree of decline following the broader market.

The release amount is not very large, and it tends to flow to NervosDAO and the secondary market

Finally, to make a brief summary, the total amount of tokens unlocked this time is 2.8 billion CKB, accounting for 8.4% of the total initial issuance. Compared with the first round of 36.8% unlocking, the released amount is much less, but according to the market price The total value is not low, about 10 million US dollars. The current market environment is much worse than that at the end of last year. If it all flows into the secondary market, I am afraid it will not be optimistic.

However, the part of the team and partners unlocked this time are those who are optimistic about the Nervos ecology for a long time. There is a high probability that they will not directly sell CKB in this market, and the probability of entering NervosDAO is higher.

For private equity investment institutions, the current price of 0.0045 may not be a good time to sell their chips, but the overall market is not good, and they may sell for the principal, and form selling pressure in the secondary market.

The third point is that there is a certain positive correlation between the computing power and price of Nervos. As the computing power rises, the network is more stable and everyone has stronger confidence in holding CKB. And the mining giant Bitmain paid attention to and produced the CKB mining machine K5 , It also shows that they are optimistic about the Nervos ecology in the long term, which also gives more confidence to the market and CKB miners.

The above is just my personal opinion, welcome to discuss~