What is Nebulas?

Nebulas describes itself as an "Autonomous Metanet." Although this is a bit of an oversimplification, you could think of it as a search engine like Google but for blockchain data.

The Nebulas mainnet launched in 2018 and implemented a new Decentralized Autonomous Organization model. This model, along with Nebulas Go, would allow for better collaboration and contribution by the community. Users can propose and vote on proposals using their NAX tokens, an incentive and reward token for the Nebulas community earned by staking NAS.

Nebulas also launched nextDAO, a smart-asset platform for DeFi solutions. Users can use nextDAO to swap, stake, and send their coins. The core offering of Nebulas is the blockchain-based search engine. Like Google's Search Ranking, it has Nebulas Rank.

In this article, we will get into what is NAS, how does Nebulas work, and talk about NAS' use-cases, among other things.

What is Nebulas - Key Points

• Nebulas is a decentralized platform that allows users to search blockchain information.
• You can use Nebulas Explorer to look up transaction histories of specific addresses, transactions, blocks, and details about some tokens.
• It has two main currencies, NAS and NAX.
• The latest version of the Nebulas blockchain is Nebulas Voyager, the successor to Nebulas NOVA.
• It currently has over 36000 users and over 2300 developers.
• It has partnered or worked with DeepCloudAI, OKX, and others.

How Nebulas works

Now that we know a little about what it is NAS, let's look into the question: How does Nebulas work? 

Nebulas became fully decentralized in late 2020, almost six months after its Voyager mainnet update. Therefore, it works via a consensus and governance mechanism. But before we talk about the consensus mechanism, let's look at some of the unique features of Nebulas.

Nebulas Rank 

Nebulas Rank (NR) is a way for Nebulas to rank the existing blockchain data. Like other search engine algorithms, it has some criteria as well. These include the following:

• The frequency and amount of on-chain transactions of a user.
• Amount of liquidity provided by the user.
• How frequently does the user participate in the system governance?
• What kind of smart contracts or DApps have you contributed as a developer?

Nebulas Force 

This AI layer on the Nebulas network ensures the network doesn't split by a hard fork. In crypto, a hard fork is when the community or the developers are divided into two factions about certain upgrades or modifications to the system. This can end up splitting the network into two. 

An example of this is the Ethereum 2.0 upgrade currently in progress. 

Nebulas Force prevents things like this by creating a side-chain or a sandbox test environment. If a proposed update works in the test, it can be implemented on the main system or mainnet.

Proof of Devotion

This is a unique consensus mechanism that makes Nebulas stand out. It combines Proof of Stake, Proof of Importance, and the NR system mentioned above. 

(Graphic idea

Have a triangle with PoS, PoI and NR at its three points. In the middle of the triangle, put Nebulas PoD)

The following factors impact the algorithm's choice of nodes: 

• NAS staked
• How important are you in the system in terms of transaction quantity and quality, etc.? 
• Factors mentioned in the NR section above. 

Where is NAS used?

As the ticker suggests, NAS is the primary native currency of the Nebulas blockchain. It is used to pay transaction fees, earn on-chain rewards via staking and participate in network governance. 

1. Governance 

Since Nebulas is a DAO, it needs a criterion by which it can hand out voting power to the community members. The voting power depends on the NAS holding. The more NAS you have, the more NAX you can earn and play a role in community governance.

1. Transaction fees 

Like Ethereum, Nebulas also allows developers to make smart contracts. However, executing these contracts requires some gas fees. Similarly, other Nebulas transactions require gas and NAS in such cases. 

1. Staking 

We will have a detailed section on how you can stake your NAS coin below. 

Users can stake – or dStake, to be precise – their NAS coins in return for NAX coins. 

Nebulas founders/history 

The Nebulas team was founded in July 2017. NAS, the current native coin, started as an ERC-20 token on Ethereum. Nebulas held the NAS Initial Coin Offering in December 2017.

The first version of the updatable Nebulas Mainnet, Nebulas Eagle, launched in March 2018. However, this version lacked some of the current Nebulas features. In April 2019, Nebulas launched the next version of its mainnet, Nebulas NOVA. The third and current version, Nebulas Voyager, was launched on March 30, 2020. The current version provided support for Nebulas' bespoke PoD governance. This allowed Nebulas to become truly decentralized in late 2020.

Nebulas was founded by co-founders Hitters Xu, Aero Wang, and Robin Zhong. 

Hitters is the current CEO of Nebulas. He was also the founder of AntShares, the entity that later became NEO. Hitters also worked with Google for some time. He is a prominent crypto community member, especially in China, because he founded Bitclub, the first blockchain-centric community in the country.

Aero Wang was a co-founder of AntShares, and Robin Zhong was involved in Ant Financial's Blockchain Platform.

Nebulas tokenomics

As we mentioned above, Nebulas held its ICO in late 2017. At the time, it only sold 30% of the total supply of 100 million coins. 

What is NAS coin's initial distribution? The overall coin allocation was as follows:

• ICO – 30%
• Institutional investors – 10%
• Nebulas Foundation – 5%
• Community Ecosystem – 35%. These 35 million coins were subsequently burned on Oct 28, 2019.
• Founding team – 20%. At the time of writing, the reserve for the team is at about 11.5 million coins. The total initial reserve started releasing gradually in 2019. The reserve unlocks gradually over ten years for the finders and over three years for the staff.

According to Coinbase, the total circulating supply of NAS at the time of writing is about 62.5 million.

It is interesting to note that NAS price was at its highest before its massive 35 million coin burn in late 2019. 

NAS does not have a maximum supply. From the end of 2019, the coin has seen 3% inflation by adding new tokens. Although this may seem like a bad thing, it really may not be so. Keep in mind that Nebulas burned 35% of its total initial supply reserved for the community ecosystem in 2019, putting significant deflationary pressure on Nebulas price. Plus, adding new coins can allow the community to grow. So the positive effects of inflation may overpower the adverse effects.

How is NAS created/mined?

Like Bitcoin, NAS is minted through block creation. Using the PoD system, Nebulas chooses 51 candidate nodes. You can see the current top 51 nodes here. 

Out of these candidate nodes, the top 6 and a random 15 are chosen as Consensus Nodes for governance purposes. These nodes are chosen once every governance cycle. Every governance cycle is around one month long. 

The 51 candidate nodes perform the block generation function for the system. In return, they receive anywhere from about 3300-9900 NAS per month. Their reward is based on their ranking among the total 51 nodes. 

Besides the block reward, about 800 NAS are distributed to each node for participating in the governance process. These rewards put persistent inflationary pressure on Nebulas price.

Nebulas competition and how it fares

Nebulas is often referred to as the Google of blockchains. Its search tool is called Nebulas Explorer, a core offering of Nebulas but not its only offering. Nebulas also offers a stablecoin - nUSDT, unique upgradable smart contracts, a solid DApp development ecosystem, and DeFi facilities.

As a search and query platform, it faces competition from Coinbase Explorer, Blockchain, and Tokenview. These platforms cover far more data than Nebulas and are much more popular.

Nebulas also faces some tough competition as a blockchain that supports smart contracts. One of the unique things about Nebulas is its upgradable smart contracts which prevent faults due to bugs in the smart contract. Furthermore, developers can write these contracts in Solidity and Javascript, the same language Ethereum developers use.

But despite these features, Nebulas has not been able to attract a ton of traffic. Other layer one chains like Avalanche, Solana, and Cordano are much more prevalent in the alternative smart contract space. 

As for the DeFi capabilities, they are currently quite limited. Nebulas recently announced its partnership with Multichain. This allows users to route their NAS to BSC, where they can swap their coins for others. Although this cross-chain functionality is quite useful, Nebulas is still far from becoming a prominent player in any of the areas mentioned, including DeFi.

Nebulas partnerships & investors

Nebulas partnerships and collaborations include the following:

• DeepCloudAI for developing Nebulas Force, the AI layer that helps update the Nebulas Miannet
• WeOne and Coco for developing eSport games and enabling the development of a mobile ecosystem
• Bitsclub, the first Chinese Blockchain community, is listed as one of the companies mentioned on Nebulas homepage. As mentioned above, this community was founded by Hitters Xu, Nebulas' founder and CEO.
• Nebulas has previously been endorsed and recognized by local Chinese authorities like China's Ministry of Industry and Innovation technology. They were also rated among China's top six favorite blockchains, along with EOS and NEO, back in 2018.

Source: Nebulas

Nebulas’ strengths, weaknesses, opportunities, threats 

Strengths  

There are a few things that make Nebulas unique and a strong entity. These include the following:

• Its bespoke search platform, Nebulas Explorer, runs on the unique Nebulas Rank algorithm 
• A genuine DAO model focusing on community collaboration for projects
• Unique PoD model
• Hard-fork proof features like Nebulas Force
• Developer Incentive Protocol which attracts developers to develop useful DApps and stay on the platform

Weaknesses 

Even though Nebulas has taken steps to change its China-centric image, the truth is that its roots are in the Chinese community. As mentioned above, its founders were deeply involved with NEO, a niche Chinese project popularly referred to as the Chinese Ethereum. 

The Nebulas team seems to be predominantly Chinese as well. All of this can hinder Nebulas' outreach to western platforms and to audiences in western countries.

Opportunities 

Nebulas has always been a little weak at marketing the platform well. Even their tagline, 'the Autonomous Metanet,' is a little hard to digest. 

This might have to do with the fact that the community decides who will promote them on different platforms. This can limit the budget for specific marketing projects and dilute the power of outreach. 

If they can step up their outreach and present themselves in a less complicated manner, they can potentially attract traffic from users that could utilize Nebulas' use cases.

Threats 

The fact that Nebulas can only search data on a limited number of tokens or blockchains decreases its utility. 

Therefore, if it does not include more blockchains soon, its competition like Blockchain, Tokenview and Coinbase Explorer may remain far more popular than Nebulas.

(SWOT analysis with graphic)

Nebulas roadmap

You can get some idea of what may come next for Nebulas by looking at their projects and collaboration platform. Their most recent community project involved rebuilding Community Chain, a blockchain compatible with EVM. The proposal suggested using the chain to expand the Nebulas' SocialFi aspect. After getting approved in May 2022, the updated document mentioned that a team of people would be working on the project from the next month onwards.

Another proposal still open to voting suggests making node analytics easier so nodes can calculate their earnings easily.

Nebulas updates, news, highlights

Multi-Chain Integration 

Nebulas recently completed its integration with Multi-Chain, a cross-chain router protocol. This allows bridging NAS over to Binance Smart Chain. Users can now move NAS coins to DeFi platforms in the BSC network, like Pancakeswap, and swap them for other tokens.

The Nebulas Graph 

Source:  Graph Nebulas

Nebulas also collaborated with Graph in April 2021 to make Nebulas Graph. The Graph is a network on the Ethereum blockchain with a goal similar to Nebulas'. The Graph focuses on making blockchain data available across different blockchains. This puts it in the group of emerging Web 3.0 platforms providing the infrastructure for decentralized data networks. The Nebulas Graph supports the OKC blockchain, a smart-contract, EVM-compatible blockchain. OKC is backed by OKX (formerly OKeX), one of the biggest cryptocurrency exchanges in the world. 

OKeX Node Fund

Around the same time as this collaboration with Graph, Nebulas also established a $2m innovation and incubation fund. The fund's purpose was to incentivize the development of cross-chain compatibility of the Nebulas network with other blockchains. The first project the fund was used for was the establishment of a node on the OKeX Blockchain. At the time, it had only been a couple of months since this blockchain had launched.

Nebulas NFTs

At the start of 2022, Nebulas had a new year's gift for its community. Anybody participating in the network's voting process was eligible to claim a Nebulas NFT on BSC. This gift came just a couple of months before Nebulas completed its Multi-Chain integration allowing it to bridge to BSC. 

As mentioned in the announcement, these NFTs were released on BSC because they were supposed to be cross-chain compatible.

Is Nebulas the Google of blockchains?

As we mentioned above, people often consider Nebulas akin to Google. This association is not entirely misplaced because Nebulas' main offering remains its Explorer. The explorer is used to search blockchain information using blocks, transaction hashes, and addresses. 

But as you might notice, Google's use case is much larger than anything Nebulas can offer right now. So we can not consider Nebulas a direct competitor to Google. However, we can think of it as Google for blockchains. 

The blockchain space can use a search and query system that spans different blockchains. As Nebulas continues to grow and integrates more chains, it could make looking things up on these chains easier. This, in turn, would make these blockchains even more transparent. Transparency is a crucial aspect of Web 3.0 instead of the present trust-based systems.

Many blockchain-based systems, especially DAOs like Nebulas, run into the blockchain trilemma. This trilemma states that a system can only have two of three pillars of blockchain technology, i.e., decentralization, security, and scalability. Nebulas saw the effects of this trilemma in 2021. 

Because of how decentralized it is, Nebulas could not move forward with its voting system upgrade announcement. This happened even though Nebulas' legacy ownership wanted it to go forward. Issues like this highlight the differences between a centralized platform like Google and a decentralized network like Nebulas.

Where to buy NAS? 

You can buy NAS via spot trading at OKX, one of the biggest cryptocurrency exchanges in the world. Here is how you would do it.  

• Buy USDT using a Visa, Mastercard, Apple, or Google pay funds transfer. 

Skip this step in case you already have USDT or BTC. Instead, you can connect your wallet to OKX here.

• Open the spot trading option on OKX and:
• Ensure that NAS/USDT or NAS/BTC trading pair is selected.
• In the 'Manual Trading' tab on the left side, specify the number of NAS  you'd like to buy.
• You should see the price in USDT or BTC you have to pay in the tab. Click 'Buy' to confirm the transaction.

How to store NAS?

OKX

You can store your NAS coins in the OKX wallet. We offer you both online or hot and offline or cold wallet solutions. To make sure your private keys are never jeopardized during withdrawals, we use a semi-offline multi-sig authentication mechanism. 

We recommend using our cold wallets if you plan on holding your NAS over a longer period.

NAS Nano Pro and other wallets

You can also store your NAS in the dedicated NAS mobile wallet NAS Nano Pro or use their web browser extension. The mobile app is also used in the governance process, so storing your NAS in your wallet might be a good idea if you want to be a part of governance process. 

You can also store your assets on mainstream web wallets like MetaMask or Exodus. Look at how you can withdraw your funds from OKX here. You can find a list of other mainstream wallets that support NAS here.

How to stake NAS

You can stake your NAS on the Nebulas' dStaking nextDAO’ platform. For this, you must use one of Nebulas's two proprietary wallets. 

The minimum staking period is three days. And the unique thing about dStaking on Nebulas is that it is decentralized. This means that your NAS coins do not leave your wallet when you stake them. They just stay in your wallet, and the smart contract you pledged to checks for the coins randomly.

To stake your NAS directly at the Nebulas platform. 

1. Go to the dStaking.nextDAO platform 

Source: dStaking - Nebulas

1. Enter your wallet address and choose whether you will be staking your coins on the web or the Nano Pro wallet.

It is worth noting that the NAX returns on staking are variable rather than fixed. This is because it depends on the global pledge rate of NAS and the duration of the pledge.

FAQs about NAS and Nebulas

Is Nebulas a coin?

Nebulas is the underlying project or blockchain network that incorporates the Nebulas mainnet. The current version of this mainnet is called Nebulas Voyager, and it was launched in March 2020. 

Nebulas itself is not a coin. However, Nebulas mainnet has two coins. The main one, which Nebulas offered in its ICO, is called NAS. The other is NAX. 

How do you mine Nebulas coin?

Nodes selected through the bespoke Nebulas PoD mechanism perform block creation for the network in return for NAS. This is how NAS coins are mined. 

Initially, there were 100 million NAS coins, and the currency inflates by 3% each year due to the addition of new coins into the system.

In summary, the requirements are as follows:

• A Nebulas address
• Hardware specifications 
• 20K NAS as collateral and 
• At least 100,000 NAX pledge 

What is the difference between NAS and NAX?

NAS is the coin that powers the Nebulas ecosystem. It is used to pay transaction or processing fees and earn NAX by staking. 

NAX is a coin meant explicitly for use in the Nebulas ecosystem. It plays a part in the governance process and voting on projects.

Is Nebulas Chinese?

Nebulas have offices in Asian countries like Singapore and China. Its founding members are Chinese, along with the staff featured in their 'Thoughts on the Future of Blockchain' video linked on their website. However, it's worth reiterating that Nebulas is now a decentralized platform, so it is not under the control of any centralized institution, whether that institution is based in China or elsewhere. 

Nebulas also have its headquarters in San Francisco, California. Although many of its collaborations have been with organizations with a legacy in China, it is still a global community.