Decentralized Platform Nebulas Introduces Ranking Algorithm to Quantify Blockchain Data


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Since Satoshi Nakamoto developed bitcoin using blockchain technology and unleashed the cryptocurrency revolution, decentralization has been heralded as the technology’s backbone, namely for its openness and anonymity.

These key features, however, make it difficult to determine if certain accounts belong to the same user, making it challenging to create an HTTP cookie or to use traditional data analysis to identify user characteristics.

The openness feature, furthermore, makes the blockchain vulnerable to manipulation, particularly for value measurements.

Even the Ethereum blockchain, which extends the possibilities of blockchain applications, does not have value measurement. Critical information is often concealed in a smart contract’s invocation process, information with more dimensions than traditional transaction data, and cannot be evaluated.

Enter Nebulas

The developers of Nebulas, a decentralized platform that provides a search framework for all blockchains, have recognized the need to quantify data value, applications, and accounts on blockchains. The need is critical, based on continued scaling and the need for efficiency.

Value measurement is needed to enable the necessary collaboration in blockchains.

Because blockchain technology is at an early phase of its development, assets and the value of the data remain unknown in many blockchains.

Value measurements are needed to identify the values and support new applications, such as credit, loans, cross chain interaction, personalized recommendations and data searches.

In addition, incentives, which are needed to sustain blockchains, require value measurements.

Enter Nebulas Rank

Nebulas Rank (NR), Nebulas’ core ranking algorithm, is based on liquidity, the propagation of users’ assets, and interactivity among users. NR, according to its recently released yellow paper, is used to rank addresses, smart contracts, distributed applications (DApps) and other blockchain entities. The rank of a smart contract plays an important role in the whole economy, helping to find high-quality DApps and to motivate developers who build these apps.

NR’s goal is to provide necessary value measurement for blockchains, offering an evaluation of the user accounts to the aggregate economy.

Elements of a successful value measurement include truthfulness, fairness, and diversity.

The rank has to measure a characteristic in the system so that it can be trusted in some way. NR defines truthfulness as the quantification of an account’s contribution to the blockchain.

Fairness refers to the ranks resistance to manipulation.

As for diversity, because different applications will have different ranking requirements, the algorithm should cover different scenarios.

Evaluating NR

To evaluate NR’s effectiveness, the sum of all accounts’ NR on Ethereum was compared to the market capital provided by A strong correlation of about 0.84 was found between them, meaning Nebulas can measure accounts’ contribution at a micro-level, while it can also measure the system’s value at the macro-level.

To ensure justness, a special mechanism was devised to resist manipulation. An analysis indicated its performance was manipulation-resistant.

NR is divided into Core Nebulas Rank and Extended Nebulas Rank for different scenarios and applications.

Core Nebulas Rank

Core Nebulas Rank’s objective is to assist in establishing a value measurement system on a blockchain.
Core Nebulas Rank calculates an account’s contribution to the whole blockchain system in a certain time period and calculates the median stake of an account and the in-and-out degree of the account.

Core NR measures a user’s contributions to the economy in a specific time period. The algorithm considers the transaction network’s coinage and the account position information. Issues in equation include median account stake, in-and-out degree and selection of the function.

The Core Nebulas Rank shows each account’s contribution to the total economic aggregation, as each node can measure the contribution for a specific account.

The Core Nebulas rank calculation will change as the economy changes, making it important to update the algorithm rapidly. This can be accomplished by upgrading the calculation algorithm through Nebulas Force.

Extended Nebulas Rank

Extended Nebulas Rank is based on Core Nebulas Rank, and can show how to rank smart contracts based on Core Nebulas Rank. Extended Nebulas Rank assures continuous incentive to the Nebulas economy under different use cases.

Because multi-dimensional data is needed to calculate the correlation between different types of data on a blockchain, Extended Nebulas Rank is multi-dimensional and can be represented as a vector with the Core Nebulas Rank as one dimension.

Future work will include cross-chain Nebulas rank, including cross-chain data interaction and digital asset transfer. When developers transfer DApps from one chain to another, a way to calculate the DApps’ Nebulas Rank will need a value measurement among different chains.

NR cannot ignore the contribution to the community. One challenge going forward will be to evaluate community contributions.

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Lester Coleman is a media relations consultant for the payments and automated retailing industries.