The Development Path and Financialization Exploration of the NEST System

The NEST system is committed to popularizing and enhancing product usability to attract more users to participate. Its core goal is to enhance the system's value through financialization. Similar to Ethereum's GAS payment function, NEST is also seeking to establish strong financial attributes.

Currently, NEST is exploring the creation of more assets through linear operators and establishing an application closed loop with NEST. Although this parallel asset is similar to stablecoins, it is not exactly the same. The financialization process can bring exponential effects, such as generating PUSD by collateralizing NEST and then purchasing NEST to form a loop, continuously increasing leverage. This process also increases the calls on the oracle, thereby enhancing the repurchase demand for NEST.

In terms of trading, automatic hedging and asset allocation will become possible. Users can place their assets on-chain and automatically adjust to the edge of the security market line through a game-theoretic approach, setting automatic trading parameters based on their risk preferences. This mechanism is similar to the operation of the automatic market maker (AMM).

Based on the price information flow, various types of trading can be designed. For options trading, the main challenge is to find suitable counterparties. In the NEST system, DAOs may play a role similar to Wall Street investment banks, acting as the main sellers of options, acquiring NEST by earning time value, and driving the system into a deflationary phase.

The NEST 4.0 version plans to randomize mining and promote financialization at the system level to address the challenges of verification incentives. This new decentralized risk management approach will raise a series of new issues, such as determining the overall collateralization rate of the system and identifying valuable asset fragmentation.

The development path of blockchain projects is shifting from the traditional "consensus-price-ecosystem" model to the "demand-ecosystem-consensus" model. This transformation stems from a reflection on the previous model's potential to lead to a catastrophic equilibrium. The new model emphasizes first meeting internal system demands, such as miners' demand for quoted assets, and then gradually expanding outward to establish a broader ecosystem and consensus.

In this process, the essence of demand is to continuously inject value into the gaming system. A truly valuable system should exhibit new properties and characteristics when it reaches a state of equilibrium, which is precisely the goal pursued by the NEST system.