Development of the NEST System: Building a Financialized Ecosystem from Demand

The NEST system is working hard to simplify and enhance usability to attract more people to participate in mining and use its products. Financialization is an important direction for the development of NEST, which can be inspired by the evolution of Ethereum. Ethereum has gradually gained strong financial attributes, evolving from its initial GAS payment function to an ICO financing tool and then to a DeFi liquidity mining tool.

NEST is exploring the production of more assets through linear operators and establishing an application closed loop with these assets and NEST. This process is similar to stablecoins, but different. Financialization can bring exponential effects, such as generating PUSD by collateralizing NEST, then purchasing NEST and continuing to collateralize, thereby continuously increasing leverage. This process will also increase the calls on oracles, thereby increasing the repurchase demand for NEST.

CoFiX 2.0 will achieve automated hedging and asset allocation. Users can place assets on-chain and automatically adjust to the edge of the security market line through a game-theoretic approach, while setting acceptable risk and return. This process is similar to AMM and can automatically generate or offset leverage, further strengthening buyback demand.

Based on price information flow, various trades can be designed, including options. The NEST system can play a role similar to Wall Street, where the DAO can act as the absolute seller of options, earning time value. With the establishment of the model and continuous financialization, the NEST system will enter a more standardized development phase.

The NEST 4.0 version plans to randomize mining and financialize the system layer to address the challenge of verification incentives. During the development process, the NEST team reflected on the traditional "consensus-price-ecology" path and believed it might lead to a collapse equilibrium. Therefore, they proposed a new "demand-ecology-consensus" path.

The NEST team believes that a non-cooperative game system may degenerate into a gambling-type project if it does not create socially acceptable new attributes and functions when in equilibrium. Therefore, they emphasize starting from demand, particularly from the deterministic needs within the system. For example, meeting miners' demand for quoted assets and achieving dynamic asset management.

The development strategy of NEST is to gradually expand outward from internal needs, sequentially meeting the different levels of demand from within the NEST system, the NEST ecosystem, related communities, and DeFi communities. This strategy of "not overflowing external demand" helps to solidify the underlying needs, increase system complexity, and ultimately create demand for the entire ecosystem.

Overall, the core development of the NEST system lies in continuously delivering value to the game theory system, creating new attributes and characteristics, thereby achieving a sustainable equilibrium state.