The Development Path and Financialization Strategy of the NEST System

The NEST system is advancing the popularization and enhancement of product usability to attract more users to participate in mining and usage. At the same time, the system is also moving towards the direction of financial assetization, similar to how Ethereum incorporates financial needs into its system.

The NEST team is exploring the production of more assets through linear operators and establishing an application closed loop with NEST. Although parallel assets have similarities with stablecoins, they are not entirely the same. The financialization process may bring exponential effects, such as generating PUSD by collateralizing NEST, then buying NEST and repeating the collateralization, continuously increasing leverage. This process will also increase the calls on the oracle, thereby enhancing the buyback demand for NEST.

CoFiX2.0 will implement automated hedging and asset allocation. Users can place assets on the chain, and the system will automatically adjust to the edge of the security market line through game theory, executing trades automatically based on the set risk-reward parameters. This mechanism is similar to AMM, promoting the automatic generation and offsetting of leverage, further strengthening the demand for buybacks.

In the STP model, various trades can be designed based on price information flow. For options trading, the main challenge is finding a counterparty. The NEST system can act as the absolute seller of options for the DAO, earning time value and acquiring NEST from the market, pushing the system into a deflationary phase.

The NEST 4.0 version plans to randomize mining and financialize the system layer to address the challenges of verification incentives. This decentralized risk management approach will bring new issues, such as the setting of the overall collateral ratio of the system and the fission of valuable assets.

The development path of blockchain projects is shifting from "consensus-price-ecosystem" to "demand-ecosystem-consensus." Many DeFi projects, while providing liquidity, are actually taking on a large amount of liabilities. A successful non-cooperative game system should create new attributes and functions recognized by society in a balanced state; otherwise, it may degenerate into a gambling-like project.

The NEST team believes that we should start from internal demand and gradually expand to a broader ecosystem. From within the NEST system to related communities, then to the wider DeFi and cryptocurrency circles, and finally to the needs of ordinary users. This strategy of "demand not overflowing" helps to solidify the underlying demand, increase system complexity, and ultimately create demand for the entire ecosystem.

The essence of demand is to continuously deliver value to the game system, and the core of value lies in the ability to exhibit new attributes and characteristics when reaching an equilibrium state. This is precisely the goal pursued by the NEST system, distinguishing it from other cryptocurrency projects.