New Exploration of Blockchain Oracles: Innovation and Potential of NEST Protocol

In the field of Blockchain, oracles have always been a key technology that connects on-chain and off-chain data, attracting significant attention. With the rapid development of decentralized finance (DeFi), the importance of oracles has become even more prominent. Among the many oracle projects, the NEST protocol stands out with its unique design concept and innovative mechanism.

The NEST protocol adopts a brand new method to generate price data. Unlike traditional oracles that rely on off-chain node networks, NEST places the entire price formation process on the blockchain, forming "fact prices" through user participation in "quote mining" and arbitrage games. This method not only reduces the trust cost associated with off-chain processes but also enhances the reliability and transparency of the data.

In the NEST system, there are mainly two types of participants: quoting miners and validators. Quoting miners deposit a certain proportion of token pairs (such as ETH and USDT) into the NEST contract based on their judgment of the market price. Each quote has a minimum threshold, currently set at 30 ETH, and a 1% service fee must be paid. After quoting, there will be a public announcement period (about 5 minutes) during which other participants can challenge the quote. If no one challenges, the price is recognized as the current market price. If someone engages in arbitrage, the price will be corrected.

This mechanism effectively prevents price manipulation, as erroneous quotes can lead to financial losses. As the size of the funding pool grows, the cost of malicious quotes will become extremely high. Compared to relying on off-chain data from certain nodes, the prices formed by NEST are more decentralized and trustworthy.

The token economic model of NEST is also quite unique. Token holders can regularly receive dividends from the fees collected by the system, providing additional income for long-term holders. In the NEST 3.0 version, NEST tokens play an important role in creating and bidding for new trading pairs, further enhancing their ecological value.

From a valuation perspective, NEST currently seems to be undervalued. Compared to leading projects in the Oracle Machine field, NEST's market capitalization still has significant room for growth. With the continuous expansion of the DeFi ecosystem, NEST is expected to become the preferred solution for more projects.

The revenue of NEST mainly comes from the fees of quote miners and the data usage fees of downstream applications. All fees are collected and distributed through smart contracts, ensuring the process is open and transparent. According to estimates from the cash flow discount model, the potential value of NEST could be 23-33 times its current price, demonstrating huge growth potential.

In addition, the nToken system in the NEST protocol supports the quoting of any ERC20/ETH trading pairs, which brings the possibility of "infinite deflation" to NEST. With the integration of more valuable projects and the increase in trading pairs, NEST tokens will be continuously burned, further enhancing their scarcity and value.

The NEST protocol's choice to form "price facts" on the chain is full of challenges, but this trustless approach may become an important infrastructure for the development of the DeFi ecosystem. As the number of validators and arbitrageurs increases, the NEST ecosystem will become stronger and more efficient. With its first-mover advantage, NEST is expected to occupy an important position in the oracle machine field and may even become the industry standard.

In the cryptocurrency community, "Don't trust, verify" is an important principle. The NEST network is a practitioner of this philosophy. By building a system that can generate real on-chain information even in the harshest environments, NEST demonstrates its potential as an excellent Oracle Machine solution. With the continuous development of the DeFi ecosystem, the NEST protocol is expected to play an increasingly important role in the future blockchain infrastructure.