NEST Protocol 2022 Annual Summary

Author: NEST Protocol

Macroeconomic Environment

The Russia-Ukraine war, the Terra crash, the FTX collapse, and the Federal Reserve's interest rate hikes… The external environment and unexpected events of 2022 have caused waves of declines throughout the crypto industry.

Every project involved has been affected by these macro adverse factors, and NEST is no exception, enduring the negative beta of the industry in 2022 while moving against the current. Fortunately, we have the best team in the industry. Throughout 2022, BTC fell by 60%, while NEST rose by 232%, being selected by CoinGecko as one of the top 8 performing projects of 2022. All of this is thanks to the efforts of our team and the support of our community.

Project Development

FORT: Exploration of Decentralized Derivatives

In 2022, decentralized oracles had yet to find their market opportunity. Therefore, the NEST team began exploring decentralized derivatives protocols at the beginning of 2022 and launched a brand new project, FORT, based on the NEST oracle. FORT is a decentralized derivatives trading platform based on an infinite liquidity model (OMM), offering products including perpetual futures and options.

Before the Terra crash in March, FORT's highest daily trading volume reached $3M, making it the second-largest decentralized derivatives trading platform at that time, only behind dYdX. However, just when we thought we were on the verge of a breakthrough, the Terra crash hit the pause button for us. All decentralized derivatives protocols were impacted, and user trust in DeFi plummeted. Our trading volume shrank repeatedly and showed no signs of recovery for several months.

At the same time, the dual-brand operation of NEST and FORT incurred significant user education costs. In light of the deteriorating macro environment, we began to reassess these two projects. After higher-dimensional theoretical abstraction and deeper research, we were pleasantly surprised to find that the two projects should belong to a new foundational paradigm and should merge into a new on-chain infrastructure. After a month of discussion and analysis, we ultimately proposed the merger of NEST and FORT to the DAO.

Merger of NEST and FORT: Seeking Greater Goals

In July 2022, NESTDAO approved the merger proposal, and by the end of July, we completed the merger of NEST and FORT. At the protocol level, we integrated and restructured the code of the two projects. In terms of operations, we consolidated the resources of both projects and merged the Twitter and Telegram communities into one. Theoretically, Bitcoin established a new monetary network paradigm, and Ethereum established a new asset network paradigm. The infinite liquidity model we built is, in fact, a new trading network paradigm, which will be the most significant paradigm revolution following Ethereum. We released our new white paper, defining NEST as the infrastructure of blockchain, providing financial assets with any risk-return structure for all project parties and buyers.

NEST Development: Over One Million Community Users

In September, we participated in Token2049 in Singapore and Binance's Paris Blockchain Week, and in November, we attended Istanbul Blockchain Week, along with dozens of smaller conferences. Our team engaged in in-depth discussions with over 200 project parties and investors, repeatedly testing our theories and products against the market, gaining sharper insights into current market trends. Through these rounds of communication, NEST gained considerable attention in the industry, and many investment institutions extended olive branches (we did not have a financing need).

In terms of community building, our base is in the United States and South Asia. Our local community managers promptly address various questions from community users regarding NEST theory and products.

To help NEST community users learn more about cryptocurrency and to make the community more active, we launched a weekly Twitter Space - NEST Roundtable, inviting well-known crypto project parties, investors, and KOLs to discuss the topics most interesting to community users each week. We have conducted 22 such Spaces, with an average audience of over 5K per session. We firmly believe that the more people understand cryptocurrency, the more prosperous the industry will become, and the more prosperous the industry is, the faster NEST will progress. This is also the original intention behind our continuous user crypto education.

The series of events received positive feedback, and our Twitter and Telegram community users surpassed one million in 2022. We also established strategic partnerships with over 80 project parties and institutions.

CyberInk: Exploring a New Trading Paradigm for NFTs

To further explore the NEST ecosystem, in November 2022, we launched NEST's own NFT - CyberInk NFT, featuring AI, humanity, and space as the main elements, blending ink wash characteristics to create PFP-style NFTs.

NFTs were our team's first foray into this space. We collaborated with Element and PearDAO for the INO, and to our surprise, the initial release of 480 CyberInk Human series NFTs sold out within minutes, with the floor price in the secondary market exceeding the issue price by 300%.

This greatly encouraged our team, prompting us to further explore a new trading paradigm for NFTs, launching NFT mining and auction features. Users can mine various rarities of CyberInk NFTs using 99 NEST. After mining an NFT, they can auction it on NESTFi, where bidders can receive 40% of the price difference as a reward, while 10% of the price difference will be burned. We call this mechanism "Deflationary Auction," which continuously incentivizes our community users to participate in CyberInk NFTs.

The ecological development of CyberInk NFTs further promotes the diversity of the NEST-based ecosystem. A more prosperous NFT and GameFi ecosystem will help NEST achieve significant deflation, giving NEST a relative competitive advantage in Ethereum's deflationary era.

2023, NEST Will Rapidly Develop

In the blink of an eye, it's 2023, and macro uncertainties are gradually diminishing, while NEST's certainty is growing stronger. We are about to optimize our white paper from a theoretical perspective once again (five related research papers have already been published). NEST will launch "Martingale Network," a new generation of infrastructure paradigm following Ethereum. We will use smart contracts as the sole seller in on-chain financial transactions, meeting buyer needs while aggregating and hedging buyer risk exposures. Risks that cannot be hedged will be shared by all traders, fundamentally addressing the liquidity issues of risk-hedging assets.

Based on the "Martingale Network," the perpetual futures trading platform, NESTFi, is currently ranked 5th in decentralized derivatives according to DefiLlama statistics.

We firmly believe that in 2023, the negative beta of the crypto industry will turn into positive beta. NEST will develop vigorously and move forward with the trend. We are confident that we will enter the top 10 of the entire crypto industry by 2024, and the Martingale Network will lead the next round of the crypto bull market.