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Price cannot tell whether a project is good or bad, but data can.
Written by: LeftOfCenter
The decentralized oracle system NEST has delivered a very eye-catching report card in just over a month since the launch of 3.0. It has not only established a number of high-quality projects including The Force Protocol, dForce, CofiX, etc. In partnership, its native token NEST has also been included and launched by many top exchanges . Following this is the fiery performance in the secondary market. The price of NEST has increased by more than 10 times in the past one and a half months. Even in the case of a certain correction, as of the time of posting, the price of NEST Compared with July 13th, it still maintains a considerable increase of 500%.
Of course, the strong performance of the currency price can only explain the market popularity of a project, and if we want to have a deeper understanding of a blockchain project, especially the current status of a decentralized community project, a series of indicators on the chain can It is the most intuitive and true reference basis. So, is NEST’s barbaric growth in the past period of time healthy? Let us first look at a set of data:
- After 3.0 was released, the total quotation assets in the NEST system continued to grow rapidly. According to the latest official dividend data, the total revenue generated by the NEST system reached 2267 ETH, which was an increase of 181 compared with the system revenue of the week before 3.0 was opened. %, and the proportion of NEST token holders’ income distribution continues to decline, which means that the nToken system is gradually growing.
- Since the launch of the nToken system, 23 high-quality Token quotation assets based on the Ethereum blockchain have been opened in the NEST oracle system, and the bid opening fee has reached 18.45 million NEST tokens; so far, 1088.5 have been destroyed in the NEST ecosystem Ten thousand NEST tokens have brought invisible value support for NEST tokens to a certain extent.
- Among the opened nToken quotation pair assets, the ETH/HBTC quotation pair has an absolute advantage in various data indicators. It not only takes the lead in opening bidding funds, but has burned about 4 million NEST tokens, accounting for the total burned amount. 22%; It also ranks first in popularity and has an overwhelming advantage. The current average quote block density is 15.7, which is about 1/4 of the second-ranked ETH/DAI quote pair.
- Since July 20th, nToken has accumulatively generated 2054 ETH fees, and successfully transferred 822 ETH to the NEST revenue pool, of which the ETH/HBTC quote pair generated 625 ETH, accounting for 76%.
- Even so, most miners are still mining ETH/USDT quote pairs. Only some old miners in the NEST community explore new mining opportunities in nToken. The scale of funds entering the nToken system for mining is not large and relatively scattered . The data on the chain shows that as of August 21, the income distribution time of the most recent week, the ETH system income generated by NEST Token accounted for 84% of the total , which means that 84% of the assets are mining NEST Token, and the remaining 16% Assets are mining nToken.
Among the above data, it is particularly noteworthy that the ETH/HBTC oracle quote pair not only ranks first in average quote block density, but also far surpasses the second place, which is about 1/4 of the second place. So, why is the offer so popular among miners? What investment opportunities does this quote pair bring? Is the nHBTC it issued worth investing in? To this end, Lianwen interviewed the NestFans forum to clarify these issues.
What is nToken?
Before diving into these issues, let’s first understand what nToken is and its operating mechanism .
nToken is a new quotation system newly added to the NEST oracle quotation system more than a month ago. It is essentially an extension of NEST 2.0, that is, on the basis of the original only quotation pair ETH/USDT, it supports the opening of any ERC20 token and ETH trading pair.
The NEST oracle quotation system is completely open and requires no review. This means that anyone can open any ERC20 token and ETH quotation pair. During the 5-day auction period, bidders only need to hold a minimum of 100,000 NEST to participate in the bidding. Once the bidding is successful, they can get permanently. The mining of nToken blocks releases the reward “5%” share. At the same time, most of the NEST tokens in the auction funds will be permanently destroyed.
Every time a quote pair is successfully opened, the reward token nToken of the quote pair will be generated. Take HBTC Token/ETH as an example. Once the transaction pair is opened in NEST 3.0, a token that maps HBTC will be generated in the NEST system. nHBTC”.
Holding nToken tokens can obtain the right to the system revenue of the quotation on the oracle track, and obtain ETH income distribution according to the proportion of positions held every week. Of course, nToken tokens can also be freely traded on exchanges, over-the-counter OTC platforms or DEX.
At present, the system ETH income of the nToken oracle track mainly comes from three sources. Part of the quotation fee paid by miners for mining nToken (quotation fee is 1% of the quotation ETH scale), and nToken quotation is a fee for verifiers (This is 0.1% of the ETH scale), and the ETH fee paid to the nToken system when DeFi developers call the price data of the nToken oracle machine (80% of the fee will enter the nToken revenue pool, and the other 20% will be rewarded to the area at that time Block quote miner).
NEST 3.0 track status of each oracle
After reviewing the basic principles of nToken, let’s take a look at the current development of the nToken system.
Shi Er told Lianwen that most of the funds in the NEST ecosystem are currently participating in the quotation of the ETH/USDT asset pair, and only some old miners in the NEST community are exploring new mining opportunities in nToken.
The data on the chain shows that as of August 21, the income distribution time of the most recent week, the ETH system income generated by NEST Token accounted for 84% of the total, which means that 84% of the assets are mining NEST Token, and the remaining 16% Assets are mining nToken. However, with the gradual development of the nToken system, NEST Token’s share of ETH system revenue is gradually decreasing. This means that although NEST Token will maintain a decisive advantage for a certain period of time, more and more miners are moving towards The transfer of other nToken quotation tracks, the gap between NEST Token and nToken quotation tracks is gradually narrowing.
So, what about the internal development of the nToken system? How many quote pairs have been opened in the nToken system? Among them, what are the most noticeable quotation pairs and data indicators worth looking at? How effective is the bidding cold start?
The data shows that as of now, 23 high-quality tokens on Ethereum have opened price oracles, including HBTC, DAI, HT, KNC, MKR, LINK, WBTC, BAT, OKB, COMP, ANT, YFI, etc.
It is worth noting that NEST 3.0 uses an auction incentive mechanism to open oracle price pairs, that is, to subsidize participants who have not successfully bid. Specifically, the mechanism will take part of the bid difference between the current bidder and the previous bidder ( 50%) is used to reward the previous bidder, effectively reducing the loss of bidders who failed to bid successfully. For example, speculators will directly buy NEST in the market to participate in the auction, and start to join the auction to earn NEST when the price is low. Since they know that they will not be able to bid the final bid, it is safe to earn NEST in this way. In this way, participants who have not successfully bid can not only get back the bidding funds, but can even earn NEST token income through nToken’s bidding incentives.
Such an incentive mechanism has also produced a good cold start effect and has encouraged the active participation of bidders. The data shows that since the launch of NEST 3.0, the auction funds generated by the 23 quotation pairs opened up to 18.45 million NEST tokens. Up to now, 10.885 million NEST tokens have been destroyed in the NEST ecosystem. The destruction is to some extent It can be said that it brings invisible value support for NEST tokens. Among them, the bidding funds generated by the ETH/HBTC quotation pair are as high as 4 million NEST tokens, accounting for 22%, ranking first.
It can be said that the ETH/HBTC quotation pair is a quotation pair that deserves special attention in the nToken system. In addition to fierce bidding participation, the ETH/HBTC quotation pair also ranks first in popularity. The current ” average quotation block density ” is 15.7. The block, with an overwhelming advantage over the second-place quotation pair ETH/DAI, has an average block density of 1/4 of the latter.
The average quotation block density refers to the average density of competitive quotations. It is measured by the number of blocks in the NEST quotation system. The smaller the number, the smaller the granularity of the quotation and the smaller the price delay. For example, if the price is reported every 10 blocks, the delay is 10 blocks, and the price is reported every 1 block, and the delay is 1 block. The delay will bring risks, and the delay of the block will bring the risk of price quotes. Therefore, for the oracle, it is necessary to reduce the block delay as much as possible to continuously reduce the risk of price quotes.
Taking the ETH/HBTC quote pair as an example, the average quote block density is currently 15.7 blocks, which means that ETH/HBTC generates an on-chain quote every 15.7 Ethereum blocks, which is equivalent to updating the on-chain every 2 minutes Price data, which means that the delay of the ETH/HBTC quote pair is 2 minutes. Considering that the offer has been online for just over one month, this is already a very good result.
In contrast, the longest online ETH/USDT quote pair in the NEST system is currently maintained at 2 blocks. The person in charge of the NEST community under the pseudonym Bruce told Lianwen that considering that most oracles on the market have a delay of more than 100 blocks, NEST is already the oracle with the shortest delay on the market.
Finally, let us look at another important indicator, nToken weekly revenue pool revenue distribution data.
It’s almost similar to NEST’s weekly revenue distribution mechanism. The difference is that nToken’s weekly revenue pool will pay 40% of the miner’s quotation (0.1 ETH/quote) for “blood transfusion” to the NEST revenue pool. This means that nToken The number of quotations in the system is directly linked to the value of NEST tokens. That is to say, as long as the number of quotations of any quotation trading pair in the nToken system increases, it will drive the weekly NEST revenue pool income distribution growth in the system.
For the core asset NEST token, each nToken quotation track is like a trickle from different channels, as one of the sources of value, it is transferred to the core asset NEST token, and the increase in the number of quotations in a decentralized manner is the NEST token. The value of currency transmission will increase the ETH income of NEST token holders through the weekly system income pool.
The data shows that since July 20th, nToken has accumulatively generated 2054 ETH fees. According to the current situation, 40% of them will be transferred to the NEST revenue pool. That is to say, nToken has successfully transferred 822 ETH to the NEST revenue pool. Among them, the ETH/HBTC quotation pair produced 625 ETH, which accounted for an overwhelming 76%.
Such blood transfusion is a loss for nToken miners, especially in the early stage when the oracle is not called by downstream DeFi applications. Compared with nToken miners, they subsidize part of their income to the NEST system revenue pool. So, why are there such active miners participating in nToken mining, especially the ETH/HBTC quote pair, what magic power is so popular among miners? In the nToken system, it has an overwhelming advantage in various indicators and data. What?
Explore the secret behind ETH/HBTC’s dominance
The fundamental point is that the decisive influence on the income of nToken miners is not the fee paid by the miners, but the call fee of the nToken oracle machine. According to the new white paper, when DeFi developers call the nToken oracle price data, they need to pay a certain amount of ETH to the nToken system. 80% of the fee enters the nToken revenue pool, and the other 20% is rewarded to the quoted miner who dug the block at that time.
So, why do miners favor ETH/HBTC quotations? Shier told Lianwen that this is because people have high expectations for HBTC , which has formed a strong community consensus and has produced a scale effect in the nToken system.
First of all, Bitcoin is currently the cryptocurrency with the largest market value, the most users, and the most significant network effect. The integration of high-quality native assets on the chain such as Bitcoin into the decentralized finance (DeFi) ecosystem has always been the supreme holy grail of DeFi. If BTC can be safely and trustlessly migrated to the Ethereum network, it is equivalent to that BTC can enjoy Turing’s complete smart contract, which will unlock a huge market at an unprecedented height, and the imagination is very large.
Because of this obvious trend, we have seen the birth of a variety of Bitcoin anchor coins and synthetic tokens based on the Ethereum ecosystem, including wBTC, imBTC, tBTC (Keep Network), sBTC (Synthetix), renBTC (Ren) and pBTC (ptokens) and HBTC etc.
Among them, HBTC is a BTC Token issued under the custody of Huobi Exchange in February this year, and HBTC strictly complies with the 1:1 guarantee assets. Huobi is currently vigorously developing new DeFi forces, including establishing a DeFi laboratory and launching a global DeFi alliance.
On August 26th, Curve’s proposal to add HBTC/WBTC fund pool CIP#5 was initiated. This is a non-lending pool that allows users to exchange these two currencies directly in both directions. Once passed, the fund pool can further increase the number of bits. The liquidity of currency anchor coins (Bitcoin tokens on the Ethereum blockchain).
In addition, the Maker Agreement is initiating a proposal to add HBTC as a collateral asset. Once passed, the demand for HBTC will increase, and the current approval rate is 100%. Pan Chao, the head of MakerDao China, said that the proposal is very promising. Big.
As the main asset, Huobi obviously has poured a lot of resources on HBTC, and the token has been widely supported in major DeFi mainstream protocols.
As the expression of BTC’s value on Ethereum, HBTC has received more resource support and has a visible development prospect. Once developed, it will promote the growth of demand for real-time price data of the asset in the Ethereum ecosystem, which will inevitably promote Miners are optimistic about the ETH/HBTC oracle and invest funds into the track to participate in quotation mining.
As most of the funds are currently participating in HBTC/ETH mining, the consensus of nHBTC has also begun to emerge, which has a strong network effect. In addition, due to the limited scale of funds attracted by the current nToken oracle system, the clustering effect is relatively obvious, so that the ETH/HBTC quotation pair presents an overwhelming trend in terms of average quotation block density and quotation asset size.
Data shows that since its launch, the cumulative scale of asset quotations in the nToken ecosystem has reached 410,920 ETH, of which the cumulative scale of ETH/HBTC asset quotations has reached 312,360 ETH, accounting for 76.1%.
At present, the price of nHBTC is maintained between 3 USDT and 5 USDT. For miners, it is mainly held, and there are occasional over-the-counter transactions. As the nHBTC consensus effect becomes more and more obvious, more trading channels will appear. Shier told Lianwen that there is already a group of miners intending to open an ETH/nHBTC trading pool on Uniswap to facilitate nHBTC transactions.
What is certain is that in the short term, Huobi’s continued support for HBTC will drive the growth of demand for HBTC quotations, allowing miners to continue to quote HBTC to invest funds. The direct impact is that the scale advantage of ETH/HBTC will become more and more obvious. The price of tokens has risen.
In the long run, the continuous output value to the outside is the key to supporting the entire ecosystem of HBTC and NEST, and the key to whether the system will continue to operate in the future. Because as a decentralized oracle machine, only when its core quotation asset pair ETH/USDT is verified by the market and can really be called by downstream DeFi developers and brings external benefits can it truly capture the outside of the system The value of it becomes a Product-market fit.
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