Turing's Legacy: The Evolution of Oracle Machines and the Innovation of the NEST Protocol

In the summer of 1954, computer science pioneer Alan Turing poisoned himself at his home in Manchester, England, ending his legendary life. To commemorate this scientist who made outstanding contributions to the fields of computer science and artificial intelligence, the computer community established the "Turing Award."

Turing proposed a concept during his lifetime: the existence of a "box" that can continuously provide data to computers. In centralized systems, inputting information is not difficult, but ensuring the authenticity of the information and preventing human manipulation has become a technical challenge.

The blockchain field has been exploring new directions for Turing experiments. With the booming development of decentralized finance (DeFi), the "Oracle Machine" that provides pricing for DeFi products has moved from niche to mainstream.

Currently, Oracle Machine projects are flourishing, each with different mechanisms. The NEST protocol takes a unique approach by putting the price formation process on-chain, creating "fact prices" through user participation in "quote mining" and arbitrage games across different trading pairs, eliminating the trust cost associated with off-chain processes. The NEST system provides ample incentives for quote "miners", allowing quote providers to earn token rewards and share in ecological benefits.

The "quote mining" of NEST has the simplicity and reliability similar to Bitcoin's POW, while its token economic mechanism is similar to "liquidity mining", providing sufficient incentives for participants. It can be said that NEST has completed all aspects of the Oracle Machine on-chain, making it an ideal form of the Oracle Machine.

The Development Space of Oracle Machine

Most Oracle Machines rely on off-chain gaming systems, providing data and reaching consensus through an off-chain node network. This method has trust costs, and users must trust the off-chain data acquisition process. Most projects focus on how to ensure the authenticity of the data from the off-chain network and the credibility of the nodes, but the mechanisms are often complex and difficult to control.

The NEST protocol aims to eliminate uncontrollable factors and directly conduct gaming on-chain to form "price facts". The system mainly relies on two types of participants: quoting miners and validators.

• Quoting miners deposit two types of tokens into the contract based on market prices and pay a fee.
• During the price public announcement period, arbitrageurs can challenge and correct the prices.

This mechanism effectively prevents price manipulation, forming "price facts" completely on-chain. Data callers can see the entire process without needing to trust the data source. Correct quotes will be rewarded, while malicious quotes will incur losses due to arbitrage. As the fund pool increases, the cost of malicious quoting will become extremely high.

In addition, NEST token holders can receive dividends from system fees and play an important role in the creation of new trading pairs and auctions, incentivizing market participation.

Looking at the entire track, the current situation of NEST does not match its value. Its well-developed token economic model has huge growth potential. From the perspective of project valuation, NEST still has a lot of room for growth compared to leading projects. With the booming development of the DeFi field, NEST is expected to become the preferred solution for more projects.

NEST's Token Economic Model

The diversified incentive model of NEST provides positive feedback for ecosystem participants, promotes the prosperity of the secondary market, and even becomes a long-term stable investment option.

In addition to introducing incentives and game mechanisms during the data generation phase, NEST has designed a unique incentive for token holders: tokens can be deposited into the contract to receive system ETH profits on a weekly basis. This adds a dividend mechanism outside of governance, encouraging holders to participate in ecosystem construction.

The revenue of NEST mainly comes from the fees charged by quotation miners and the data usage fees of downstream applications. All fee collection and distribution are completed by smart contracts, ensuring transparency.

According to historical data analysis, the valuation of NEST could be 23-33 times the current price. Compared to cryptocurrencies lacking cash flow support, the stable growth of NEST provides strong support for its price.

Additionally, the NEST protocol supports quotes for any ERC20/ETH trading pairs, allowing users to create new Oracle Machine trading pairs. Once successfully activated, the auction funds will be permanently destroyed, granting NEST the possibility of "infinite deflation." As more valuable projects are integrated, NEST tokens will continue to be destroyed, enhancing value.

NEST: Building a New Infrastructure for DeFi

Compared to the simple "information flow" Oracle Machine, NEST's path to forming "price facts" on-chain is more challenging. Most Oracle Machines choose consensus models with lower thresholds for rapid expansion, but in the choice between "trusting data" and "trusting facts", NEST has provided its own answer.

By forming a sandbox quotation market through the actual funding quotes of on-chain miners, validators will continuously correct data to reflect true prices under the drive of interests. As the quotation market flourishes, the NEST ecosystem will become stronger. However, the simple information input-style Oracle Machine may create a red ocean due to its low threshold, and the emergence of malicious projects may reduce people's trust in "price information."

Generating real data in a decentralized manner on-chain, this trustless approach will scale with the development of the DeFi ecosystem, which in turn can enhance data efficiency and accuracy, creating positive feedback. As the number of validators and arbitrageurs increases, the migration costs of projects will continue to rise. The NEST protocol, with its first-mover advantage, is expected to create a winner-takes-all situation in the Oracle Machine track.

The crypto community has a famous saying: "Don't trust, verify"(. Don't believe, verify). The NEST network is a practitioner of this philosophy. When building a "perfect" quotation system, it must be assumed that it is faced with the most lies and the greatest malice. Only when real on-chain information can still be formed in such a harsh environment can it be considered an excellent Oracle Machine system.