Nudge announced on August 15 that it is launching a new decentralized finance (DeFi) protocol on Ethereum designed to unlock hidden economic value in users’ wallets.
It aims to create two-sided markets where Web3 protocols pay users incentives (or “nudges”) to re-delegate on-chain assets, liquidity, and participation.
Nudge will be launching a new DeFi native feature called “Re: Assigned Value,” which represents the economic value of a user’s on-chain activity, according to the company.
“Users can extract significant amounts of value by being paid or ‘nudged’ by the protocol to reallocate scarce goods on-chain,” Nudge said in a statement shared with Cointelegraph.
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Nudge’s programmable smart contracts allow participating protocols to create “sophisticated eligibility and payout criteria” for incentive programs, the company said.
According to the statement, “One important use case is asset nudging, where users can earn rewards by reallocating their holdings—whether it’s stablecoins, mimecoins, or governance tokens—between competing ecosystems.”
Other uses include “liquidity nudging,” where users reallocate staked Ether (stETH) or liquidity to the highest bidder to increase yield, and “activity nudging,” where the protocol pays users to reallocate their participation.
Nudges could emerge as an alternative to existing on-chain incentive mechanisms, such as airdrops, which have suffered from poor performance and arguments over arbitrary payout criteria.
“I think we’ve definitely reached the peak of airdrops,” Jonathan Joseph, co-founder of real-world asset platform SmartFunds, told Cointelegraph.
“We need a constructive model for providing liquidity to new protocols in a way that adds value to all stakeholders.”
Nudge says it will launch first on Ethereum and ultimately “expand to multiple ecosystems, including Solana, Bitcoin L2, etc.”
The protocol was created by German developer DeFi Labs, which previously launched Mauve, a compliant decentralized exchange, and Violet, an on-chain identity protocol.
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