New DeFi protocol Nudge aims to unlock hidden value in users’ wallets

Nudge is set to launch a groundbreaking decentralized finance (DeFi) protocol on Ethereum, designed to unlock hidden economic value within users' wallets. Announced on August 15, the new protocol aims to create a two-sided marketplace where Web3 protocols offer incentives—referred to as “Nudges”—to users who redirect their on-chain assets, liquidity, and engagement.

The core innovation of Nudge is the introduction of a new DeFi concept called “Re: Allocation Value.” This concept represents the economic value derived from users’ on-chain activities. Nudge enables users to monetize this value by receiving payments or incentives to reallocate their assets, such as stablecoins, memecoins, or governance tokens, across various ecosystems.

Nudge’s platform uses programmable smart contracts to allow participating protocols to design “sophisticated eligibility and payout criteria” for their incentive programs. Key use cases include:

• Asset Nudging: Users earn rewards by reallocating their holdings between competing ecosystems.

• Liquidity Nudging: Users can enhance returns by moving staked Ether (stETH) or liquidity to the highest bidder.

• Activity Nudging: Protocols pay users to redirect their engagement towards desired activities.

Nudge aims to provide an alternative to traditional on-chain incentive mechanisms, like airdrops, which have faced issues with performance and arbitrary criteria. Jonathan Joseph, co-founder of SmartFunds, supports this shift, noting that more effective models are needed to inject liquidity into new protocols and benefit all stakeholders.

Initially launching on Ethereum, Nudge plans to expand across multiple ecosystems, including Solana, Bitcoin Layer 2 solutions, and more. The protocol is developed by DeFi Labs, known for previous launches like the compliant decentralized exchange Mauve and the on-chain identity protocol Violet.

source: https://cointelegraph.com/news/nudge-defi-unlock-wallet-value