On November 11, 2024, Jake Stolarski, Founder and CEO of NERO Chain, delivered a keynote presentation titled “NERO ChainーGiving Power Back to the Applications” at the EVM Summit 2024: Bridging Global to Local.

What is EVM Summit 2024?

Held in Bangkok, Thailand, the EVM Summit 2024 brought together global leaders, entrepreneurs, developers, and investors to explore the Ethereum Virtual Machine (EVM) and the rapidly expanding blockchain ecosystem in Southeast Asia.

Organized by KX Venture Capital, HashKey Capital, L2IV, and Ethereal Ventures, the event featured panel discussions and keynote speeches. Topics included the role of EVM, Layer 1 and Layer 2 projects, and innovations in the Web3 domain. NERO Chain was among several notable projects showcased, offering insights into the future of blockchain technology.

What was discussed during the Keynote?

“Hi everyone, I’m Jake from NERO, and today I’ll talk about how NERO’s architecture is empowering builders with Blockspace 2.0.

NERO is an EVM chain with a customizable application environment. The concept may seem simple at first, but it addresses a fundamental issue: why applications leave their initial blockchain. In nearly 99% of cases, this happens because the economic alignment between the infrastructure and the application breaks down. As applications become more successful, this misalignment intensifies—more value is captured by the infrastructure than the application itself.

Take Uniswap as an example: it generated $6.4 billion in value for Ethereum, but token holders only experienced about 1% of that value. This creates downstream issues like fragmentation, as seen with the recent UniChain announcement. Developers expressed concerns about liquidity fragmentation, stating they won’t move liquidity to third-party bridges.

Another challenge is the high overhead cost of creating app-specific chains or L2s. Furthermore, security risks arise when developers decide to build their own chains, as demonstrated by the $600M Ronin Bridge hack and similar issues with DeFi Kingdoms.

Applications also face developer churn, moving from chain to chain, chasing better economic incentives. NERO reimagines this problem: What if we created an application environment that prioritized long-term economic alignment for builders? By shifting value capture up the transaction supply chain, reducing MEV (Maximal Extractable Value), and allowing applications to sequence their own transactions, NERO simplifies the ecosystem. This avoids the “supply chain spaghetti” where private meme pools and side deals dominate over 2/3 of transactions.

The Solution: NERO’s Paymaster

Our Paymaster offers several features:

• Real-time customization of gas token acceptance and markups
• Options for sponsoring gas fees based on addresses or times
• Flexibility to experiment with fee models and customer acquisition strategies

This allows developers to meet application-specific needs rather than being constrained by one-size-fits-all blockchain parameters. Many blockchains exclude large sets of applications due to arbitrary fee structures, high costs, or reliance on inflationary tokens to subsidize network security. NERO enables applications to optimize fees within a sweet spot, performing fee sensitivity analyses to align incentives and demand.

Token Utility and Positive Feedback Loops

NERO enables applications to create utility and demand for their tokens, kickstarting a positive feedback loop:

1. Increased demand raises token value

2. Higher token prices generate more revenue

3. Larger treasuries allow for greater user acquisition budgets

4. This cycle supports long-term ecosystem growth

For example, a simulation showed that if Uniswap transactions were denominated in UNI instead of ETH, the token’s price performance could have been more sustainable. With abundant blockspace today, such models are even more viable.

Benefits of NERO’s Approach

• Customizable fee policies controlled by developers
• Revenue sharing with the NERO network
• Real-time experimentation and adjustment of fees
• Reduction in MEV and volatility of gas fees
• Enhanced token utility and price discovery

Expanding the Model

NERO’s consignment blockspace model can integrate with other chains, such as Avalanche’s new chain or other EVM chains offering gas sponsorships. This flexibility allows NERO to act as a blockchain SaaS component for other ecosystems.

Transition to Blockspace 2.0

Today’s blockchains often have fixed gas fees and high volatility. NERO’s Blockspace 2.0 introduces flexibility, customization, and fee optimization, treating blockspace as a commodity rather than a static resource. Our mantra is simple: Your Users, Your Rules.

Demo: Paymaster in Action

In a live demonstration, we showed how developers can:

1. Create or import token

2. Add tokens to the Paymaster

3. Set fee policies in real time

4. Enable users to pay with these tokens through a Wallet SDK

This model allows developers to experiment with fee structures and user behaviors, paving the way for more granular and effective pricing strategies.

NERO empowers builders by aligning incentives, fostering token utility, and simplifying transaction economics. Through experimentation and integration, NERO paves the way for sustainable blockchain ecosystems.”

Topics Addressed During the Q&A Session

Tokenomics and Value Accrual
Q. How does NERO Chain help application developers align tokenomics and capture value with their tokens? Why not rely on existing tokens like Ether?
A. Often new users prioritize utility over value capture. NERO Chain enables applications to create demand for their tokens, moving away from inefficient models like fee burning. This approach fosters long-term value accrual and aligns incentives between applications and their users.

Adoption in a Crowded Ecosystem
Q. With the proliferation of new chains and tokens, how does NERO stand out, and what incentivizes users to adopt it?
A. NERO focuses on empowering communities with existing tokens but limited utility. By providing tools for experimentation and customization, developers can unlock real-world use cases, creating a feedback loop that drives token adoption and ecosystem growth.

Custom Token Usage and Valuation
Q. How can developers determine the value of custom tokens used as gas on NERO Chain?
A. Token valuation often relies on reference prices, which can be provided by oracles or manually set. NERO’s system dynamically adjusts markups, allowing developers to optimize fees based on user behavior without compromising retention or leaving money on the table.

Integration with Modular Blockchain Architectures
Q. Is NERO Chain designed as a standalone chain, or can it integrate with modular blockchain ecosystems?
A. NERO can function as both. It integrates seamlessly into modular stacks, offering its Paymaster model as a SaaS-like solution for chains such as Avalanche subnets or other modular architectures.

Initial Experimental Phase
Q. What are the goals for NERO’s mainnet launch?
A. The first three months will focus on experimentation, enabling developers to test tokens and fee models. This phase aims to refine user behavior insights and align incentives effectively.

Facilitating Interoperability and Gas Abstraction
Q. Can NERO be part of the foundational tech stack for interoperability (e.g., in ecosystems like “super chain”)?
A. NERO operates as “gas-agnostic” rather than “gas-abstracted,” enabling a self-sustaining model where demand grows alongside application success. This model aligns incentives across chains, making NERO an integral part of interoperable ecosystems.

Expanding Use Cases
Q. How does NERO address communities with underutilized tokens?
A. NERO enables developers to experiment with fee models, cross-promotions, and utility creation. This opens the door for previously undervalued tokens to find new use cases, unlocking growth and engagement within their communities.