How does NashCash.finance reach the Nash Equilibrium
The Nash equilibrium, also known as non-cooperative game equilibrium, is an important term in game theory named after its inventor, John Nash. The dominant strategy is the chosen strategy of a player in a game regardless of the strategy that the opponent uses. If two players in a game each adopt their respective dominant strategy, the combination of their strategies is defined as a Nash equilibrium.
In NashCash.finance, different people’s reactions by the NASH & NC price will eventually lead to nash equilibrium.
i) In section 1, everyone lock-in NC LP token and ‘try’ to burn more NC to reach the maximun speed, however in this case everyone’s burn ratios are similar, no one can reach the maximum speed (remember you have to burn 9x the global average of burn ratio to reach maximum speed).
ii) In section 4, everyone is selling NC and no one is locking, the price of NC will eventually worth nothing. Hence no one benefits from it.
iii) The nash equilibrium will cycle between section 2 and section 3