# 2. Problem Statement

Despite significant progress, DeFi continues to face structural weaknesses:

* Incentive Dependency: Over-reliance on high-inflation token rewards undermines stability and long-term sustainability.
* Fragile Economic Models: Most protocols lack intrinsic earnings, leading to speculative bubbles and catastrophic collapses such as Terra/Luna and FTX.
* Centralized Governance: Control often consolidates in the hands of a few players, reducing fairness and increasing systemic risks.
* Lack of On-Chain Fiscal Systems: Absence of public financial mechanisms results in governance inefficiency and unbalanced ecosystem development.
* No Financial Constraints or Pricing Rules: Protocols lack standardized mechanisms for behavior pricing, resulting in volatility and disorder.

NGP directly addresses these weaknesses by integrating economic sustainability, decentralized governance, and AI-driven optimization.


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