---
title: 'The exploding Nash 2-of-2 NashX equilibrium'
created: 2021-05-15
modified: 2021-05-15
status: finished
confidence: possible
importance: 2
css-extension: dropcaps-kanzlei
...

An [incentive-compatible](!W) 'deposit-refund' mechanism for enabling trade without trusted third parties is the **exploding Nash equilibrium** where both parties put up 100% of the value in an 'exploding box', and if either is unhappy, the value is destroyed.
Thus, neither party gains from scamming the other, and so will cooperate honestly.

This can be implemented as '2-of-2' multisig escrow in [Bitcoin](https://en.wikipedia.org/wiki/Bitcoin "Bitcoin") & was popularized by the NashX website, and proposed for [darknet market](https://en.wikipedia.org/wiki/Darknet_market "Darknet market") use.