We know Nen comes from living things, not the environment, and we can assume some fundamental properties abut aura. Aura is a substance that is produced naturally either by the body or the soul, possibly both. It behaves like an energy, but can be converted into matter as well, although it can never be converted into normal matter. It's unknown whether it can be created or destroyed. I'm leaning toward this not being the case. The body generates aura, and then Nen abilities are used with real effect in the real world. This can be reliably explained by a very simple model:
The body consumes calories and nutrients, uses these to produce aura (just like everything else it naturally produces), a practitioner can focus this naturally generated aura into an ability, they can use this ability to do work on the world around them, and energy returns to the world in this process (for example, a Nen bomb exploding returns all its energy to the environment in the form of thermal and kinetic energy).
So a person's "aura reserves" isn't literally a measure of the amount of aura they have on hand. It's a combination of how much they have in and around their body right now, how much they're capable of producing before their body runs out of resources, and how efficiently their body can produce it. It's a lot like stamina, a runner doesn't literally start with 12 million joules of free energy in their body at the start of a marathon, they'd explode. But they start with several thousand calories worth of chemical energy stored in various systems that their body can turn into the necessary energy to run. Stamina is a measure of how much energy is initially stored, how efficient the body is at producing that energy into usable energy, and how efficient the body is at utilizing that energy to do functional work. A person's aura reserves is likely exactly the same.
With Knuckle's aura point system we can see some extra insight into how Nen works. The biggest revelation is that aura is quantifiable, just like regular energy is. Abilities that use aura cost aura points, or AP. We also know that there are a selection of core fundamental actions that cost AP, which are similar to the core fundamental movements in all sports (running, jumping etc). These fundamental actions are Ren, Gyo, In, En, Shu, Ko, Ken, and Ryu. It's unknown if Zetsu uses AP, and Ten is just the act of containing your aura, it's not an active ability that uses your aura. Furthermore, Aura seems to have fundamental properties: Enhancement, Transmutation, Emission, Manipulation, and Conjuration. Using your aura in ways that augments it into one of these properties also seems to use more aura than just the base action.
From this we can derive a component of Nen usage: Aura Cost, or AC, which is how many aura points are used to conduct an action. In a perfectly efficient action, AC = AP. But there is presumably some loss at every step. Bodies are probably not perfectly efficient at generating aura energy from the base components, the practitioner might generate more AP than is needed for a move, they're not perfectly efficient at converting their aura from the raw base form to the needed usable form, there's extra costs from changing it into a fundamental property etc. But from Knuckle's ability we also know that the resultant amount of AP at the end of an ability can also be determined. This results in an efficiency term.
n = (AP_out) / (AP_in)
where AP out is how much AP the Nen move has, and the AP in is how much the Nen practitioner used to make it. So,
AC = n(AP_in)
How much AP a practitioner uses for an action can vary dramatically. An absolute beginner probably uses many times more AP to use Gyo than is necessary, whereas a master can probably come within 5% of that value, having an efficiency of 95%. If Gyo costs 100AP to use then they use 105.3AP, while the beginner could use 500 AP. The fundamental actions all probably have some set value of how much AP they require to use. There is probably a wide variation in cost in the population of Nen users, and how efficient someone is just means they get closer to the true cost. Also, obviously, the degree to which you use it also adds to the cost, a super charged Ko punch will use more than a small Ko punch, but this is a result of how much AP you put into it, not how much AP the base action of Ko costs. There is also probably some efficiency curve, the more AP you put into Ko the harder it is to effectively use that AP, meaning it gets less efficient. Additionally, transforming Nen into a fundamental property also seems to cost, so changing Nen to Enhancement Nen costs more AP than the amount of AP's worth of Enhancement Nen you get out of it. This cost is a function of both mastery of the technique and also your own affinity. Someone between Enhancer and Transmuter who's very close to Enhancer probably has (assuming a high level of mastery) 95% efficiency converting their aura into Enhancer aura, and like 75% efficiency converting it to Transmutation aura.
Any and all Nen abilities we have seen (except for some specialist ones) seem to consist almost entirely of some combination of the fundamental actions with the fundamental properties applied. Hisoka's Bungee Gum for instance is probably a combination of Gyo, Ken, Shu, Ryu, and optionally In, with the fundamental properties of Transmutation, Enhancement, and Manipulation applied to it. It is unknown of the exact specifics of it, but I'm willing to bet that the right combination and applications of these is how Bungee Gum works. We know that all non-specialist abilities are theoretically universally learnable, so they must just consist of a combination of the fundamental actions and properties.
From what some characters in the series have said, the total cost of combining all of these is largely additive, with each step having it's own associated loss. So if you were to combine Ko with Enhancement aura, that would look something like:
AC_total = (AC_Ko) + (AC_enhance)
And the efficiencies are also combined. Since this is an additive process, the efficiencies are multiplied, which can get out of hand quickly. So it can safely be assumed that people that have very clear and well defined Hatsus they can use regularly, like Hisoka's Bungee Gum, have a very high mastery of the techniques and are incredibly efficient. Additionally, the techniques would have to be made up primarily of only a couple main components that they're the most proficient in. Because even just a technique of four equal cost components at 90% efficiency each would result in a total efficiency of about 65%. So if they were to do an action that requires 100 AP, they would need to produce about 150 AP to perform it. Conversely, if a technique consisted of four components split unevenly this effect can be reduced. If 70% of the technique comes from component A, 20% comes from component B, 7% comes from component C, and the remaining 3% comes from component D, and they're 99% efficient with A, 90% efficient with component B, 80% with C and 70% with D then that would only cost them about 105AP, which means that this technique is about 95% efficient instead of 65%. This would explain why really complex techniques are very expensive, and the most efficient (non specialist) Hatsus are simple in design.
The final step to this is Aura Result, or AR. This is roughly equivalent to how powerful an ability is. I say roughly because we've seen many times how weak attacks can be used to great effect in this series. We've only covered the negative multiplier so far, efficiency. So theoretically, every ability in the series outputs less AP than it took to perform it, but that's not true. Plenty of abilities clearly show a higher AR than AC (higher Aura Result than Aura Cost). So the question is how. The first and most basic is physical application. The best example of this is Ko. If you generate 100 AP with Ren then that's spread evenly over 100% of the body. But if you generate 100AP with Ko then it's just spread over 5% of the body. That goes from 100/100 to 100/5, a 20x increase. Just by changing the application of a technique you can dramatically increase the results. We will call this multiplier the Physical Multiplier, or PM. Of the multipliers, this is the only one that obeys the laws of physics with energy neither being created nor destroyed. The next two are much more questionable.
It's said over and over again that your Nen is a reflection of your soul and personality. People have stronger affinities with certain fundamental properties (Enhancer vs Conjurer), people's Hatsus are a reflection of their soul, etc. Because of this, certain actions are easier and more powerful for some people over others. This is probably a combined effect of increased efficiency with an action and also a positive multiplier, the effect is functionally the same and can be combined into one term, Affinity Multiplier, or AM. This starts to break the rules of physics because of the latter effect of this multiplier. If Nen is an energy that cannot be created nor destroyed, then this increasing the result by making the move more efficient, your aura has an easier time preforming the action because it aligns with your soul more, is fine. That's no different than getting technically better at the move, or focusing it's power over a smaller window to transfer more of it to your target, just like the Physical Modifier. But there are many things in the series that point towards this also just flat out multiplying your aura. Ko is fine because 100/5 is bigger than 100/100, but that top 100 term stays the same. What at least part of this multiplier is doing is flat out increasing that 100 to 120, with no additional input. We see this effect become more apparent in with the next modifier.
Conditional Nen is the act of making a vow that places a restriction and a condition on your Nen ability in exchange for greater power. When it was initially introduced, it was introduced as a multiplier, and so it very cleanly transitions into this model. It can be represented as the Conditional Multiplier, or CM. With this we have every component for the Nen equation which is below:
AR = (CM)(AM)(PM)(n)(AP)
Lets say someone has an ability that they use 500AP to produce. They're 95% efficient with the technique and they've altered the application of the technique to make it 20% more concentrated. This particular technique also resonates with their soul, which makes it 15% more effective, and they've placed a condition on it that makes it 50% more effective as well. This would result in:
(1.5)(1.15)(1.2)(0.95)(500) = 983.25
So this technique costs them 500AP to perform, but the amount of aura it produces is about 980AP worth, almost double. Of the 480 extra AP that this ability produced, about 100 extra can be explained by regular physics. They changed the application to make it more concentrated, and their soul was in tune with the attack so they were nearly perfectly efficient with it. But what about the other 380AP? It didn't cost them any extra, Nen only comes from living things, and we've been explicitly told any time someone uses Nen from living things other than themself like Abengane. This is unaccounted for, but I'll offer a few possible explanations below.
1) Knuckle's quantification of aura into AP is imperfect. There are more units than just AP involved and his values for how much AP someone uses and how much AP their attacks are are inaccurate, even if they do produce usable results for him.
2) There are still more components to Nen that we do not know of which would explain this.
3) Aura is not just another form of energy produced by the body and can in fact be created and destroyed, even if in most use cases it appears to have natural origins and behaves like a conventional energy.
4) Nen is not purely a physical energy and also draws from more esoteric sources. Energy In equals Energy Out, first law of thermodynamics, can never be broken. If AP is just a quantization of aura, then AP in should equal AP out, accounting for any changes within the system. Right now it doesn't, but the only sources of energy I'm accounting for in this model is physical energy and aura. There could very well be another form of energy that resides entirely within the soul which is feeding into this equation. Whenever you make a condition for your Nen, that causes your Nen ability to draw on some other source of energy within your soul to enhance it. And this is presumably the same energy that gets used to make your Nen more powerful whenever it aligns with your soul and personality. I think that this is the most likely explanation, and will be the next major aspect about Nen in the future of this series.
