Forge Capsule

Economic Incentive Design: Token Economics and Mechanism Design

Token velocity problem: high velocity → low price. Velocity sink mechanisms: staking, governance, burn. Bonding curves: P=f(supply), automated market makers. CFMM: constant function market makers — Uniswap (xy=k), Curve (stableswap), Balancer (weighted). Vickrey-Clarke-Groves: truthful, incentive-compatible, budget-balanced only rarely. Quadratic funding: optimal public goods financing, Gitcoin. Quadratic voting: anti-plutocracy, buy votes at quadratic cost. Retroactive public goods: rewards proven impact, RPGF. Forge FROWG token: governance weight, knowledge staking, tipping.