Economic Model & Incentive Alignment
Core Design Goal
The economic model of Benchmark X is designed to enforce one principle:
Good strategies should compound advantage. Bad strategies should decay naturally.
No manual curation. No whitelists. No subjective trust.
Actors in the System
From an economic perspective, Benchmark X has four primary actors:
Strategy Developers
Reputation Stakers
System Users (API / Evaluators / Enterprises)
Protocol Infrastructure (Treasury)
Each actor interacts with the system differently and is incentivized differently.
Where Value Comes From (Sources)
Benchmark X only generates value from actual system usage.
Primary value sources:
Benchmark execution (Battle Rooms)
Compute consumption
Data access (historical + live metrics)
Strategy marketplace activity
Enterprise / API usage
On-demand evaluation jobs
No inflation-based rewards. No fake volume.
If no one uses the system → no rewards are generated.
Cost Flow (Who Pays)
From a system flow perspective:
Users pay T1 to consume compute and evaluation
Battle Rooms consume compute + execution resources
Marketplace actions generate fees
API calls burn or charge credits
This creates a real cost floor for participation.
Reward Pool Formation
All collected fees are aggregated into a reward pool.
This pool is then distributed according to fixed rules.
No discretionary allocation. No retroactive changes.
Reward Distribution Logic
The reward pool is split across three buckets:
1. Strategy Performance Rewards
Allocated to strategy developers based on:
BX Score ranking
Reputation-weighted participation
Consistency over time
Important:
Rewards are non-binary
There is no single “winner”
Multiple strategies can earn simultaneously
This avoids “winner-takes-all” dynamics.
2. Reputation Staker Rewards
Reputation stakers earn rewards for:
Providing trust collateral
Absorbing slashing risk
Supporting system integrity
From a system standpoint:
Stakers underwrite the benchmark
They get paid for taking that risk
If strategies misbehave → stakers lose first.
3. Protocol Treasury
Treasury allocation funds:
Infrastructure costs
Security research
Long-term maintenance
Ecosystem expansion
This ensures the system can survive without external funding loops.
Incentive Alignment by Design
The model ensures that:
Strategy devs want stable performance
Stakers want low-risk, high-quality strategies
Users want credible benchmarks
The protocol wants sustained usage
No actor benefits from:
Excessive risk
Manipulation
Short-term farming
Fake performance
Negative Feedback Loops (Very Important)
The system includes automatic negative feedback:
High risk → higher slashing probability
Inconsistent behavior → reputation decay
Poor performance → lower visibility
Low visibility → less opportunity to earn
This ensures that instability is self-punishing.
Positive Feedback Loops (Controlled)
Positive feedback exists, but is capped:
Good performance → higher reputation
Higher reputation → more Battle Room access
More access → more data → more rewards
Caps prevent runaway dominance:
Reputation decay
Participation limits
Weight normalization in scoring
No strategy can “lock in” permanent advantage.
Economic Failure Modes (Explicitly Considered)
The system is designed to avoid:
Infinite leverage farming
Sybil strategy spawning
Reputation recycling
Zero-cost spam strategies
Governance capture via yield
If a failure mode appears, it must be solvable by:
Adjusting weights
Tightening constraints
Updating slashing rules
Without changing the core architecture.
Mental Model for Developers
If you’re building on or inside Benchmark X:
T1 is a cost
T2 is a risk
T3 is an outcome
If you try to shortcut any of them, the system pushes back.
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