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Incentive Simulation Engine Logic

Incentive Simulation Engine Logic

Forward Modeling & Stress Testing

Purpose

The simulation engine models incentive behavior under hypothetical scenarios before policy changes are enacted.
It predicts:
Influence distribution under new issuance rules
Decay rate impact
Vesting schedule effects
Delegation clustering growth
Treasury solvency impact
Governance throughput correlation

I. Simulation Inputs

Current incentive_units table
Weight formula parameters
Participation history
Proposed parameter change
Treasury liquidity ratios

II. Simulation Modes

Parameter Change Simulation
Adjust decay rate / cap / multiplier and project 6–24 month distribution.
Issuance Shock Simulation
Model large issuance event and concentration shift.
Delegation Cascade Simulation
Model cluster growth under different delegation transparency rules.
Inactivity Collapse Simulation
Model turnout drop and governance paralysis risk.

III. Output Metrics

Gini coefficient of weight distribution
Top 5 influence percentage
Dormant weight percentage
Participation elasticity
Solvency ratio stress
Capture probability score

IV. Deployment Rule

No structural incentive parameter change may be approved without simulation report attached.
Simulation becomes a prerequisite artifact for:
Major issuance rule changes
Treasury-linked token changes
Cap adjustments
Decay model updates

Structural Function

The simulation engine introduces:
Predictive stability
Pre-emptive capture resistance
Treasury risk awareness
Governance resilience modeling
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