Economic Model Overview
Spawn's economic model is designed around a core alignment problem: how do you build a platform where the incentives of participants, spawners, and the platform itself all point in the same direction? The answer is to tie platform economics to the quality and durability of market outcomes, not to raw transaction volume.
How Value Flows Through the Lifecycle
Spawn's economics operate in three distinct phases, each building on the previous:
Bonding curve phase - price discovery generates fees. As participants buy and sell during the bonding curve phase, trading fees are generated and accounted separately, feeding into the graduation event.
Graduation - liquidity is seeded from accumulated value. At graduation, a portion of the value accumulated during the bonding curve phase is used to seed the on-chain liquidity pool. This gives the post-graduation market its starting depth, and means a stronger bonding curve phase produces a stronger post-graduation market.
Post-graduation - a 1% trading fee funds automatic buy and burn. After graduation, trades on the on-chain market carry a 1% fee. Rather than flowing to Spawn or to fee recipients, this is deployed automatically to buy back the token from the open market and remove it from supply. The effect compounds over time: every trade makes the token's liquidity position slightly stronger and its supply slightly smaller. Token health improves with activity rather than degrading.
The Design Goals
| Goal | How the Model Addresses It |
|---|---|
| Align spawner incentives with community | Optional first buy puts spawners in the same position as community participants from the first transaction |
| Benefit the token over time | Post-graduation 1% fee funds automatic buy and burn - trading activity strengthens the token |
| Reduce extraction-first behavior | MEV and bundling removal means fees reflect genuine trading, not extraction |
| Make on-chain permanence meaningful | 30 ETH FDV graduation threshold ties deployment to demonstrated demand |
Why This Matters
Economic models that reward extraction create a race to the extraction layer. Economic models that reward sustained conviction create a race to build real communities. Spawn's model is designed for the latter - not because it's more ethical, but because it produces better markets.