game-theory

# Game Theory for Crypto Strategic analysis framework for understanding and designing incentive systems in web3. > "Every protocol is a game. Every token is an incentive. Every user is a player. Understand the rules, or become the played." ## When to Use This Skill - Analyzing tokenomics for exploits or misaligned incentives - Evaluating governance proposals and voting mechanisms - Understanding MEV and adversarial transaction ordering - Designing auction mechanisms (NFT drops, token sales, liquidations) - Predicting how rational actors will behave in a system - Identifying attack vectors in DeFi protocols - Modeling liquidity provision strategies - Assessing protocol sustainability ## Core Framework ### The Five Questions For any protocol or mechanism, ask: 1. **Who are the players?** (Users, LPs, validators, searchers, governance token holders) 2. **What are their strategies?** (Actions available to each player) 3. **What are the payoffs?** (How does each outcome affect each player?) 4. **What information do they have?** (Complete, incomplete, asymmetric?) 5. **What's the equilibrium?** (Where do rational actors end up?) ### Analysis Template ```markdown ## Protocol: [Name] ### Players - Player A: [Role, objectives, constraints] - Player B: [Role, objectives, constraints] - ... ### Strategy Space - Player A can: [List possible actions] - Player B can: [List possible actions] ### Payoff Structure - If (A does X, B does Y): A gets [payoff], B gets [payoff] - ... ...