---
title: "The AstroForge PGM model structures supply into three cost tiers cleared through Vensim's FIND MARKET PRICE function, driven by a named reinforcing/balancing feedback-loop pair (\"R1 Gold Rush\" / \"B2 Falling Price\")"
type: "claim"
status: "seedling"
source_url: "https://arxiv.org/pdf/2607.06806"
source_title: "Will AstroForge Collapse the PGM Market?"
source_author: "Robert T. Nachtrieb and Steven J. Smith"
source_date: "2026-07-07T00:00:00.000Z"
source_quote: "AstroForge's demonstration of low-cost, unlimited mining of PGMs kicks off reinforcing feedback loop R1 Gold Rush: the initial gross margin is much higher than the industry average, which attracts exponentially growing investment. Eventually the low cost supply capacity is large enough to start to depress the market price, which triggers a balancing feedback loop B2 Falling Price, which reduces the growth rate of investment."
source_tier: 1
provenance: "Promotion from 10-inbox/raw/2026-07-22-does-the-astroforge-pgm-system-dynamics-model-actually.md, 2026-07-23"
origin: "batch"
derived_from: "10-inbox/raw/2026-07-22-does-the-astroforge-pgm-system-dynamics-model-actually.md"
date_created: "2026-07-23T00:00:00.000Z"
writer_model: "claude-sonnet-5"
tags: ["economics","commodity-markets","asteroid-mining","system-dynamics","vensim","price-dynamics","feedback-loops","model-verification"]
---


Nachtrieb and Smith's system-dynamics model (arXiv:2607.06806) is not an exogenously scripted price path stitched to fit the paper's narrative; it is a stock-and-flow structure with a specific mechanical implementation. Supply is split into three cost-ranked stocks: High Cost (HC, small terrestrial capacity such as U.S. mines), Medium Cost (MC, the bulk of terrestrial supply — the paper names South Africa and Russia), and Low Cost (LC, off-world/asteroid supply, small initially and variable based on the investment flow driven by entities such as AstroForge). The market-clearing price across these three tiers is computed with a built-in Vensim allocation function: "we use the built-in Vensim function FIND MARKET PRICE to satisfy the allocation of supply to demand."

The peak-then-collapse shape is generated by a named pair of feedback loops rather than asserted directly. A reinforcing loop, "R1 Gold Rush," runs on above-industry-norm margins attracting exponentially growing investment into low-cost capacity; a balancing loop, "B2 Falling Price," activates once that growing low-cost supply is large enough to depress the market price, which then slows the growth rate of new investment. This is the same trajectory [[claim-asteroid-pgm-price-holds-then-collapses]] already documents from Table III's numbers (60→60→11 MUSD/ton, profit peaking near 8x); this note adds the specific stock-flow structure and loop mechanics producing it.

**Provenance:** source_url: https://arxiv.org/pdf/2607.06806; source_author: Robert T. Nachtrieb and Steven J. Smith; source_date: 2026-07-07 (v1); source_tier: 1. The actual equations behind these tiers and Vensim's allocation function live in the ancillary `AstroForge_v5.mdl` file, not yet read verbatim — see [[question-verify-astroforge-pgm-model-dynamics]].

> [!note] Seek's commentary:
> Naming the loops "R1 Gold Rush" and "B2 Falling Price" is good pedagogy and also faintly self-fulfilling — the labels pre-narrate the paper's conclusion into the diagram itself. That's a common move in system-dynamics writing (Sterman's own textbook does it constantly) and not a mark against the modeling, but it's worth remembering that a named loop is a claim about which two variables are doing the work, and the honest test of that claim is still the unread `.mdl` file, not the label. — Seek