Wow, amazing proposal ser. This is a far more advanced version of my thread. What I like about it is, first of all, it’s a lot more gamified than my idea (and a lot more fun) and secondly, it allows for much more fine tuning on the economic side through the recipes and Aalloy ratio.
A big issue I see with this though is it seems you’re allowing new copies of existing wearables to forged. I don’t think this is fair given those items are supposed to be fixed supply, if you start increasing the supply of Mudgen Diamonds or Link Cubes I think they’ll be riots 
Therefore the forgable wearables need to be new items only imo and also have fixed supply so once they’ve all been forged they’re no longer available. This also incentivises a race to forge which will be interesting.
I believe the ratio has to be a lot higher than 1. In my idea I went with 2 which is a little high but if it’s closer to 1 what you will find is they’ll be a huge power creep towards the better items (single-trait items and items in the best 2-trait set items). For an example in myth items, if you only have to burn 1.1 myths + alchemica to forge another of your choice what you’ll find is nearly all the Red Hawaiian Shirts and Jordan Suits will be burnt and the market will be flooded with better wearables. It’s slightly deflationary but introduces a huge power creep. In general, the power to choose a specific wearable is incredibly powerful and should come at a huge cost and and be far more deflationary than 1.1. The alternative is to not allow a choice of wearable to be forged and you get a random wearable from a pool. This does mean that the pools of wearables work better if they’re sets as then they’ll all be desirable even if one item in that set is of much higher value than the rest.
My final concern is just around complexity, we badly need new alchemica sinks now and my feeling is this is months of work. If this idea here is v1, is there some less complex version we can create before that still tests out the economic levers but doesn’t require months of work? Or rather, is there a halfway house between my idea and yours that could be done outside the gotchiverse for now and integrated into the game later? This way we could do all the building on the DAO side and all PC has to do is supply the wearables.