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A self-improving AI citation market is an autonomous economic system where AI agents pay creators in USDC nanopayments for knowledge sources used in answers, with the market itself identifying knowledge gaps and funding their resolution without human intervention. It works through: (1) **Pay-per-citation mechanics** — agents execute x402 payments via Circle Gateway, settling sub-cent values on Arc with sub-second finality and SHA-256 receipt hashes; (2) **Spend policy enforcement** — agents operate under bounded mandates with enforceable spend controls, visible receipts, and on-chain audit trails; (3) **Autonomous gap detection** — a cron agent analyzes citation rates by topic, clusters underserved knowledge areas, and automatically posts USDC bounties to fill them; (4) **Knowledge compounding** — winning bounty answers are registered as citable sources, creating a feedback loop where the market funds its own blind spots and grows its own knowledge base. The system is self-improving because each gap-filling bounty expands the citation surface, which reduces future gaps, which reduces future bounty costs, creating a compounding knowledge economy.