Quadratic Funding

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= "Quadratic Funding is the mathematically optimal way to fund public goods in a democratic community". [1]


Definition

" matching pool is raised, and then a crowdfund campaign is matched according to the QF algorithm:

Number of contributors matters more than amount funded.

This pushes power to the edges, away from whales & other central power brokers.

This creates more democracy in public goods funding decisions!"

(https://wtfisqf.com/?grant=&grant=&grant=&grant=&match=1000)


Description

BlockScience:

"Quadratic Voting captured the hearts of the web3 space after being re-introduced by the Radical xChange movement. Gitcoin builds on the same principle by leveraging a powerful algorithmic policy called Quadratic Funding (QF) to allocate sponsor funds via matching community donations to grants submitted through the Gitcoin Grants program. The purpose of this form of grant matching is to allocate sponsor funding via a community preference signal by capturing not just the depth of donations ($ amount donated), but also the breadth of the donation base (# people who donated). The outcome is that grants that are supported by many people with small donations would receive relatively larger matching than grants supported by few donations of larger amounts. In effect, Quadratic Funding aims to boost the influence of people over plutocracy.

The Quadratic Funding mechanism is one example of a resource allocation strategy derived from convex optimization, with the aim to improve the community signal of which projects receive supporting funds by tuning the network sensitivity more towards human influence (# of people donating) over monetary influence ($ amounts donated). "

(https://medium.com/block-science/towards-computer-aided-governance-of-gitcoin-grants-730de7bcdbef)

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