Capital Allocation Pattern Language
= Pattern Language in Capital Allocation. Benjamin Life.
URL = https://research.allo.capital/t/capital-allocation-pattern-language-and-allocator-archetypes/277 Google Doc
Description
1.
"The basic thinking behind the purpose of this framework is to map the pain points of various allocators onto mechanism components so we can more easily spin up bespoke mechanisms for clients. Additionally, we want to position ourselves as category creators and thought leaders. This design philosophy and framework should support builders in designing better mechanisms by stacking different components as well as create a more well structured design space overall."
2.
"This pattern language structures capital allocation into three core components: Allocators (Who allocates capital?), Allocations (How is capital distributed?), and Signals (How are allocation decisions made?). It provides decision models, funding mechanisms, and verification methods for funders to optimize capital flow based on different needs."
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Characteristics
"Allocators can be Crowdsourced (e.g., Quadratic Funding), Algorithmic (e.g., AutoPGF), Market-Driven (e.g., Harberger Taxes), or Hybrid (e.g., Investment DAOs).
Allocations can be Preemptive (before work, e.g., participatory budgeting), Ongoing (continuous, e.g., streaming payments), or Retroactive (after work, e.g., RetroPGF).
Signals guxide funding decisions through Reputation-Based (e.g., Conviction Voting), Data-Driven (e.g., Hypercerts), or Condition-Based Triggers (e.g., climate oracles).
Decision trees help address common funding pain points like low engagement, misallocation, liquidity instability, and trust issues. Use cases include Quadratic Funding, Tunable Quadratic Funding, AutoPGF, and RetroPGF, each mapped to the framework."
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More information
URL = https://www.youtube.com/watch?v=k0Zz9cW9Esw
03:52 What is Pattern Language
09:25 Pattern Language in Capital Allocation
12:03 How Do Investors Identify and Use These Patterns?