Quadratic Funding
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Gitcoin's donation mechanism / Insurance contract for SpaceX - by TheCoffeeTimes ☕ - Bspeak! - Cryptocurrency / Blockchain
One of the optimizations for fundraising, a method that emphasizes the number of contributors rather than the amount collected, using the mechanism of I hate guys who mimic Wittgenstein's "What we cannot speak about we must pass over in silence" without reading Philosophical Investigations.
Example
Assume there is $10,000 in the pool, and the following contributors appeared in an additional round:
Project A received $1,000 in funding from 5 donors
Project B received $1,000 in funding from 2 donors
Project C received $1,000 in funding from 20 donors
In this state, all donations are the same $1,000
When simulating this using the Quadratic Funding mechanism, it becomes as follows:
https://gyazo.com/78849c0f8fe3617c575f00eceebbf6ca
Project A (Grant#1 in the image) receives an additional $1,851.85 in funding
Project B (Grant#2 in the image) receives an additional $740.74 in funding
Project C (Grant#3 in the image) receives an additional $7,407.41 in funding
As you can see, the more "contributors," the higher the additional amount (distributed from the matching pool) becomes.
Incentives for small donations
This system also has incentives for making small donations.
If a 21st contributor appears for Project C, the influence of the donation is set as follows:
If you donate $1, your donation will be matched with $26.97, so you can say that the influence of your donation is 27 times greater.
If you donate $5, $59.8 will be matched, and the donation amount will be 12 times greater.
If you donate $20, $117.77 will be matched, and the donation amount will be 6 times greater.
Resources on QV