Quadratic Funding
Quadratic Funding: Democratic Resource Allocation
Quadratic funding uses mathematical formulas to allocate resources based on community preferences while preventing wealthy individuals from dominating funding decisions. It's democracy with math.
Quadratic funding is a mechanism for allocating resources that gives more weight to the number of contributors than the amount contributed, using quadratic formulas to prevent wealthy individuals from overwhelming community preferences. Small donations are amplified to match community interest.
How Quadratic Funding Works
Contribution matching uses mathematical formulas where the funding amount increases based on the square root of contributions rather than linear amounts.
Community signal amplification means projects with many small supporters receive more total funding than those with fewer large contributors.
Sybil resistance requires identity verification to prevent individuals from gaming the system through multiple fake accounts.
[IMAGE: Quadratic funding formula showing how multiple small contributions generate larger matching funds than single large contributions]
Real-World Examples
- Gitcoin Grants uses quadratic funding to allocate millions in cryptocurrency public goods funding
- CLR.fund provides quadratic funding infrastructure for community resource allocation
- Government experiments in Taiwan and other jurisdictions testing quadratic voting for budget allocation
Why Beginners Should Care
Democratic funding enables communities to direct resources toward projects they value without being overwhelmed by wealthy donors.
Public goods support through quadratic funding helps maintain open-source software, research, and infrastructure that benefits everyone.
Participation incentives make small contributions meaningful and impactful rather than insignificant compared to large donations.
Related Terms: Public Goods, Community Governance, Sybil Attack, Resource Allocation