INFOGRAPHIC -Quadratic Funding - What? So What? Now What?
What the heck is QF?
"Quadratic Funding is the mathematically optimal way to fund public goods in a democratic community” (Gitcoin, 2023). It is an innovative matching funds mechanism that places a greater value on the total number of unique individuals supporting a project, rather than the total funding the project receives. In a QF round, individuals "vote" for their favorite projects by making donations to them, signaling to the QF algorithm which projects they feel should receive the most matching funds. In essence, more community support = more matching funds.
Why does QF Matter?
QF amplifies the impact of smaller donors, giving them a greater say in how community funds are distributed. In a traditional 1:1 matching scheme, projects receive $1 in matching funds for each $1 donated, allowing wealthier donors to have a disproportionate influence in determining how matching funds are allocated. The algorithm behind QF, on the other hand, ensures projects with the most widespread community support get the matching funds they deserve.
What’s next for QF?
Several projects are already leveraging the power of QF to support public goods funding, including Gitcoin, Endaoment, and Giveth. In the future, you may see QF being used in a variety of contexts including charitable fundraising campaigns, start-up fundraising contests, pitch competitions, crowdfunding platforms, and even participatory budgeting! It is only the beginning for Quadratic Funding, and the future looks bright!
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