Quadratic Funding is a financial mechanism designed to incentivize the support of public goods by amplifying contributions from a larger number of people. It uses a square-root formula to match contributions, ensuring that projects with broader support receive more funding.
It addresses the issue of underfunding public goods by ensuring that projects with broader support receive more funding, as opposed to those funded only by a few wealthy contributors. This mechanism aims to democratize funding and encourage wider community engagement in decision-making processes.
Contributors can donate any amount they choose, and their contribution is matched up to a certain limit based on the square root of the total number of contributors. This means that each additional contributor increases the matching funds available for all projects proportionally, encouraging participation from many people rather than relying solely on large donors.
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