Ethereum-based Quadratic Funding Of Public Commodities

Year 2022, Volume: 11 Issue: 3, 1 - 12, 30.09.2022

Dhairya Shah Srikant Kamath Smeet Ramani Aruna Gawade

Abstract

Crowdfunding is a process of generating funds by receiving small chunks of money from public by showcasing the project any creator desires to execute. Donation based crowdfunding is a popular fundraising technique where contributions made by the public are labeled as donations without any rewards in return. Match funding is an extension of the crowdfunding mechanism but with the involvement of a rich individual/organization willing to match ‘x’ amount from the donations made by the general public. But, the problem of fundraising for project through such means is that there is an inconsistent & non-transparent exchange of information about a project at regular intervals among creator and its contributors. The current system also lacks in focusing towards the desired area of interest of the contributors. Therefore, it’s needed to improvise this flaw of the current crowdfunding scenario. This paper proposes a system which aims to give more importance to contributor & his/her contribution by using their donation amounts to identify the match amount for a project & it also involves contributors in the decision-making process for projects thereby creating a decentralized governance. The proposed system incorporates the benefits of crowdfunding & match funding along with the utilization of a concept called Quadratic Funding for calculating project’s final disbursement amount. The given system focuses only on the donation-based mechanism for funding public goods i.e., the goods which are vastly beneficial to the general public and are non-rivalrous and non-excludable in nature. The system is implemented using the blockchain technology.

Keywords

Blockchain, Crowdfunding, Public Goods, Quadratic Funding, Weighted Averaging, Ethereum

References

• Miraz, Mahdi & Ali, Maaruf. (2018). Applications of Blockchain Technology beyond Cryptocurrency. Annals of Emerging Technologies in Computing (AETiC). 10.33166/AETiC.2018.01.001
• Metcalfe W. (2020) Ethereum, Smart Contracts, DApps. In: Yano M., Dai C., Masuda K., Kishimoto Y. (eds) Blockchain and Crypto Currency. Economics, Law, and Institutions in Asia Pacific. Springer, Singapore. https://doi.org/10.1007/978-981-15-3376-1_5
• Gebert, Michael. (2017). Application Of Blockchain Technology In Crowdfunding. New European.
• Benila, S & Ajay, V & Hrishikesh, K & Karthick, R. (2019). Crowd Funding using Blockchain. GRD Journals- Global Research and Development Journal for Engineering. Vol. 4, Issue 4, March 2019,. ISSN: 2455-5703
• Saadat, Md Nazmus & Halim, Syed Abdul & Osman, Rasheed & Nassr, Mohammad & Zuhairi, Megat. (2019). Blockchain Based Crowdfunding Systems. Vol. 15, No. 1, July 2019, DOI: 10.11591/ijeecs.v15.i1.pp409-413
• Pasquini, Ricardo, Quadratic Funding under Limited Matching Funds: Evidence from Gitcoin (September 30, 2020). Available at SSRN: http://dx.doi.org/10.2139/ssrn.3702318
• Senabre, Enric & Morell, Mayo. (2018). Match-Funding as a Formula for Crowdfunding: A Case Study on the Goteo.org Platform. 1-5. 10.1145/3233391.3233967.
• Buterin, Vitalik, Zoë Hitzig, and Eric Glen Weyl. 2018. “Liberal Radicalism: Formal Rules for a Society Neutral Among Communities.” SSRN ElectronicJournal. https://doi.org/10.2139/ssrn.3243656.
• Sudharsan. B, R. T. V, N. Krishna M P, B. R. J, S. Arvindh M and D. M. Alagappan, "Secured Electronic Voting System Using the Concepts of Blockchain," 2019 IEEE 10th Annual Information Technology, Electronics and Mobile Communication Conference (IEMCON), 2019, pp. 0675-0681, doi: 10.1109/IEMCON.2019.8936310.
• Anomaly J. Public goods and government action. Politics, Philosophy & Economics. 2015;14(2):109-128. doi:10.1177/1470594X13505414.
• Zbigniew Michalewicz, Martin Schmidt, Matthew Michalewicz, Constantin Chiriac. (2006). Adaptive Business Intelligence. Springer-Verlag Berlin Heidelberg. https://doi.org/10.1007/978-3-540-32929-9.
• Brusovansky, M., Glickman, M. & Usher, M. (2018). Fast and effective: Intuitive processes in complex decisions. Psychon Bull Rev 25, 1542–1548. https://doi.org/10.3758/s13423-018-1474-1.
• Iqbal, Mubashar & Matulevičius, Raimundas. (2021). Exploring Sybil and Double-Spending Risks in Blockchain Systems. IEEE Access. PP. 1-1. 10.1109/ACCESS.2021.3081998.