[HN Gopher] Why quadratic funding is not optimal
___________________________________________________________________
Why quadratic funding is not optimal
Author : jwarden
Score : 88 points
Date : 2025-06-09 14:33 UTC (8 hours ago)
(HTM) web link (jonathanwarden.com)
(TXT) w3m dump (jonathanwarden.com)
| cleak wrote:
| This looks interesting, but I have no idea what I'm looking at
| with the original paper. Could someone provide a simple summary
| that doesn't rely on knowledge of Quadratic Voting?
| bts wrote:
| Quadratic Voting and Quadratic Funding have some ideas in
| common, but they refer to separate concepts. To learn more
| about these topics, I would probably check out the website for
| RadicalxChange. IIUC RxC is the main public body attempting to
| realize the theoretical benefits of QF and related ideas.
|
| Here's an explanation of Quadratic Funding from their
| website[1], which I guess they now refer to as "Plural
| Funding": Plural Funding (also known as
| Quadratic Funding or QF) is a more democratic and scalable form
| of matching funding for public goods, i.e. any projects
| valuable to large groups of people and accessible to the
| general public. "Matching funding" is a model of
| funding public goods where a fund from governments or
| philanthropic institutions matches individual contributions to
| a project. Plural Funding optimizes matching funds by
| prioritizing projects based on the number of people who
| contributed. This way, funds meant to benefit the public go
| towards projects that really benefit a broad public, instead of
| things that only have a few wealthy backers. In Plural Funding,
| [total funding] for a proposal is [the square root of each
| contribution to it - summed up, then squared.] Plural Funding
| strongly encourages people to make contributions, no matter how
| small, and ensures a democratic allocation of funds meant to
| benefit the public.
|
| [1] https://www.radicalxchange.org/wiki/plural-funding/
|
| EDIT: formatting
| jppittma wrote:
| So I make 1,000,000 separate donations in the amount of
| $0.01?
| jwarden wrote:
| Total funding in this case would be: (sqrt(.01) *
| 1000000)^2 = 10 trillion dollars.
| nightpool wrote:
| (10 billion, surely?)
| jwarden wrote:
| Oh right: (sqrt(.01) * 1000000)^2 = 1.0e10
| timerol wrote:
| Both QF and QV rely on verifying identity, so that would be
| counted as one donation of $10,000. The entire point is
| letting numbers of people balance in some way against
| amounts of money, so allowing one person to count multiple
| times breaks the system
| sokoloff wrote:
| I used to think the employer drives to contribute to the
| company's preferred charity were bad before QF; they're
| bound to get a lot worse with it, giving power to
| employers with lots of employees and a willingness to
| _encourage_ them to donate as little as a penny.
| jppittma wrote:
| So I have to give it out and have people donate it on my
| behalf?
| jwarden wrote:
| Here's a very brief summary of what Quadratic Funding is (which
| is distinct from Quadratic Voting):
|
| Quadratic Funding is a mechanism where individuals voluntarily
| contribute funds for some public good (e.g. an open source
| software project), and then these are matched such that the
| total funding amount is equal to the square of the sum of the
| square roots of the individual contributions. Under certain
| assumptions, this formula results in an optimal outcome, where
| each individual contributes an amount that maximizes their
| individual utility (given what others are contributing), and
| total utility for society is also maximized.
| jovial_cavalier wrote:
| a more plain-english explanation from Vitalik's blog:
|
| https://vitalik.eth.limo/general/2019/12/07/quadratic.html
| gowld wrote:
| Better to learn about Quadratic Voting, and ignore the magical
| thinking of Quadratic Voting.
| jovial_cavalier wrote:
| I had always interpreted quadratic funding as being a tax rather
| than a subsidy. You donate $100 and the cause receives $100, then
| your next marginal $100 is discounted quadratically, and the
| government receives the difference. I think that just straight up
| resolves the first two issues.
| sokoloff wrote:
| I think that very quickly just changes the forms of donation to
| be "something that doesn't count as a donation" (buying tickets
| to an event or even just straight up NFTs).
|
| As soon as the quadratic decrease is more than my marginal tax
| rate, I'm better off buying an NFT from the cause I want to
| support than making a donation.
| efitz wrote:
| It sounds like a kooky idea and neglects the fact that "the
| government" isn't some magical source of money; it got that money
| from its citizens somehow (taxes or inflation).
|
| It's a much simpler idea to just have citizens vote for what they
| want their tax money spent on, by voting for candidates who will
| represent their interests.
| taeric wrote:
| Government can also get money through bonds, though? And
| government spending of these funds can be argued to go much
| more directly to economic growth for the region than most any
| other spending.
|
| Note that I don't really disagree with your second. Just
| pointing out that your two options for how government got money
| is not complete.
| sokoloff wrote:
| Bonds are an exchange of cash now for more cash later in the
| other direction. Eventually, that "cash later" is taxed or
| inflated away (printed), so it's a difference in timing more
| than category.
| taeric wrote:
| Fair. Still largely a different form getting cash now,
| though? Particularly if you account for the fact that
| governments can go belly up.
| daedrdev wrote:
| In the long run, all government debt is going to be future
| taxes. There are many programs that the government spends on
| that are efficient and produce more growth than the taxes
| collected would have, and there are many that don't and
| produce less growth than leaving the money in the hands of
| the taxed. Sometimes this is due to government inefficiency,
| and sometimes because we decided it's what we want, like
| medicare for elderly who will never return the investment
| into their health.
| taeric wrote:
| I'm pretty heavy against "efficient" as a goal to look for
| in government spending. In particular, the first spend on
| anything will never be as efficient as later spending. That
| just isn't how it works. So, if you are trying to seed
| something with government spend, expect some
| inefficiencies.
| gowld wrote:
| Sure, government spending is not purely an investment in
| future tax. Goverment is not purely a financial investment
| vehicle.
|
| This is so obvious as to barely merit acknowledgement.
| __MatrixMan__ wrote:
| That's only true if you assume that governments last
| forever. They sometimes die with debt and their financiers
| take losses.
| jwarden wrote:
| Yep. QF basically assumes that subsidies are "free money", as
| discussed in the article:
|
| https://jonathanwarden.com/quadratic-funding-is-not-optimal/...
|
| In the original paper, the authors acknowledge this is a
| problem: "...once we account for the deficit, the QF mechanism
| does not yield efficiency.
| patcon wrote:
| > It's a much simpler idea to just have citizens vote for what
| they want their tax money spent on, by voting for candidates
| who will represent their interests.
|
| I think your comment is operating under the assumption that the
| "folk theory of democracy" works:
| https://en.wikipedia.org/wiki/Folk_theory_of_democracy
|
| It's a term from "Democracy for Realists", written by some
| democratic theorists. They disassembled the argument for it in
| the first half of chapter 1, and then spent the rest of the
| book refuting pretty much all the other competing academic
| theories that _other_ democratic theorists actually believe in
| (scholars of democracy absolutely do not believe in the folk
| theory).
|
| EDIT: Which is just to say that we need to improve the
| incentive structures (which QF takes a stab at doing, though
| there are other approaches). We need these experiments because
| we need to learn what actually works -- the old theories never
| actually did, and the prior assumptions that made this
| disconnect negligible are starting to fail.
| gowld wrote:
| I never heard of "quadratic funding" before today, but I did
| know about "quadtratic voting". Is "quadtratic funding" just a
| spin on "quadtratic voting" that makes a complete hash of
| everything?
| __MatrixMan__ wrote:
| I realize that no government today operates by spending money
| into existence with one hand and taxing it out of existence
| with the other, but I always assumed that QF was designed for
| use with that kind of system (likely a DAO responding to voters
| on some general purpose chain like Ethereum).
|
| Why else would you dream up such a scheme except for the
| purpose of replacing the one we're using (e.g. the one where
| the scarcity of money is determined by bankers' willingness to
| issue loans)? Perhaps the author is right that QF is not
| optimal, but what we're doing now does not care whether a
| funded venture helps or harms the people, so I'd say the bar to
| clear is pretty low.
| gs17 wrote:
| > Intuitively, this seems wrong: the art museum receives a far
| larger subsidy, yet many more people benefit from replacing the
| lead pipes, and the utility-per-individual is arguably much
| higher as well.
|
| Well, yes, but those many more people getting more utility didn't
| contribute. If the same contribution was spread out over 10x the
| people each contributing $10, they'd get 10x the funding.
|
| Their complaint here is really that ideal QF would also require
| assuming people actually get involved with it. I agree it has
| issues, but this isn't what I'd lead with. Coordination seems
| like a much larger threat to the concept.
| jwarden wrote:
| In the example in the article, many more people _did_
| contribute to the lead pipes (100 people vs. 10 for the art
| museum). And they still get only a fraction of the funding that
| the art museum gets.
|
| Agree, coordination is a larger threat to QF. But this issue
| has been discussed extensively. In this article I wanted to
| point out all the other assumptions behind QF and what happens
| when they don't hold.
| sokoloff wrote:
| But they got 99 shares of government contribution for each
| share they put up for a 100x multiplier while the art patrons
| got 9 shares of government contribution for a 10x multiplier.
|
| Setting aside the emotional content and looking only at the
| math, it's not at all obvious to me that the project with 100
| donors was somehow shorted.
| spencerflem wrote:
| Many people would consider fixing pipes a more important
| project despite the fact that the wealthy contributors
| could front a lot more cash for their pick.
| sokoloff wrote:
| Great. Now, suppose the 10 wealthy people are in favor of
| the pipes project and the 100 average people are in favor
| of an art museum.
|
| Is the art museum or the pipes project more important?
| spencerflem wrote:
| You're missing the point, which is that the group with a
| lot more money to start have their voices heard more.
|
| It matters _some_ that their multiplier is different ,
| but in absolute numbers its still more to the program
| that benefits fewer people. The "utility function" is
| not accurate because the wealthy's utility starts out
| with a massive advantage.
|
| So yes, I think it would still be unfair if you switched
| it given the poor majority genuinely would rather have
| art than lead free pipes.
|
| The problem is that their voices are counted less due to
| not starting with money.
|
| But regardless, that would be a silly thing to switch
| because that's not a situation that ever comes up, while
| the original framing is a genuine problem in our society
| right now.
| sokoloff wrote:
| Yes, money has utility. That should be unsurprising to
| everyone.
|
| This proposal's pairing of hypothetical projects levels
| the playing field by a factor of 10 versus the starting
| point. That seems like a pretty good improvement over the
| purely monetary starting point.
|
| If your objection is that government can't work this way,
| because some projects need to be done for the benefit of
| people who literally cannot even contribute so much as a
| penny, while other projects are optional, then I'll agree
| with you. It means that this funding mechanism is
| fundamentally flawed in regards to _required_ projects.
|
| But if you want to augment government spending with
| private contributions for certain public-private
| partnership projects, this might be a good way to
| allocate government matching funds for these _optional_
| projects.
|
| You can't treat a lead pipe replacement project as an
| optional project (the responsible government or utility
| just has to do it), but if you wanted to trade off funds
| towards a skate park versus towards an art museum, this
| process seems better than a straight matching funds
| percentage process.
|
| Or, if you want to have no partnership projects and use
| existing government mechanisms exclusively, that also
| avoids this problem.
| spencerflem wrote:
| The point is that its not socially optimal. The socially
| optimal solution would optimize global utility, as in it
| would not be influenced by the starting wealth of each
| person. If you allow starting wealth to influence things,
| their needs will be optimized for more at the expense of
| people who do not.
|
| Yes, that goes against the idea that "money has utility"
| but the point the article was making was that its not
| socially optimal anymore not that is regressive compared
| to whatever other strategy, like straight matching funds.
| There's no math claim that straight matching funds is
| optimal either.
|
| I think maybe we're speaking past eachother? Because yea
| totally I'd rather there be a multiplier based on the #
| of people than not given either that or a straight match.
| And your other options sound good too: "always fix non-
| optional things" and "do things democraticly (so 1 person
| 1 vote, not 1 dollar)"
|
| But the article is making a very specific point about a
| claim of QF being mathematically socially optimal that
| isn't being met.
| jwarden wrote:
| > levels the playing field by a factor of 10 versus the
| starting point.
|
| Let's say there were only 10 poor people that contributed
| to the pipes. The total funding would be $10,000 -- a
| subsidy of $9,000. So 10x multiplier both for the pipes
| and the art.
|
| Then let's also say that the marginal utility of $100 for
| a poor person is equivalent to the marginal utility of
| $1,000,000 for a rich person.
|
| So we have the same number of contributors for each
| project, but a much higher marginal utility-per-dollar
| for lead pipes. But the socially optimal funding would be
| at the point where the marginal utility-per-dollar are
| equal for both projects (per the Equimarginal Principle).
| sdenton4 wrote:
| A core problem of capitalism is that it only solves the
| problems of people with money... This is more of the same.
|
| Consider that any of those 100 people might have a kid who
| would be the next Einstein, if only they hadn't been lead-
| poisoned. But these hundred people also have rent to pay
| and food to buy, and can only set aside $100 to deal with
| the lead-pipes problem. The existing distribution of wealth
| is not a good measure of the importance of the problems
| that these different individuals are experiencing. And the
| existing distribution of wealth is thus not a great way to
| prioritize solving problems for maximum societal benefit.
| jwarden wrote:
| Yes good point. We'd have to actually flesh out the
| assumptions about marginal utility of wealth for low-income
| vs. the high-income group (as well as assumptions about
| individual utility functions), to demonstrate that this
| outcome was not optimal. I didn't do that in this article
| because it gets too mathy.
|
| However, the optimality of QF does assume wealth equality.
| When you drop that assumption and assume diminishing
| marginal utility of wealth, you can show that QF is not
| optimal.
|
| But I think you are right that the example in this article
| doesn't necessarily show that clearly. The example leans
| heavily on intuition (or emotional appeal). I think I will
| try to improve that section.
| gs17 wrote:
| But do we know the "ideal" funding values for the pipes and
| museum (and if we can, then why not use that)? It's only
| really "unfair" if we know that the pipes "deserve" a
| disproportionately larger multiplier. If the pipes deserve to
| be funded regardless of contributions (and they probably do),
| then the issue is using a system that could possibly fail to
| provide for them in the first place.
|
| It's not a good way to allocate funds, but I don't think it's
| a slam dunk to say it multiplied a larger group's money more
| than it did a smaller group's.
| jwarden wrote:
| Well it's also unfair if we assume large difference in the
| marginal utility of wealth -- for example to go to
| extremes, we might assume that a $10 contribution from a
| low-income individuals represents the same sacrifice as a
| $1,000,000 contribution from a high-income individual. If
| that were the case, a $100 contribution from a low-income
| individual represents 10x the utility of a $1,000,000
| contribution from a high-income individual. So in that case
| the lead would pipes have both more contributors, and
| higher utility per contributor, than the art. So total
| utility would be maximized by giving more money to the lead
| pipes.
| j2kun wrote:
| > for funding public goods--especially in the cryptocurrency
| space.
|
| Sounds like a contradiction to me. Nothing about cryptocurrency
| should be considered a public good, even if wealthy donors are
| struggling to efficiently donate money to its development.
| gbacon wrote:
| Regarding both perfect knowledge and equilibrium discovery,
| consider Hayek's work on what he called the knowledge problem,
| beginning with "The Use of Knowledge in Society." No person or
| entity possesses perfect knowledge of the current state, and no
| one has perfect knowledge of the follow-on simple or higher-order
| effects. Instead, apply the insight from public choice theory
| that state actors make self-interested choices. Cui bono?
|
| _I am far from denying that in our system equilibrium analysis
| has a useful function to perform. But when it comes to the point
| where it misleads some of our leading thinkers into believing
| that the situation which it describes has direct relevance to the
| solution of practical problems, it is time that we remember that
| it does not deal with the social process at all and that it is no
| more than a useful preliminary to the study of the main problem._
|
| https://www.kysq.org/docs/Hayek_45.pdf
| jwarden wrote:
| great quote
| bee_rider wrote:
| I wonder about this kind of article. It is a big list of
| problems, so it seems like we'll end up having a bunch of
| unrelated conversations here, which seems unfortunate.
|
| But, to start chipping away... For the wealth inequality section,
| I gather the goal is to let people provide a signal based on how
| much they are willing to spend. Shouldn't that be corrected for
| their wealth, because that shows how much they value the thing?
| If the art patrons are all 1B-aires, and the anti-lead-pipe folks
| are 100k-aires (just to make the math easier), we could do:
|
| Art:
|
| 10*(sqrt(1M/1B)^2) = 1/100
|
| Pipes:
|
| 100*(sqrt(100/100k)^2) = 1/10
|
| Now we've got some measure of everybody's preference, and can
| allocate the budget appropriately. Whatever the overall budgets
| is, 10x more for pipes than art seems... well, at least a lot
| closer to reasonable than ~100x more on art than pipes
| spencerflem wrote:
| You might also want to factor the relative marginal utility of
| a dollar.
|
| But yes, that part does seem solvable with a correction like
| that even if my preferred fix would be removing the
| billionaires ;)
| nkmnz wrote:
| I've never heard of the specific mechanism the article talks
| about, but it is so full of flaws that I do not consider it a
| good source of thought about the topic. Just the most obvious
| example where the author didn't put much effort into
| understanding their own text:
|
| > Three art patrons each contribute [money] to the local public
| art museum. [...] They each expect to experience [money] worth of
| individual utility from enjoying the [...] art.
|
| > [...] utility of saved lives is experienced only once by each
| of the cancer patients - the three contributors don't experience
| that utility (other than feeling good about those lives being
| saved, _but that's not the kind of utility we're trying to
| maximize_ ).
|
| This approach of intellectual unsoundness - i.e., accepting the
| social and individual utility of enjoying the arts, but denying
| any such utility for enjoying the saved lives - is present
| throughout the article. And I haven't started with the author
| comparing random cases of contributions that differ in multiple
| dimensions where using a _ceteris paribus_ approach would
| immediately show that his arguments are shallow...
| refulgentis wrote:
| I'm confused, aren't those _flaws the article is pointing out_
| , not _claims the article is making_?
| em-bee wrote:
| the article claims that a contributor to art benefits from
| enjoying the art and a contributor to cancer research doesn't
| (except for feeling good), and therefore quadratic funding
| would favor art contributions and disfavor cancer research
| contributions. GP claims (and i agree) that contributors to
| cancer research do benefit beyond feeling good. eg because
| they, or someone they care about might have or get cancer
| later and benefit from the research.
|
| the challenge is that measuring benefit is hard.
| zoogeny wrote:
| I read it as claims the article was making. I too was
| confused, but perhaps that is just the communication?
|
| I think the article was going for a comparison between
| extrinsic motivation (which they seem to claim the original
| quadratic funding requires) and intrinsic motivation. It
| seems they just chose a poor example. The article attempts to
| quantize the expected reward for the extrinsic motivation
| ("They each expect to experience EUR6,000,000 worth of
| individual utility") while it fails to quantize the expected
| reward for the intrinsic motivation ("But in the selfish
| scenario, total utility is 3 times higher, because the
| utility is experienced independently by each contributor,
| whereas utility of saved lives is experienced only once by
| each of the cancer patients).
|
| I believe, it has to do with their narrow conception of
| "experience". I don't know how any rational person could
| expect to "experience" EUR6,000,000 worth of art as my first
| criticism. Now, it would be fair to say that the
| _implication_ that the wealthy benefactors _expect_ that
| experience could be seen as a criticism of quadratic funding.
| But to roll with that ludicrous expectation for the sake of
| argument and then to fail to give a similar expectation of
| reward from the experience of saving 60 lives is not a fair
| argument.
|
| If I can "imagine" the benefactor expecting EUR6,000,000
| worth of experience for knowing the art is on display at the
| local museum, I could "imagine" the benefactor expecting some
| non-zero-euro amount of experience for knowing 60 people
| survived cancer.
|
| If we quantify the "experience" in euros for the first
| scenario, it seems unfair not to quantify the "experience"
| for the second scenario. In this case it is about being
| consistent in argument, which the article fails to do.
| gowld wrote:
| The article sets up (1) a straw man (2) with impossible to
| measure numbers. The author acknowledges the second
| fundamental flaw in the whole enterprise, but not the first.
| jwarden wrote:
| What straw man? The assumptions underlying the theory of QF
| are spelled out cleanly in the original QF paper. The
| article is just enumerating these assumptions and showing
| they don't hold in reality.
|
| The numbers in the example are indeed impossible to
| measure. But QF is claiming *optimality* -- that it
| maximizes social welfare -- when certain assumptions hold.
| To show that QF does not maximize social welfare when these
| assumptions don't hold, it suffices to show a single
| hypothetical counterexample.
| jwarden wrote:
| > accepting the social and individual utility of enjoying the
| arts, but denying any such utility for enjoying the saved lives
|
| But in the part of the article you quoted above, the author
| (me) specifically acknowledges the utility of enjoying saved
| lives. But this is a _critique_ of the quadratic funding
| mechanism, which is a public goods funding mechanism meant to
| maximize the utility each individual _independently_ derives
| from enjoying public good.
|
| The whole point of the article is to critique this assumption
| -- to point out that people's motives are sometimes altruistic
| (they derive utility just from knowing other people benefit),
| but the optimality of QF assumes this vicarious utility does
| not exist. As the article states "When individuals make
| contributions for purely altruistic reasons, they don't
| directly experience the utility themselves. And yet the
| optimality of QF assumes that all utility is direct utility,
| benefiting the contributor only."
| gowld wrote:
| Do you have any evidence that these supposed assumptions
| exist?
|
| No one donates $100K to the opera because they enjoy
| attending opera $1M worth. It's absurd to accuse any opera
| organization of assuming that.
|
| Someone buys a ticket to the opera for $100 because they
| enjoy attending opera >$100 worth. They donate $100K because
| they want other people to enjoy opera, or for personal
| advertising purposes, not charitable social purposes.
| jwarden wrote:
| > Do you have any evidence that these supposed assumptions
| exist?
|
| By existing, so you mean "hold in reality?"
|
| The point of the article is that the assumption that
| underly QF _do not hold in reality_.
| nyeah wrote:
| I don't think you're distinguishing consistently or clearly
| between the OP and the theory being examined in the OP.
| nlitened wrote:
| When people use examples like "wealthy patrons contribute large
| sums of money to art museum to experience individual utility from
| enjoying additional art", it makes me think they understand money
| as little as they do art.
| TheRealPomax wrote:
| They don't have to. When you only have $100, every cent
| matters. Once you have 10k, dollars still matter, but cents not
| so much. They stop having value. And that just keeps going:
| once you have several hundred million, a million bucks has no
| value. It's not just "a small amount of money", it simply has
| no value anymore. You're not "spending it" so much as
| "whatever"ing it.
|
| (Which is why no one should ever even be allowed to have that
| much money)
| jwarden wrote:
| QF makes assumptions like this, but it's not because the
| authors assume these assumptions reflect reality. They are just
| simplifying assumptions that allow formal proof of properties
| like optimality.
|
| Also this article is explicitly challenging these assumptions.
| math_dandy wrote:
| I'm reading a winking, ironic acknowledgement from the
| authors that the mathematical definition of individual
| utility may not map perfectly onto the psychology of a patron
| of the arts.
| saghm wrote:
| > They are just simplifying assumptions that allow formal
| proof of properties like optimality.
|
| And when they're done, the proofs are recognized as being
| fully out of touch with with the reality we actually live in
| based on the fact that their assumptions are also out of
| touch, and nobody actually tries to use them to make
| decisions about how to do things in our very real and non-
| simplified society?
| jwarden wrote:
| Yes, as you (sarcastically) imply people do indeed try to
| use QF to make actual decisions, not recognizing the proofs
| are based on assumptions that don't match reality.
|
| There's nothing wrong with making proofs based on
| simplifying assumptions. A lot of incremental progress is
| made that way. The problem is not the QF theory, it is that
| people are using QF in the real world because they think it
| has all these great theoretical properties _in the real
| world_ -- not recognizing that the underlying assumptions
| are unrealistic.
| crmd wrote:
| I am very suspicious of Quadratic Funding after reading its top
| google result[1] which presents it as an egalitarian democratic
| mechanism, and this article which shows it to have the opposite
| effect in practice. It reminds me of the Citizens United campaign
| finance debate here in the US 15 years ago: aspirational sales
| pitch, appalling consequences.
|
| 1. https://www.wtfisqf.com/
| cogman10 wrote:
| Reading through it and how it's applied (mostly with crypto). I
| have to say that the biggest flaw I see isn't theoretical, it's
| practical.
|
| QF assumes that you can know for sure who is an individual. Yet
| how would you know that with crypto funding?
|
| Let's say I'm malicious and I want to pillage a QF. What stops me
| from setting up a bogus social project/company, registering it,
| and then taking my $1000 and splitting it into 1000 wallets with
| $1 a piece which all contribute to my scam project?
|
| If I know a QF fund is getting setup, it'd be pretty easy to
| create 1000s of wallets, vary the money in them, and have them
| all fund my scam. I can even automate some trading between these
| wallets to make the source of the funds look somewhat organic.
|
| Pillaging these funds seems like it's almost a trivial endeavor
| assuming you can get your own scam company associate with them.
| And the more money you have, the easier it'd be to pillage.
| numtel wrote:
| Generally, QF protocols are paired with a form of Sybil
| resistance.
|
| For example Gitcoin uses passport.xyz to determine if your
| account is considered legitimate.
| jwarden wrote:
| > Pillaging these funds seems like it's almost a trivial
| endeavor assuming
|
| It is, and in fact the authors point this out in the original
| paper:
|
| "...if the size of this group is greater than 1/a and the group
| can perfectly coordinate, there is no limit (other than the
| budget) to how much it can steal."
|
| > I have to say that the biggest flaw I see isn't theoretical,
| it's practical.
|
| Exactly. The theory is fine -- given all these assumptions
| hold. In practice, these assumption don't hold.
|
| For example, one of the assumptions is absence of sybil
| attacks, fraud, or collusion. Obviously, these assumptions may
| not hold.
|
| You can defend against sybil attacks in various ways. But how
| do you stop people from colluding (e.g. I $10 to 1000 friends,
| tell them they can keep $5 if they contribute $5 to my
| project)? There are collusion-resistant forms of quadratic
| funding, such as COCM, but these do not have the desirable
| theoretical properties (such as optimality) that vanilla QF
| has.
| hoppp wrote:
| As somebody who is getting paid via quadratic funding almost
| monthly, I love it but Its also possible to cheat.
|
| There are also issues plaguing the ecosystem like delayed or
| missing payments
| YossarianFrPrez wrote:
| From what I can understand, instead of funding various causes via
| "matching donations" QF is proposal for a funding body to do
| something like 'match in proportion to a blend of the donation
| amount with the number of people donating to the cause.' The
| point seems to be to smooth out any undue influence any one
| philanthropist or individual funder has and make the funding of
| public goods quasi-democratic.
|
| However, compare these two problems: a) not enough people who can
| afford to do so engage in philanthropy, and b) philanthropic
| funding isn't quasi-democratically distributed. I have to imagine
| that (a) is a much, much bigger issue than (b).
|
| I guess one could argue that because there isn't an analog of "a
| market" for public goods (c.f. "The Use of Knowledge in Society")
| somehow we aren't funding the important public goods
| "efficiently"? And maybe we should think about this more? Yet
| it's not clear that efficiency (in the economic sense) should be
| the goal or even applies. This is because markets are great at
| distilling people's the preferences for fungible goods they want
| to buy and fungible services they want to use when faced with
| multiple options for procuring some of each. But a) the vast
| majority of people don't have that same type of preference for
| which public goods should be funded, and b) public goods
| typically aren't fungible. (I.e., funding one scientist gives you
| a very different research output from funding another in the same
| subfield.)
| patcon wrote:
| > a) not enough people who can afford to do so engage in
| philanthropy, and b) philanthropic funding isn't quasi-
| democratically distributed. I have to imagine that (a) is a
| much, much bigger issue than (b)
|
| Consider philanthropy funding as actions that terraform the
| future. The future is where all possibilities unfold, so
| shaping future landscape pays dividends to the worldview of
| those who materialize it.
|
| I would propose that if (b) is miscalibrated and inequitable,
| it might affect everything, including (a), much more than we
| assume.
|
| But also, I'm not trying to claim I know that one is _more_
| important, just that they 're both quite important and very
| interrelated :)
| jongjong wrote:
| Quadratic funding is a terrible idea. It doesn't make sense to
| separate things into quadrants. From the linked article:
|
| > So how about non-excludable goods that are rivalrous in nature?
| This intersection represents common goods such as fish, timber or
| coal. Everyone has access to these resources but there is an
| inherent competition when it comes to collecting them due to
| potential overuse or congestion.
|
| These are excludable in many countries. There are often
| regulations which prevent you from making a living selling fish
| or timber. There is a significant financial and time hurdle which
| needs to be cleared to obtain a boat + license to fish
| commercially. In terms or logging and coal mining, you are
| excluded based on lack of access to land + equipment + license.
| Not everyone legally has access to these in all countries. Also,
| it's not even possible to obtain a loan to do these in most
| countries. It's literally impossible to get started if you do not
| have the financial means.
|
| I would also question the 'non-excludable and non-rivalous'
| quadrant. Not everyone has access to clean air. Many people are
| trapped in urban centres with low air quality and cannot afford
| to leave. Some literally cannot leave because they may be in
| prison, on probation or it's a condition of bankruptcy. Clean air
| is rivalous since there are a limited number of jobs available in
| places where the air is clean. Privacy is certainly excludale;
| e.g. prison and clearly it is rivalous as we have to fight to
| protect it constantly.
| jongjong wrote:
| QF is an awful idea. Literally every assumption it relies on is
| wrong... And probably it exacerbates the situation as
| implementing QF likely causes further degradation of the
| underlying assumptions... By Goodhart's law "When a measure
| becomes a target, it ceases to be a good measure."
|
| It's incredible how, whenever people try to come up with some
| centralized framework, ideology or plan to improve things, they
| make things worse and the cost falls on someone else's shoulders.
|
| I've been feeling the effects of this deeply flawed philosophy in
| my life literally every day yet I had no say on it.
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