What is quadratic funding?

Quadratic funding uses a matching pool to support projects backed by many small donors. Sponsors can supply the pool. The method was developed for funding public goods; it does not calculate token prices or investment returns.

Gitcoin’s explanation emphasizes breadth of support. In a simplified, unconstrained calculation, add the square roots of contributions and square the sum. Subtracting the direct donations gives the ideal matching amount.

Example: four donors versus one

In a hypothetical calculation, four people donating $1 each contribute $4 directly: ideal funding is (1 + 1 + 1 + 1)² = $16, leaving a $12 match. If one person donates $4 instead, ideal funding is (√4)² = $4 and the match is zero. Real rounds can scale or limit payouts according to available funds, caps and verification rules; the example is not a promised award.

Fake identities can distort donor counts, making participant verification a practical concern. The approach appears among Vitalik Buterin’s research interests, but wider financial support is not automatic proof of a project’s quality.