Pomelo: Quadratic Funding Explainer
Last week EOS Nation announced Pomelo, an EOS crowdfunding platform powered by the magic of quadratic funding. But what the heck is quadratic funding anyway?
Simply put, “quadratic funding is the mathematically optimal way to fund public goods in a democratic community.” In this article we will briefly explain the mathematical formula, we’ll explain the definition of a public good, and share some donation examples and the impacts those would have on various community projects.
First, let’s take a quick look at the math behind quadratic funding. A matching pool is raised and those funds are allocated to crowdfunding campaigns according to the quadratic funding algorithm. The matching funding is allocated based on the square of the sum of the square roots of the contributions made by the funders. In simple terms, this means that many small donations get amplified a lot more than fewer larger donations, and projects with strong grassroots support will end up with a large percentage of the available matching funds.
Next, let’s define what a public good is, since funding these types of goods is the ‘raison d’être’ of quadratic funding. Different types of goods, such as private goods, common goods, club goods, and public goods, can be classified as either excludable or non-excludable, and rivalrous or non-rivalrous. Public goods are non-excludable and non-rivalrous, meaning that we don’t have to compete for them and we cannot be excluded from them either by being priced out or not belonging to a specific group of people. Examples of societal public goods include clean air, infrastructure, and privacy.
In EOS, some examples of public goods include open-source projects, protocol improvements, libraries that help developers, free education available to anyone such as newsletters, podcasts, or YouTube videos, and free services such as ethical hacking and finding vulnerabilities in open-source projects.
Now that we understand the math behind quadratic funding and the types of goods we are aiming to fund, let’s take a look at a simple example that illustrates the power of the model.
In this example we have 3 projects who each received a total of $1000 in contributions from donors. But pay attention to how much more the project with the most unique donors received from the $10,000 matching pool.
Project A received 5 unique donations of $200 and earned an extra $1852 from the matching pool.
Project B received 2 unique donations of 500$ and earned an extra $741$ from the matching pool.
Project C received 20 unique donations of $50 and earned an extra $7407 from the matching pool.
As we can see, Project C’s strong grassroot support was highly rewarded by the quadratic funding mechanism, enabling each donation to be matched by a whopping 740%!
If you’re interested in playing around with different combinations of such numbers we invite you to visit the website WTF is Quadratic Funding, which features a 60 second video, a quadratic funding calculator, and other educational information presented in a simple and visually appealing manner.
For even more information, we recommend watching the 10 minute explainer video called “How Can $1 Turn Into $27? QUADRATIC FUNDING Explained“ on the Finematics YouTube channel, which recaps a lot of the information presented in this article and more. And those who want to do the deepest of dives on quadratic funding can read the 31 page whitepaper or watch the 50 minute YouTube video featuring Vitalik Buterin called “Quadratic Funding in Ethereum – Vitalik Buterin, Pia Mancini – RxC 2020.”
The EdenOS Community is Growing Every Day
The EdenOS membership is growing and the second mock election will take place on July 17.
Inspired by Dan Larimer’s concept of “political playoffs,” EdenOS as a community aims to build consensus on ways to improve the EOS network. If elected, members of EdenOS will be allocated funds in order to execute on their ideas and promises. In order to join the community and participate in the election, potential members need to be invited and require skin-in-the-game in the form of a 10 EOS donation to EdenOS.
After participating in and observing the first Eden Trial Election held on May 13th, EOS Nation sees the potential for EdenOS to elect trustworthy people and is looking forward to the first official election in the coming months.
The EdenOS community is growing everyday and we want to invite you to join EdenOS to keep the momentum going! As of the time of this writing, Eden currently consists of 69 active members with 3 pending invitations (it’s likely to be more by the time you read this).
While these numbers may seem small at first glance, due to the way the EdenOS membership system is structured, the more EdenOS members inducted, the faster we can induct new members! Each EdenOS member has 10 invitations that can be used to onboard members of the EOS community that they know and trust. The official EdenOnEOS Telegram group currently has 437 members and it is reasonable to expect that many of these members are interested in joining the Eden community.
While the first Eden election could be run with only a few hundred members, the stated goal for Eden is to attract 1000 members while the maximum size of the community has been capped at 10,000 members.
As a reminder, in order to join the Eden community you must:
- Have an EOS account
- Be invited by an existing EdenOS member
- Read and agree with the EdenOS Peace Treaty
- Make an on-chain donation of 10 EOS to the EdenOS community
While we wait for the first official EdenOS election later this summer, EdenOS will be hosting some trial elections in order to iron out any kinks still present in the process. The EdenOS Trial Telegram group is private so you’ll need to reach out to an EdenOS member to join that group. The second EdenOS Trial Election has been scheduled for Saturday July 17th and does not require participants to be inducted as official Eden members. Here are the details:
EdenOS Trial Election II
Date of election: Saturday, July 17th, 12:00pm EDT(GMT -4)
- EOS account holder
- Valid email address
- Non-refundable 1 EOS donation to the prize pool
- 2000 EOS will be allocated to Satoshi (Randomly Selected from the Board)
- 100 EOS will be allocated to each Board Member (Consists of at least 3 people)
- 10 EOS will be allocated to each Delegate (Those one level below the board)
EOS PowerUp Telegram Bot & Free CPU on Atomic Hub
The EOS PowerUp Telegram Bot is up and running. The bot, triggered via private messages sent to it, offers 7 free daily PowerUps to each Telegram user allowing EOS users to easily PowerUp their own account or a friend’s account. Simply message the bot and indicate which EOS account you’d like powered up and it’s done! Managing your EOS resources could not be easier!
We’d like to also point out that the EOS PowerUp Telegram Bot is a fantastic example of a public good that was funded by the first Eden Election Trial that can be used by all EOS users on Telegram!
For the more active users, eospowerup.io, the platform built by John Boid that powers the EOS PowerUp Telegram bot, can easily be leveraged to automatically manage your account’s resources. In fact, the EOS Atomic Hub NFT platform is now leveraging the service in order to provide free CPU for all users of the platform, greatly improving the user experience of EOS NFT collectors.
EOSIO Lab by Google Cloud
The announcement of the partnership between Block.one and Google Cloud whipped up anticipation of interesting dynamics to come. The latest development in the burgeoning partnership between Block.one and Google Cloud is the launch of an EOSIO course on the Google Cloud Training catalog.
The Google Cloud Training is a skill-development feature of Google Cloud designed to equip users with the knowledge required to utilize Google Cloud services. This set of courses referred to as labs now includes a new lab titled “Block.one: Getting Started with the EOSIO Blockchain and Smart Contracts.”
The 5-credit course covers topics including:
- Creating a Compute Engine virtual machine.
- Installing the EOSIO platform.
- Running a local single-node blockchain.
- Creating a wallet.
- Loading the EOSIO private key.
The lab can be accessed using a Google account, and it’s smooth sailing from there. With the lab developed in conjunction with Block.One, it was developed to replicate the EOSIO software UX, with the aim of acquainting new users with the EOSIO feel. Talk about a home away from home.
Reminder: NDX To DEX Swap
You can now swap your Newdex NDX tokens to DEX. The swap began on May 31 on the contract name token.newdex. Last week we shared news about the Newdex whitepaper and one important part of the news was this update to the Newdex token structure.
NDX can be swapped for DEX at the ratio of 100 NDX to 1 DEX, owing to the reduction of the total token supply from 10 billion to 100 million. The swap will remain open until 17:00 (HKT) August 31, 2021, after which the crossover to Newdex 2.0 would be complete.
EOS Nation is a top Block Producer on the EOS public network. We earn inflation rewards based on the percentage of tokens staked towards us. Those rewards are reinvested into EOSIO community, tools, and infrastructure. Help grow the ecosystem by staking your vote to eosnationftw for BP or proxying to proxy4nation.
Remember, we never accept compensation in exchange for featuring projects in the EOS Hot Sauce. That means if a project is included in the EOS Hot Sauce it’s because we believe that project brings value to the EOSIO ecosystem and we want our community to know about it!
Are you building an interesting project on EOSIO? We want to hear from you! Reach out to us on social media or email firstname.lastname@example.org.
Thank you for supporting EOS Nation and for reading this week’s edition of EOS Hot Sauce! Want more spicy updates? Check out some of our recent EOS Hot Sauce episodes!
Following some updated guidelines from the WAX Office of the Inspector General (OIG), EOS Nation is now going to be publishing our monthly OIG Reports on our blog platform as well as on the official Github repository.
This publication is a reproduction of the report we submitted to the WAX OIG for July 2021.
EOS Hot Sauce #110 – Go Boldly, Go Bullish! | Pomelo Community | EOS Lost Keys | Defibox Anniversary | VanCity Outbreak | VRGB Season 1
EOS Hot Sauce ingredients: Go Boldly! Go Bullish!, The Importance of Community for the Pomelo Platform, EOS Lost Key Recovery Extended for Five Years, Defibox 1 Year Anniversary, Upland Property to Fiat, RAON Secure Driver’s License, VanCity Outbreak NFT Blending, VRGB Season 01 Launches on Sunday 18th of July, KOGS.GGSLAM, Ultra Mainnet Q&A
EOS Hot Sauce #109 – Ultra Mainnet Live | Origin of Pomelo | 2nd Trial Eden Election | Fair Dapp | Chainflux | Street | Uplfit World & Yoshi Drops
EOS Hot Sauce ingredients: ULTRA Successfully Launches Mainnet, The Origin of Pomelo, Upcoming: Second Eden Trial Election on July 17th, Flair Dapp, Chainflux is #BuiltOnEOSIO, WAX Streetfighter Season 2, Uplift World and Yoshi Drops, Share your EOSIO News and Opinions With Us
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