Eight Reasons Why Quadratic Funding Is Not Optimal

Introduction Quadratic funding has received a lot of attention recently as a mechanism for funding public goods—especially in the cryptocurrency space. QF is appealing because it is theoretically optimal under certain assumptions1.\nThe problem is that these assumptions don’t ever hold in reality.\nThe theory behind QF is sound and elegant, and the authors of the original paper are clear about the assumptions. They don’t claim they are likely to hold in reality, and warn about the consequences when they don’t hold. Unfortunately, practitioners have sometimes been too enthusiastic, implementing QF in settings where theory actually predicts poor results.\n