Quadratic Voting and Quadratic Funding

Voice for the Many, Not Just the Money

One of the crown jewels of Crypto-Luminist governance is quadratic voting (QV), along with its financial counterpart quadratic funding (QF). These mechanisms epitomize the blend of individual choice and collective welfare that defines Crypto-Luminism. In a traditional one-token-one-vote system, someone with 100 tokens has 100× the voting power of someone with 1 token. QV changes this by making vote power increase with the square root of tokens spent rather than linearly. In practice, the cost of votes to achieve a certain influence level is quadratic: e.g. 1 vote costs 1 credit, but 4 votes cost 16 credits, 9 votes cost 81 credits, and so on. This means that large holders can still express stronger preferences, but at exponentially increasing expense. The result is that no single wealthy voter can overwhelm the majority without incurring prohibitive cost, yet individuals can signal intensity of preference on issues they really care about. Glen Weyl, who pioneered QV, explains that it "gives everyone equal power to direct attention" towards issues they care about, but forces them to do so at a cost, thus finding a "perfect balance between the two ideas" of majority rule and weighted influence [10]. In other words, QV aims to achieve decisions that maximize the satisfaction of the greatest number of people, not just the richest. Vitalik Buterin saw promise in this model and suggested early on that Ethereum experiment with QV as a way to break out of governance gridlock and plutocracy. It's seen as a moderate alternative between coin voting and pure one-person-one-vote, aligning with Ethereum's penchant for nuanced solutions. Ethereum communities have indeed begun using quadratic voting in various settings. For example, Gitcoin's DAO has used QV for certain governance decisions, and 2021 saw the launch of Quadratic Voting DAO experiments. However, implementing QV in practice depends on one critical prerequisite: Sybil-resistant identity. If each participant can cheaply create multiple identities (Sybil attack), they could split their tokens among fake accounts to game QV (since QV treats each "identity" more equally). Therefore, QV needs a way to ensure each voter is unique. This realization has driven much work on decentralized identity, as we'll discuss in the Challenges section. Projects like Proof of Humanity, BrightID, and Idena have been used to give each Ethereum address a verified "personhood" stamp, so that quadratic voting can be more than just quadratic coin voting – it becomes quadratic human voting. When properly combined with identity, QV is a powerful tool for Crypto-Luminism: it respects that people with more at stake can signal more (a nod to capitalist meritocracy), but it prevents the outright dominance of wealth by ensuring broad support is necessary to sway outcomes (a nod to democratic equality). If QV gives communities a better way to make decisions, quadratic funding (QF) gives them a better way to pay for shared needs. QF applies the quadratic principle to charitable or public goods funding. In QF, a matching pool of funds is set aside by major donors (e.g. philanthropists, foundations, protocol treasuries). Then, individual community members donate to the projects they support. The key is the matching formula: projects are allocated matching funds based not on total raised alone, but on the number of distinct contributors and the amounts, with smaller contributions from many people being worth far more than a few large contributions. The formula (from the Liberal Radicalism paper [10]) effectively means $1 from 100 people beats $100 from 1 person in terms of attracting matching dollars. This optimizes funding for what "the poor and the many" value, rather than only what "the rich and the few" do. On Ethereum, Gitcoin pioneered QF in practice. In a Gitcoin grants round, you might donate $5 each to 10 different open-source projects you love. Even though that's only $50 total, if hundreds of others do the same, Gitcoin's pool (provided by bigger sponsors) will match those donations by large factors – sometimes turning each $5 into $50 or more for the project. This way, even a modest donor can have an outsized impact if they represent a common preference. The results have been remarkable: by 2022 Gitcoin reported that the funding raised for public goods was 3000% higher than when they started in 2019, thanks largely to the QF mechanism and community growth [4]. Over $50M has been directed to projects that likely would have struggled for funding in a pure market (because they're public goods), including key Ethereum infrastructure like Prysm (an ETH2 client), WalletConnect, and even early funding for Layer-2 project Optimism [4]. These projects reached sustainability and later even became funders themselves, exemplifying a virtuous cycle of communal investment. Notably, all this happened without a government mandate or centralized charity – it was native to Ethereum, run by smart contracts and community enthusiasm. The QF model has proven so successful that other ecosystems (like Polkadot's Kusama via Gitcoin, or the NEAR community) have adopted it, and even outside crypto, institutions like quadratic.vote have run QF-style campaigns for academic research and media. The mechanism channels self-interest (people want projects they use to thrive) into public benefit (funding those projects for everyone's benefit). It's a live demonstration of Crypto-Luminism: market-driven allocation of resources to meet collectively identified needs. As a builder or community organizer, embracing QF is a call to action – whether joining existing rounds (e.g. donate to grants, or offer matching funds if you have resources) or setting up QF for your own community's needs. Imagine city governments or local communities using quadratic funding to decide budgets (some have begun trying pilot programs); Ethereum has provided the template and tooling to do it in a transparent, low-overhead way. In summary, quadratic voting and funding are transformative because they resolve a long-standing tension: enabling robust participation and expression from the many while utilizing the information and commitment of those with more resources. They curb the worst excesses of plutocracy without descending into ineffective equal-allocation schemes. Ethereum's embrace of these tools is a major reason we believe Crypto-Luminism is the inevitable trajectory – these mechanisms show that we can have the best of both worlds in governance and economics. Now that they exist, communities will demand them. Our call to action: if you run a DAO or any decision-making process on Ethereum, consider piloting quadratic voting for your next proposal; if you care about a cause or protocol, rally people to use quadratic funding to support it. By doing so, you directly advance the Crypto-Luminist model and prove its value in practice.