This City Pilots Web3 Quadratic Funding for Public Infrastructure

The city of Split, Croatia is piloting an innovative new system for deciding how to fund municipal infrastructure projects. Called "quadratic funding," the mechanism aims to fairly account for both public and private preferences when allocating limited budget resources.

A coalition of organizations including BlockSplit, Funding the Commons, Gitcoin, and the City of Split launched the Municipal Quadratic Funding Initiative in September 2023. The project goals include implementing quadratic funding for prioritizing public spending, utilizing web3 tools to increase transparency and participation, and demonstrating the potential of these technologies to improve legacy processes.

If successful, the model could scale to other towns and cities or inspire additional quadratic funding experiments.

The partners believe that the transparency and configurability of blockchain systems make them well-suited to quadratic funding applications.

Quadratic funding mathematically accounts for the intensity of demand for public goods. Groups can create projects which individuals can support financially. The amount of money ultimately directed to each proposal is based on the square of support received. This means that projects attracting larger numbers of smaller contributions can compete with those receiving fewer large donations.

In this way, quadratic funding aims to reflect both willingness to pay and breadth of support in funding decisions. It attempts to break tendency towards corruption where influential groups lobby for their niche interests. The goal is a fairer allocation suited to the whole community's preferences.

The initiative will build on open source quadratic funding infrastructure already deployed for other uses like funding public goods on Ethereum. Practical web3 tools can help teadministration manage funding rounds and disburse awards.

Features like easy onboarding to contribution platforms, embedded social media apps to increase engagement, and blockchain-enabled transparency and control of donations help box technical obstacles. Modular expandability ensures future councils can customize processes over time as needs change.

Goals include onboarding thousands of locals onto contribution platforms and enabling a meaningful portion of the municipal budget to be directed through the web3-quadratic system.

The partners believe demonstrating efficiency concretely on existing public goods like roads or parks is key to ultimately making quadratic funding a default option. If the method and tools prove themselves in Split, exponential growth across Croatia could follow in coming years.

A small experiment funding neighborhood improvements in Croatia's second largest city may pioneer a better way to budget public money. The Municipal Quadratic Funding Initiativecombine modern cryptography with an innovation in mechanism design to surface fairer collective preferences. If Split's pilot takes off, quadratic funding could soon reshape policy in towns and cities across Europe and the world.