Promotes Healthy Competition

Suggested idea funding categories promote healthy competition between a diverse amount of proposals

Why is it important?

Categorisation should promote healthy competition so that the best ideas and teams compete for the opportunity to be funded. Strong competition between proposals should lead to better results in finding and funding the best talent that can push the ecosystem forward.

Challenge settings

Challenge settings can promote healthy competition in certain circumstances and be less effective in other situations. Challenges could either be broad objective or topic based or specific objective or topic based.

• Broad objective or topic challenges - Challenges with a broad objective or topic scope are similar to funding categories due to allowing for a wide range of proposal types and ideas to be submitted. In these situations the challenges help create an environment that promote competition between an increased range of proposals.

• Specific objective or topic challenges - Specific objectives and topic based challenges limit what proposal types or which ideas can be submitted in the categorisation. This reduction in what can be submitted leads to an increased chance of having less proposals submitted meaning less competition between proposals. It can also lead to situations where proposal quality is lower due to a lower proposal turnout. Less competition increases the chance of potentially funding lower quality proposals which would have been avoidable if more competition was created through the categorisation.

• Exclusive funding - Because challenges can lead to exclusive categorisation due to changing each round there is an increase in the chance of certain proposal types or ideas being excluded. This reduces the total competition due to the areas of the ecosystem that are excluded and also reduces the competition of the competition between proposals that are included due to the increased amount of funding they have access to.

Funding categories

Funding categories help to promote healthy competition by being both inclusive and broad forms of categorisation that result in the ensuring the maximum amount of potential proposals can compete for funding.

• Inclusive categorisation - Funding categories are a form of inclusive categorisation meaning that all forms of ideas and innovation can be submitted to the funding process. This results in higher competition between proposals that gives the voters the maximum amount of choice in deciding what they want to vote on to receive funding.

• Broad categorisation - Using broad categorisation means a larger number of proposal types can be submitted into a single category. This makes the categorisation more flexible to changes in what innovation presents itself for each funding round. If proposals of a certain type or objective focus don't get submitted then at least there are numerous other areas that can compete instead. With broad categories there is no reliance on innovation needing to emerge from a single objective or area. Instead multiple proposals targeting different objectives can be submitted. Broad categorisation helps to promote healthy competition by inviting a wider range of proposals to compete for the same limited amount on funding.

• Supporting newcomers and unknown teams or ideas - Funding categories also include a category called Small & Early Stage Ideas that helps new ideas or small teams have an increased chance for receiving funding. This is achieved by limiting the proposal funding size and inviting any Cardano related proposal be submitted. This helps to prevent situations where healthy competition in categories prevent new entrants from receiving more difficult access to opportunity.

Summary

• Funding categories are more effective at consistently promoting healthy competition by inviting all forms of idea and innovation to compete in broad categorisations used in funding process. With funding categories there is an increased chance to attract a wider selection of quality proposals that effectively compete for funding.