Simple

Suggested idea funding categories are a simple effective approach to funding categorisation

Why is it important?

The simpler that funding categorisation is for the funding process the more that the community will be able to easily understand the process and be able to participate. Simple categorisation helps make it easier to participate, submit proposals and vote on funding categorisation changes.

Challenge settings

• High complexity for challenge teams - Challenge writing increases complexity for the funding process as teams must consider other areas in the ecosystem and justify why their defined categorisation is important. This is an issue for complexity as challenges are a competing form of categorisation meaning that some areas of the ecosystem can be excluded. This increases the complexity and need for justification for why one categorisation should be included over another. By allowing anyone to submit challenges there is also a complexity of how to govern and manage duplicate categorisations with similar briefs or different budget weightings. Challenges which are more specific such as certain product markets or demographics also increase complexity as they require a deeper understanding of the wider ecosystem to apply sensible budget weighting. The higher the number of funding categorisations there are the higher the complexity for determining suitable budget weightings.

• High complexity for proposer - Proposers must learn about a large number of categorisations each and every funding round with challenge settings due to them being are a competing form of categorisation. The more challenges there are the more complex it becomes for proposers to determine which categorisation they should submit their proposals into. If categorisations are changing it also increases complexity as it increases the chance for categorisations to not be clearly defined.

• High complexity for assessor - With challenge settings a number of assessors are required every funding round to review the challenges that are submitted. The higher the number and diversity of challenges there are the more complex it becomes for an assessor to understand all of the categorisations and provide well informed feedback.

• High complexity for voter - The voter must review an increasing number of challenges in every funding round that will often be changing with budgets determined by the challenge team. This depth of information drastically increases the complexity for the voter who would need to have a large amount of insights and context to make well informed decisions on a large number of options. The voter is given the complex task of justifying why certain categorisations should be included and others excluded and whether the budget weightings provided are sensible.

• Increasingly complex malicious actors - With competitive funding categorisation there is an easy entrance for malicious actors to keep consistently trying to game or break the funding process. This could mean making categorisations that are not in the best interest of the community or categorisations that are to serve the interests of the people proposing the categorisation more than the community. As the funding amount increases there becomes an increasing incentive for more complex malicious attacks to emerge.

Funding categories

• Low complexity for category teams - Funding categories offer a number of well defined categorisations that can be used in every funding round. This approach seriously reduces the complexity of funding categorisation. Using recurring and inclusive funding categories removes the complexity of needing to justify new categorisations every funding round. A smaller number of broad categories also means reducing the complexity in determining suitable budget weightings for the categorisations. The fewer the categories the less budget weighting decisions must be made.

• Very low complexity for proposers - Proposers only need to understand a small number of broad categories to know where to submit proposals in the funding process. This simplicity will help increase community members understanding of how to go through the funding process.

• Very low complexity for assessors - Assessors would not be needed to review the funding categories which removes complexity around having to constantly assess categorisations.

• Low to moderate complexity for voter - Funding categories being recurring and inclusive mean voters only need to determine what budget weighting is applied to each of the categories. By using broad categorisations the funding categories also help reduce the complexity for the voter as now they only need to understand a small number of categories and vote on a budget weighting for them.

• Removes complexities from malicious actors - Using recurring categories over changing community created ones each funding round removes the possibility for malicious actors to try and game or break the funding allocation system by writing and promoting challenges that aren't in the best interests of the wider community.

Summary

• Funding categories offer a drastically simpler approach to doing funding categorisation that reduces the complexity for category teams, proposers, assessors and voters. With recurring and inclusive categorisation the complexity of justifying categorisations can be removed. Recurring and broad categorisation also help make the budget weighting decisions simple for voters.