Difficulty Directing Funding

Concerns with broad categorisation and making it easy to direct funding to certain areas of the ecosystem


There are situations where funding categorisations could make it more difficult to direct funding such as when there is too many proposals or there is limited ability to redirect funding when quality proposals don't get submitted for certain focus areas. Funding categorisations impact how easy it is to direct funding between multiple ideas and how flexible it is for voters to allocate their vote in different situations.

Relevance to funding categorisation

Funding categorisations impact how funding is directed to initiatives as the funding categorisation which get used will determine what ideas have access to funding or not and what level of competition each proposal will have in a given categorisation based on how broad or specific the categorisations are. The following categorisation approaches could impact how easy it is for the community to direct funding:

  • Broad vs specific categorisations - Broad categorisations will increase the competition between more proposals in a categorisation which without the right tools and processes in place can make it more difficult to direct funding.

  • Inclusive vs exclusive categorisations - If inclusive categorisations are used then any type of idea can be submitted which without the right tools and processes in place could make it more difficult to effectively direct funding. Exclusive categorisations could help with directing funding but at the expense of optionality for the voters and increasing the probability of making bad predictions of what will happen in terms of the actual proposals submitted.

  • Unique vs overlapping categorisations - When categorisations are unique it is easier to compare proposals of a similar focus in a single place which makes it easier for voters to determine where to direct funding with their vote. Overlapping categorisations make this more difficult as voters need to consider multiple categorisations when proposals can be submitted in multiple places to make informed decisions on how to effectively direct funding.

Potential Solutions

Broad categorisations

Broad categorisations can increase the amount of proposals submitted in a single categorisation which helps to give the voter more options at the voting stage on where to direct funding. There is increase complexity on proposal visibility and comparing proposals however this is covered below with the other approaches that help with directing funding.

Inclusive categorisations

Inclusive categorisations help to maximise the ideas that can be submitted into the categorisations and give the voter more choices on how they want to direct funding. Inclusive categorisation increases the complexity of deciding where to allocate funding at the voting stage however this problem can be improved using the approaches to direct funding covered below.

Unique categorisations

Unique categorisations help with directing funding as it makes clear where certain proposal types and focus areas get submitted. This then means they can be compared in a single place and more informed decisions can be made on where to direct funding.

Integrate any of the many approaches that help with directing funding

Using broad and inclusive categorisation helps to simplify the funding process drastically but can come at the expense of precision in how funding is directed unless the right tools and processes are in place. Without those tools and processes the most powerful option to decide where to direct funding - their vote! Outside of funding categorisation there is a large number of approaches for directing funding that can be considered and integrated into the voting process to help with directing funding. These approaches help prevent the need for the community to use exclusive and specific categorisation approaches that are more complex to handle and scale.

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