I recently wrote two books about Onchain Capital Allocation and released them in 2024. I am sharing them here for posterity to the Allo research community.
- Innovators Edition - for the community who are deep in the weeds of mechanism researhc
- Explorers edition - for everyone else
Why did I write these?
Capital allocation is one of the most fundamental yet complex challenges in any organization, from individuals managing personal finances to governments and corporations distributing billions of dollars. Traditionally, these decisions have been plagued by inefficiencies, gatekeeping, and a lack of transparency. The advent of blockchain technology offers a radical new approach to this problem: programmable, decentralized, and transparent capital allocation. By leveraging smart contracts and decentralized mechanisms, Web3 enables capital to be distributed in ways that are more democratic, efficient, and resistant to corruption. This book explores the cutting edge of onchain capital allocation, presenting a diverse array of mechanisms that are shaping the future of funding.
From Quadratic Funding to Retroactive Public Goods Funding, from Conviction Voting to Assurance Contracts, this book dives into both time-tested and emerging strategies for allocating capital in a decentralized world. Each mechanism has unique strengths, trade-offs, and ideal use cases. Some, like Quadratic Funding, amplify small contributors’ voices to create more democratic funding rounds. Others, like Dominant Assurance Contracts, solve the free-rider problem by incentivizing participation through financial guarantees. This book is more than just a theoretical guide—it is a field manual for builders, funders, and communities who seek to leverage onchain tools to fund what matters.
The goal of this book is not just to document existing mechanisms but to inspire the next wave of innovation. Just as the internet transformed how information flows, blockchain has the potential to revolutionize how value flows. The experiments detailed in these pages are part of a broader movement to create a more pluralistic, resilient, and self-sustaining ecosystem for funding public goods, startups, and communities. Whether you are a DAO operator, a philanthropist, or a protocol designer, this book provides the knowledge and frameworks to navigate and contribute to this evolving landscape. Welcome to the future of capital allocation.
Explore more at: https://allobook.gitcoin.co/