Builder's Fund - Convex Funding - concept for a new allocation mechanism

Allo Ships
1

Status: Executed
Funded Amount: 1300 USDGLO
Authors: @ZER8
Created: 1 May 2025
Proposal Link in Gardens: https://app.gardens.fund/gardens/10/0x1eba7a6a72c894026cd654ac5cdcf83a46445b08/0xd3345828914b740fddd1b8ae4f4d2ce03d1e0960/123/0x4ceda4f34d3512900cc03c813e7eff4619ce5cfa-13

Abstract

Convex funding is an allocation mechanism concept that can be used to rank impact in grant programs. It uses convex functions to emphasize diminishing returns and prioritize grants that show a significant potential for impact even with smaller funding amounts. This approach can direct more of initial investments towards projects where marginal gains are highest, optimizing overall resource allocation before the grant program even begins.

The interesting part is that convex funding can be used as a prediction mechanism, this means we can experiment safely, consistently rank impact categories, and evaluate team performance without actually distributing funding! This adds an extra layer of credible neutrality and protection to grant programs, potentially serving as a valuable filter for future milestones and programs alike.

At the moment convex funding is not a mechanism, but a methodology which requires the following prerequisites:

-the grant program data should be open

-neutral reviewers(participants with some context)

Why is Convex Funding relevant?

  1. It can be used to check if allocators are unbiased
  2. Optimizes grant programs by ranking the potential impact the funded or to be funded projects can have in an ecosystem or web3
  3. It operates on the assumption that any grant program with a sufficienty developed review rubric + the crowdwisdom of the reviewers

will lead to approximatively the same results as a gated program run by very experienced managers

  1. My hope is it can complement QF and CV by allowing people to make predictions on which projects will have more impact

For more information please check out the results from Convex Funding Pilot

Convex funding is only a concept, it’s kinda my brain dump after 3 years in the grant game as both a reviewer and allocators, the funding will allow me to continue to research and optimize the methodology, thus paving the way into building it onchain on Allo.

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