Streaming Quadratic Funding
Streaming quadratic funding (SQF) is a novel implementation of quadratic funding (QF), the public goods funding mechanism introduced by Vitalik Buterin, Zoe Hitzig, & Glen Weyl and popularized in web3 by Gitcoin.
As the name suggests, SQF is QF with a streaming architecture. Donations are structured as open-ended money flows rather than one-off transfers. A quadratic matching formula continuously allocates pool funds based on these streamed “votes.”
People sometimes describe quadratic funding (and quadratic voting) as high-bandwidth democracy. In QF/QV, participants express not just the direction of their preferences but also the degree of these preferences. These additional bits of information help improve the collective decision-making process by optimizing how voices are heard.
Streaming quadratic funding extends this informational advantage by embracing the dimension of time. Participants can change their donation streams with new information or preferences anytime. These changes will immediately (and gas-efficiently) update the corresponding quadratic matching streams going forward. Put another way, SQF’s democratic outputs adjust to changes in preferences in real time.
Why streaming?
SQF isn’t just a faster QF.
By eliminating time discontinuities of the periodic round, SQF becomes a different QF—creating new dynamics for grantees, donors, and outcomes while maintaining QF’s core democratic principles and effectiveness.
SQF rounds can be open-ended or longer than practical for periodic rounds (with traditional QF, the matching pool is distributed only after the round ends). This shift can relieve structural pressure to consolidate grantee discovery and donor/voter participation.
SQF grantees don’t need to compete for donor mindshare during constrained voting periods the same way and can stay focused on their core missions. Donation widgets in dapps, websites, code repos, and on social could become the primary and decentralized method to discover worthy grants.
The periodic round structure also asks a lot of donors/voters. It’s difficult to make informed decisions across numerous and broad rounds. With SQF, there’s an opportunity for higher signal and sustained donor-grantee relationships that evolve naturally on the donor’s timeline.
SQF’s continuous model can also provide more funding predictability for grantees. Funds streamed through an SQF pool immediately hit the grantee’s account with incremental shifts in receipts.
This velocity means amplified impact and efficiency with limited capital from funders. Take the Geo Web protocol (where SQF was invented) for example. It generates ETH streams from its PCO land market. Before SQF, these funds would idly accumulate in the treasury until being periodically dispersed. Now, the Geo Web’s ETH can immediately help grow the network (i.e., grow the ETH revenue the land market generates) and drive a public goods flywheel. This is how scrappy public goods can outcompete lavishly-funded behemoths.