There's a Problem With Crypto Funding

At least, that's the contention of a new paper, shared with CoinDesk on Monday, written by ethereum founder Vitalik Buterin, Microsoft researcher Glen Weyl and Ph.D. of economics at Harvard, Zoë Hitzig.

Described in the paper, free-riders are people or businesses that profit from the under-provision of public goods.

"The more people benefit the more they will be under-provided." It's an issue that plagues development even outside the cryptocurrency space, but the authors are - at least - initially focused on how the idea creates harmful incentives for the funding of blockchain projects.

Whereas currently, crypto development teams rely largely on donations, the altruistic whims of their creators, and ICOs - the paper details a new financing method to support a "Self-organizing ecosystem of public goods."

While Quadratic Voting allows participants to vote with crypto tokens according to how much they care about an issue, Liberal Radicalism expands the same concept to how communities contribute to public goods, such as software development, cryptocurrencies and journalism.

"Individuals make public goods' contributions to projects of value to them. The amount received by the project is the square of the sum of the square roots of contributions received," the paper states.

Speaking to CoinDesk, co-author of the paper Hitzig said that interest is already building between many different groups.

The paper looks to solve those issues and create a more cooperative society.

The paper notes that this could have an immediate impact on projects like ethereum, zcash and other projects that rely on non-profits to distribute funding to the development of the network.

Above all else, Hitzig hopes that by publishing the paper - even though it is imperfect - it will encourage others to think about these problems and either build on top of LR or experiment with their own solutions.