Gov/en/Portal:R&D/Innovations:Need-Driven Funding

💡 In simple words: Need-Driven Funding is a rule of honesty: WikiDeal first says how much money it really needs to run, like a family writing its monthly budget on the fridge. Donations follow that real need, and each donor freely chooses how many of their thank-you Rewards they keep and how much they simply give to the project.

🎯 In 20 seconds (scientific summary): Need-Driven Funding is currently proposed as the mechanism that aligns funding with the Ynternet.org Foundation's declared needs. The Foundation publishes a need gauge (an initial requirement plus a variable functioning cost, for example CHF 10,000 per month, adjustable); the effective Reward multiplier would follow that declared need. At donation time, each donor freely chooses how many of the generated Rewards they keep and how much they leave to the project as pure support. The funding starts at zero or in negative territory (founders invest before the call for funding). Non-speculative, donation-based, transparent.

Summary

• What is it?
• Starting at zero or in negative territory
• An illustrative example
• How it works
• Principles
• Relationship to other mechanisms
• State of the art

Need-Driven Funding

Innovation, WikiDeal R&D. Formerly known as Boost, Balanced Boost or Funding Stabilizer: those names are deprecated.

Type	Second algorithm
Separate from	Bonding Curve
Purpose	Funding aligned with declared needs
Cap	None, continuous curve
Driver	The Foundation's declared need (need gauge)
Speculation	❌ None, at-cost, donation-based
See also	Rewards · Rewards FAQ

What is it?

Need-Driven Funding is a second algorithm, entirely separate from the bonding curve, that aims at one thing: funding follows the real, declared needs of the platform, not market forces. It is intended to be non-speculative and transparent, and it currently rests on two building blocks, proposed as a basis for discussion:

• The need gauge. The Ynternet.org Foundation would declare its real need publicly: an initial requirement plus a variable functioning cost (for example CHF 10,000 per month, set at launch and adjustable). While this declared need is not covered, donations would carry the full multiplier of the bonding curve; once the need is covered and a provision builds up, the effective multiplier would decrease, and the difference would feed a provision fund intended to be managed by the Ynternet.org Foundation, for the maintenance and development of WikiDeal.
• The donor's free choice. At donation time, the donor sees how many Rewards their donation generates, and simply chooses how many of those Rewards they keep and how much they leave to the project as pure support. Simple formulas are currently proposed to make this choice easy, from keeping nothing to keeping the maximum: see the Rewards FAQ.

The mechanism is not about maximizing returns: it is about aligning funding with what the platform actually needs at each stage of growth.

Starting at zero or in negative territory

A key point: the funding starts at zero or in negative territory, because investments by the founders take place before the call for funding. This is what makes the beginning very attractive. The key variable is the funding cost ratio: how much has already been spent when the first call is launched.

Donors and potential donors would receive notices (suggesting a complementary donation, or informing their network) and would see a reward multiplier that theoretically decreases over time, though not necessarily continuously: the effective multiplier for donors decreases while the share feeding the provision for maintenance and development grows with revenue.

An illustrative example

The variables matter more than the figures: all figures below are placeholders, and contributions remain non-speculative donations.

• About CHF 100,000 invested before the call for funding (the initial requirement), plus a functioning variable of about CHF 10,000 per month of operating costs (salaries, servers, steering committee meetings).
• After 6 months: CHF 100,000 + 6 x 10,000 = CHF 160,000 raised would bring the declared need below 100 percent.
• After 12 months: CHF 220,000 raised would mean the initial CHF 100,000 covered and 12 months of costs covered.
• The variables are the monthly amount (here 10,000) and the number of months of provision wanted (typically 3): a provision target of 3 x 10,000 = CHF 30,000.
• On a funding curve where the multiplier is blocked at x100 for the first CHF 200,000 raised (out of a CHF 1,000,000 target), then declines towards x30: once the declared need is covered, the difference between the multiplier promised by the curve and the effective reward attributed would benefit the provision fund of the Ynternet.org Foundation.

How it works

The model currently proposed as a basis for discussion works in two steps:

• The effective multiplier follows the declared need. The bonding curve announces a multiplier; the declared need modulates it. While the need is at 100 percent (not yet covered), the full multiplier would apply. Once the need is covered and the provision fills, the effective multiplier would descend continuously: there is no fixed cap, no sudden thresholds, no arbitrary percentages. The difference would stay with the Foundation and feed the provision.
• The donor decides what their donation becomes. Once the generated Rewards are displayed, the donor chooses the share they keep (potentially convertible, 1 Reward = CHF 1 when cashed out, without guarantee) and the share they leave to the project as pure support. This choice is made at donation time and does not change later.

This goes in this tendency and is the model currently proposed; the exact formula is intended to be published and reviewed.

Principles

• Non-speculative: funding follows real, declared needs, not market sentiment.
• Transparent: the need gauge and the formula are intended to be published, auditable, and subject to Open Call review.
• At-cost: no extraction beyond what the platform needs to operate.
• Free choice: each donor decides how many of the generated Rewards they keep and how much they leave to the project.

Relationship to other mechanisms

Need-Driven Funding is a companion to the bonding curve, not part of it:

• Bonding curve → determines total Rewards generated per CHF.
• Need-Driven Funding → aligns the effective reward with the Foundation's declared need, and frames the donor's choice of Rewards kept versus support left to the project.
• Subscription model → provides the revenue that would make Rewards convertible, following the 25/25/50 rule.

The combination of the bonding curve and Need-Driven Funding creates a self-regulation that makes Exit to Community much less speculative: based only on real flows and real needs.

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State of the art

Adjusting rewards to the real needs of a shared platform relates to the economics of clubs, nonprofit enterprise and threshold funding mechanisms. The references below situate this invention in existing research.

• James M. Buchanan (1965), An Economic Theory of Clubs, Economica, 32(125): doi:10.2307/2552442 · club good on Wikipedia.
• Henry Hansmann (1980), The Role of Nonprofit Enterprise, Yale Law Journal, 89(5): doi:10.2307/796089.
• Alexander Tabarrok (1998), The private provision of public goods via dominant assurance contracts, Public Choice, 96: doi:10.1023/A:1004957109535 · assurance contract on Wikipedia.
• Ethan Mollick (2014), The dynamics of crowdfunding: An exploratory study, Journal of Business Venturing, 29(1), on threshold (all-or-nothing) funding: doi:10.1016/j.jbusvent.2013.06.005.
• René Bekkers and Pamala Wiepking (2011), A Literature Review of Empirical Studies of Philanthropy: Eight Mechanisms That Drive Charitable Giving, Nonprofit and Voluntary Sector Quarterly, 40(5): doi:10.1177/0899764010380927.

See also: Bonding Curve · Rewards · Rewards FAQ · Revenue Structure · Karma tokens · Subscription Model · All innovations · Open Calls