Futarchy pools

Solution We propose a protocol that focuses more on prediction markets to decide pool distribution instead of pure quadratic funding. There is a matching pool to be distributed among the most betted projects in the prediction market round, but the money invested in making those bets is distributed back to the users who vote for the best projects proportionally to their bets. With this approach, users can see their donations as an investment in a pool that could return a significant yield while curating projects simultaneously. This type of project is suitable not only for distributing a pool of donations but also for investment pool distribution. To prevent users from betting on projects with already higher reputations, users' bets are obfuscated using commitment schemes that are revealed at the end of the round. To prevent whales from investing large amounts to make their own/preferred project win and ensure they win the round and take money from other users, a quadratic formula is implemented to reduce their voting rights for larger bets. The matching pool creator can also set a maximum betting amount per user in addition to selecting the pool amount and assets, the number of projects that will receive the investment (or donation), and eligibility criteria to influence prediction market users. To prevent sybil attacks, we will leverage the Worldcoin Identity protocol. As users receive a soulbound token that accumulates reputation and we give more voting power to higher reputation users, the protocol improves with every round conducted. Simulations prove that leveraging experts to lead the results of the prediction market improves the outcomes. As the fund pool is distributed among fewer projects, the amount per project can be more substantial to achieve positive results.

Stakeholders

Matching fund creator: Originally, the protocol is conceived for the distribution of a pool of donations like in quadratic funding protocols, but we want the protocol to also be suitable for allocating investment funds. Prediction market users: These users bet on the round's outcome and are incentivized to perform due diligence and vote professionally, as they can either lose all their funds or get them back with a significant yield. Projects seeking funding: They play a significant role in attracting users to vote for them and also in attracting new donors/investors if the project's quality is high.

prediction market with commitment schemas to reveal your bet only at the end of the round. soudbound token for reputation and quadratic formula for weighting the betting and reputation voting power. deployed on base sepholia for conducting a round for nouns dao. privy for user onboarding repo for the front end: https://github.com/ottodevs/pb-app repo for the smartcontracts: https://github.com/ottodevs/pb-contracts