  In this paper we examine the mechanism proposed by Buterin, Hitzig, and Weyl
(2019) for public goods financing, particularly regarding its matching funds
requirements, related efficiency implications, and incentives for strategic
behavior. Then, we use emerging evidence from Gitcoin Grants, to identify
stylized facts in contribution giving and test our propositions. Because of its
quadratic design, matching funds requirements scale rapidly, particularly by
more numerous and equally contributed projects. As a result, matching funds are
exhausted early in the funding rounds, and much space remains for social
efficiency improvement. Empirically, there is also a tendency by contributors
to give small amounts, scattered among multiple projects, which accelerates
this process. Among other findings, we also identify a significant amount of
reciprocal backing, which could be consistent with the kind of strategic
behavior we discuss.
