Editing Quadratic Funding (section)

==== Budgeted in practice ====

====== Only scale down matching if budget reached ======
Some implementations act as the Baseline case if the amount total of matching funds calculated is less than the funding pool allocates, funding as calculated, reserving the excess, and only start scaling down the matched amounts as in Budgeted once the budget is reached. Individual contributions are not touched, only the matching amounts. I consider this the best heuristic, especially in opposition to the other major alternative:  

====== Matching funds scaled to fit budget exactly ======
This one works by doing:

Calculate the total payouts to all projects as if you were using Baseline, then, get the ratio of that to (funding pool + all individual contributions). Scale Baseline-calculated payouts by that ratio, then give those payouts to all projects, ''in addition to the individual contributions''. 

This is a bad way of doing budgeting, it's not a heuristic for the Budgeted variant, and misses some key points: 

It can overfund, since it always uses the entire budget, allocating ''more than even Baseline would''.

In practice, it's unlikely that an ''equilibrium'' would be less than the budget, but this is not desirable generally. Early conditions would be especially sensitive to this, especially in the continuous time implementation. If you wanted to allocate, say, $1M a week, whoever posted their project first and got just one donation would be allocated all of that until other projects and donors came in - pool funders may not like this possibility and would be pressured into scaling the pool size manually, starting off small.

When there's an alternative that just doesn't overfund, this is a bad heuristic. This is why starting with baseline allocation until you've hit the budget is ideal. Pool funders could just start things off at whatever rate they wanted to use.
[[File:Quadratic funding per-project allocation diagram.png|thumb|Figure 1: Visual representation of QF baseline's calculation of allocation to one project, with only the yellow area scaled down in the case of Budgeted]]
It also is in error in adding the scaled baseline payouts to the individual contributions, because individual contributions are already included in the final allocation. See Figure 1: This is a representation of how funding for one project is calculated - it already calculates the final result, it doesn't need to have the contributions added back on.

In the proper implementation, if the matching amount is 0, the yellow area is scaled to 0, and this calculation still works. Individual contributions are basically duplicated, which strays significantly from the theory.