Cardano's Project Catalyst Aims to Improve Decentralized Funding Models

According to Cointelegraph, Kriss Baird, group product manager of Project Catalyst, discussed the challenges and opportunities of decentralized funding models at the recent Cardano Summit in Dubai. Project Catalyst is a community-driven governance and grants mechanism within the Cardano ecosystem that allows users to vote on funding proposals. Baird highlighted the limitations of traditional financing models, where funding decisions are made by a small group of people, often leading to suboptimal outcomes and limited community involvement. In contrast, decentralized funding initiatives offer a more democratic approach, giving crypto holders a platform to voice their ideas and concerns. However, Baird acknowledged the challenges of managing large-scale community-driven projects, as permissionless, decentralized communities can consist of tens of thousands of stakeholders and projects worldwide. To address this issue, Project Catalyst introduced a milestone-based funding approach and accountability model, allowing the community to not only decide on funding proposals but also verify that funded projects are achieving their set targets. Project Catalyst recently changed its voting system, replacing the upvote and downvote mechanics with a 'yes-or-abstain' model to encourage more participation from new ecosystem members. Baird suggested that the previous voting system might be reintroduced for more mature projects in the future. He envisions decentralized funding evolving into a multi-tenant ecosystem, with other blockchain networks, Web2 businesses, and governments adopting similar approaches. Since 2021, Project Catalyst has funded over 1,300 projects, raising 137 million ADA (approximately $60 million), and Baird estimates that the initiative will allocate over $100 million in the next four years.