News & Opinion Funding Mechanisms

Economic sustainability for an open and diverse media industry

Olas employs a novel quadratic funding mechanism to ensure both a competitive and democratic environment for donor money.

Prior to these competitions occurring, funds will be allocated across topics and writers using credibly neutral mechanisms that guage relative demand across topics.

The following sequence diagram demonstrates how the Olas funding mechanism for news and opinion works:

News and Opinion Sector Pool

Every quarter a certain percentage of the donations of avid readers, high net worth individuals, corporations and governments will be allocated to the News and Opinion Pool by the Olas Foundation.

News and Opinion Topic Pools

Olas topic pools are deployed by Olas developers for topics that require regular reporting. Active donors participate in funding competitions that occur in these topic pools.

Demand-Based Allocation

Olas implements a market-based allocation system to ensure fair and efficient distribution of funds to topics and journalists that deserve them most. This system evaluates the level of interest in articles in each topic pool based on a set of metrics that reflect this interest.

How it Works

A contributor who wants to write on the platform can enter a funding competition in a given topic pool. Active donors can then vote on the proposal and donate money to the topic pool. The amount of money that a donor donates is equal to the square root of the amount that they value the contributor. This means that donors who value the contributor more will donate more money. Contributors will receive a matching donation from the topic pool equivalent to the number the earn according the above formula. If there are insufficient funds allocated to the topic pool by the global matching pool, matched donations will be paid as a percentage of the share of the pool contributors earn on account of the quadratic rules.

Benefits of the News and Opinion Funding Mechanism

The Olas funding mechanism offers several benefits, including:

  • It allows funds be allocated in a decentralised non-hierarchical fashion, somewhat removing politics from the equation

  • It frees contributors from editorial direction imposed by private owners of newspapers and science journals

  • It enables contributors to grant open access to their work without needing to worry about being rewarded for it

  • It ensures local and niche information is economically viable

Last updated