Economics
For a backer
You cannot lose your pledge: if the goal is missed, it comes back in full. If you pledged in the first half, you also earn the bonus rate on the early part of your pledge. If the goal is met, your pledge pays for the work you wanted.
That makes backing early the better move whatever other people do, which is the point of a dominant assurance contract. Waiting until the end to see how things go earns nothing extra.
| You pledge | Goal met | Goal missed |
|---|---|---|
| 100 USDC on day 3 of 30, 20% bonus | the work is funded | 120 USDC back |
| 100 USDC on day 16 of 30 | the work is funded | 100 USDC back |
For a creator
The deposit is the price of a credible promise. It comes back in full when the campaign succeeds. When it fails, the creator gets back whatever part of it no backer earned: deposit - bonus_owed.
The lab result: with a 20% early bonus, 67.0% of campaigns reached their goal against 43.5% with no bonus. Restricting the bonus to early contributions cost less (12.79 lab dollars of bonus paid per round against 21.43 when every contribution earned it). With a goal set 10% above the real cost, fundraisers using the early bonus earned more than without one, even after paying bonuses on failures (16.39 against 15.41). The mechanism can pay for itself.
Choosing the numbers
- Rate: the paper used 20%; 10% did worse. The program allows 1% to 50%.
- Deposit: sets how much early pledging earns the bonus:
early_cap = deposit / rate. It must not exceed the goal:deposit / rate <= goal. - Length: 1 to 90 days. The bonus window is always the first half.
The fee and the burn
A successful campaign pays 2% of everything raised, taken at settle. Failed campaigns pay nothing. A creator who locks waiver_amount PLEDGE in the campaign until it settles pays no fee.
Every unit of fee buys PLEDGE on its Raydium CP-Swap pool and burns it, through crank_burn, which anyone can call. There is no treasury and no wallet in the loop.
Worked example: 1,000,000 USDC raised by successful campaigns pays 20,000 USDC in fees, and all 20,000 USDC buys PLEDGE and burns it. USDC and SOL fees are counted separately and never added together.