Understanding Quadratic Rebates

What are Quadratic Rebates?

Wholesalers have to option to direct any percentage of the Wholesale Price back to the Retailer as an incentive, using a quadratic distribution model similar to the one developed for use with GitCoin Grants. In the Quadratic Rebate model, funding is weighted with respect to the number of items sold through a Retail Contract over the Rebate Period; the Retailer that sells the most items during the Rebate Period will receive the largest share of the rebate pool.

Retailers that sell more of an item will receive a larger share of that item's incentive pool

Using the image above as an example, if the Wholesale Contract contains an item that costs $1.00, and the wholesaler has set the Quadratic Incentive at 50%, then, at the end of the incentive period, the incentive pool would contain $3.50 (50% of seven sales of one dollar each). Upon distribution, the Retail Contract on the left would receive $0.09, while the Retail Contract on the right would receive $3.41.

More information about quadratic funding can be found here: wtfisqf.com