Designing Refund Bonus Schemes for Provision Point Mechanism in Civic Crowdfunding.

Civic crowdfunding (CC) is a popular medium for raising funds for public projects from interested agents. With Blockchains gaining traction, we can implement CC reliably and transparently with smart contracts (SCs). The fundamental challenge in CC is free-riding. PPR, the proposal by Zubrickas [21] of giving refund bonus to the contributors when the project is not provisioned, has attractive properties. As observed by Chandra et al. [6], PPR incentivizes the agents to defer their contribution until the deadline, i.e., a race condition. For this, their proposal, PPS, considers temporal aspects of a contribution. However, PPS is computationally complex and expensive to implement as an SC. In this work, we identify essential properties a refund bonus scheme must satisfy to curb free-riding while avoiding the race condition. We prove Contribution Monotonicity and Time Monotonicity as sufficient conditions for this. We show that if a unique equilibrium is desirable, these conditions are also necessary. We propose three refund bonus schemes satisfying these conditions leading to three novel mechanisms for CC - PPRG, PPRE, and PPRP. We show that PPRG is the most cost-effective when deployed as an SC. We prove that under certain modest assumptions, in PPRG, the project is funded at equilibrium.