Open Source Contributors - A promising alternative to idea based funding

We’ve recently finished a proposal outlining the opportunity to experiment with an open source contributor funding process. This suggested funding process could become a highly effective and scalable approach for Web3 ecosystems to more consistently generate impact.

The opportunity to experiment with a contributor funding approach is better highlighted by understanding some of the problems that exist with idea based funding:

  • For contributors, the proposal submission process can require a large amount of effort and time upfront for contributors to participate and then also handle the ongoing burden of proposal writing and budgeting complexities to get involved in an ecosystem. The structure and incentives of this funding process result in a reduced amount of contribution flexibility and income stability that can deter contributors from participating or limit their ability to easily generate high impact.
  • For voters, it is often highly complex to compare and select ideas effectively. Many voters lack the sufficient context, skills and experience required to be well informed and effectively participate in these decisions. The selection process can be highly time consuming and complex for the voters. Voters can rarely express their exact preferences with their voting decisions and also do not have enough accountability or incentives to be expected to spend a meaningful amount of time on voting to make more optimal and well informed decisions.
  • For Web3 ecosystems, ideas are often treated as ephemeral yes or no funding decisions rather than being a collaborative process that looks to discuss and explore different solution approaches. In larger funding processes it can also become easier for innovative ideas to be ignored due to being less well understood or known. The allocation of assets can also be more inefficient in situations where the allocated funds are not actively being used to generate contribution outcomes, this can increase the percentage of deadweight assets that are not being fully utilised at a given point in time.

To understand these problems in more detail you can review our analysis on the current funding landscape - Current funding landscape | Contributors

The good news is that most of these problems can be either greatly reduced or fully resolved! An open source contributor funding process can help with resolving these problems and also could become a highly reliable and effective process for maintaining and improving Web3 ecosystems over the long term.

Our proposal outlines the suggestion of experimenting with directly funding a small number of open source developers that would help with developing any open source initiatives - this could include improving any existing pieces of software used in the ecosystem or creating entirely new tools and libraries.

The advantages and long term opportunities for adopting a contributor funding approach are numerous. We’ve covered the advantages and opportunities of this suggested funding process in more detail in our proposal - Open source contributor funding | Contributors

You can alternatively watch our videos that cover the same content from our proposal:

The background analysis that helps to support this proposal can be found here -

Experimentation in Cardano

I have historically suggested a contributor funding process for Cardano when doing the funding categories analysis. As part of that analysis some suggested categories were Catalyst contributors, Infrastructure contributors and Cardano contributors.

More analysis has now been completed to support this previous suggestion of implementing a contributor focussed funding process. This recent analysis can be found here -

Now that a dedicated Catalyst website is being developed to become the new platform for Catalyst funding there is an opportunity to explore whether a contributor funding process could be an impactful and reliable funding approach to build into this infrastructure.

One approach this experiment could be initiated is by setting up a category to invite contributor based proposals that the community can select in the funding process. The same milestone process could then be used to pay these contributors each month after they submit a contribution log.

If this suggested approach was not preferred by the Catalyst team and wider community then another approach could be that a proposal can simply be submitted into the Catalyst funding process that requests funding to experiment with this funding approach. The proposing contributors would then operate this experiment and analyse the results.

Experiment facilitation

If any ecosystem was interested in experimenting with this suggested funding process but doesn’t want to handle the process fully themselves I am eager to collaborate with them and help wherever I can with setting up and running any of these experiments that are focussed on contributor funding.

In either event, contributor funding experiments across many ecosystems could be highly beneficial for the wider industry. The outcomes from these experiments can be analysed to better compare the strengths and weaknesses of this suggested approach against the widely adopted idea based funding approach that we see being more widely used across Web3 ecosystems today. Analysing and documenting these experiment outcomes is something that we intend to work on at the Web3 Association!

Community discussion

General thoughts & feedback
There’s likely going to be many opportunities and problems that could be better explored and addressed. If you have any immediate thoughts and feedback please share anything below in a comment!

Organising a wider discussion
If there are already weekly or monthly organised discussion events that happen internally or publicly I’d be delighted to join one to listen to peoples different perspective about this funding process suggestion to better understand any of the different viewpoints around this approach. Alternatively I could also help to facilitate a one off discussion instead. Please share below if you would be interested in having a dedicated discussion in the near future about this suggested experiment.

Direct communication
If anyone would prefer to chat about this funding process suggestion with me directly then please feel free to reach out to me on Discord - lovegrovegeorge or Telegram - Telegram: Contact @georgelovegrove. Otherwise just throw any questions in the comments below!

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