Software development is a unique process with many different motivations, communities, and products that have changed our world in just about every way. While many software projects do take the normal structure of a for-profit company, there are others that simply see software that is needed for the larger community, and they have the ability to create it. Some of these companies take the form of non-profit organizations, collecting revenue to fund the project's development and maintenance. For others, however, the "business model" doesn't even include money for time or expenses. The software is developed because a group of capable individuals have found a way to solve a problem. They coordinate, sometimes from all over the globe, to develop and improve these solutions. Instead of a non-profit, these projects are more akin to a community garden. Volunteers spend both time and money to build something that benefits everyone around them, not to earn a paycheck and not even to earn accolades (many people use the software not knowing who created it). Instead, they just have a passion for creating something useful and knowing they have a part in making the world better. This type of project is called FOSS: Free and Open Source Software.
It says a lot about the society in which these projects exist, and it is heartwarming to know that some of the most important software platforms were created simply because they were needed, not because a startup got lucky with VC funding and made it big. These projects aren't asking for funding, nor are they expecting it.
But what if they were given that funding anyway?
For a FOSS project, the team might be dedicating time and resources to the project, but that doesn't mean the project has no need of funding. It simply means that the team is doing as much as they can with very limited (and all volunteered) resources. This begs the question: What additional benefits could they bring if they had funding to put in the proper time and effort for the project?
FOSS Funding
Though FOSS projects do not depend on funding, they can mean the difference between (best case) additional features, stronger support, and a longer-running project and (worst case) a project that withers and dies as its members need to spend more time on paying jobs (food is, after all, not free). The good news is there are a number of options for project funding available, including GitHub Sponsors, Open Collective, Buy Me A Coffee, and various grant programs. The bad news is that many of the critical FOSS projects are under most peoples' radars. Many people use software projects that, in turn, depend on FOSS, so potential funding for these projects rarely materializes. However, an innovative funding method is gaining ground, targeted specifically for this unique architecture.
Funding Cascades
The key issue with current funding models is that the money doesn't cascade the way the levels of software do. Most software projects are built as a hierarchy, with foundational programs allowing other software to build upon and with the end user software on top where users can interact. For funding cascade models, this hierarchy is used quite cleverly to assign the value each level has contributed to a project and to spread funding out accordingly.
As a heartwarming example, the software project Ratatui, part of the Rust/TUI ecosystem, is an open-source project with a successful team of developers. In November 2023, they received a note through GitHub titled "Donating Funds to Ratatui." The note was from Radicle, a peer-to-peer protocol that utilized Ratatui as a critical dependency. They thanked Ratatui for their great work and said that they were using the funding cascade platform Drips to share the funds from their core contributors. The team looked at the dependencies hierarchy setup in Radicle's Drips page. They found out that they had been set up to receive 10% of Radicle's Drips funding, which equated to $37k. Out of nowhere, a project team that had been using Ratatui and wanted to encourage it to keep building great things sent part of their funding in order to help feed its ecosystem of FOSS projects. In total, 11 different software projects were identified by Radicle and were set up with various percentages ranging from 3 to 20%. Each dollar of funding sent to this fund is automatically split according to the percentages, meaning that as long as Radicle is supported, the core programs helping it to succeed will also be supported. This is the core of funding cascades, and it is an incredibly important, necessary system that also shows just how much people can care about their community's long-term success over short-term money.
Onboarding the best FOSS developers into crypto, one major project at a time 💦 https://t.co/EcgFZfiflD
— Drips (@dripsnetwork) April 9, 2024
Radicle is planning to launch version 1.0, and because it uses the Drips funding cascade, it has a greater chance of a successful launch and long-term growth of its software. With a strong foundation of FOSS projects encouraged to keep building and innovating, Radicle itself can focus on its own innovation.
Final Thoughts
Funding cascades are not natural in the climate of cutthroat capitalism. However, they do embody the foundation of capitalism and compete to succeed; they just do it with the philosophy of "I win when we all succeed." It looks further out than short-term gains and ensures that the entire ecosystem thrives. This makes for a very cheap investment given the returns it brings of strong FOSS software that can be used to build upon. Beyond the money, however, funding cascade projects also creates a very tangible way for projects to show appreciation for the unsung heroes who volunteer their time, resources, and talent to build those tools that no one else is willing to but that everyone needs. It is rewarding for everyone involved, and hopefully, it will be a trend that continues to grow as the software world becomes more and more decentralized across the globe.
