Crypto Networks Can Overcome Obstacles Open-Source Projects Face, Drips Founder Says

6 Jun 2024

Could the creators of the next Apache, Firefox, or even Wikipedia be out there right now? Recognizing and supporting these builders is essential but often overlooked. Open-source projects form the backbone of our advancement, and I was happy to chat with Ele Diakomichalis, founder of Drips, who is working on their sustainability. Drips aims to empower Free and Open-Source Software (FOSS) through dynamic, real-time support systems that financially sustain essential software projects transparently and effectively.

Ele, can you share a bit about yourself and your background?

Absolutely! I was born and raised in Athens, Greece. While studying applied mathematics, I became interested in technology and moved to Berlin in 2011 to join SoundCloud, a music company, as one of its early employees.

I stayed with SoundCloud for almost seven years, witnessing its transformation from a startup to a platform with millions of users each month. As a musician myself, I understood the value chain of music creation and consumption and was drawn to the promise of disintermediation and returning more value to the creators. It was a fantastic experience, and I eventually became SoundCloud’s Vice President for Data Science and Data Engineering, overseeing the analytics, machine learning, and data engineering teams.

By 2016, however, I realized that many of these Web 2.0 companies claiming to eliminate the middlemen had themselves become the new gatekeepers. Structurally, there was very little difference from the past; artists and communities involved in the music industry still lacked influence over the platforms. This misalignment of incentives led me to explore crypto networks, intrigued by their potential to decentralize and return control to users and creators.

In early 2018, alongside a close friend and former SoundCloud colleague who goes by Cloudhead, we began exploring and hacking on crypto-related projects on the weekends. This led us to found Radicle, a decentralized network for code collaboration, an alternative to GitHub. From the start, we aimed to provide sovereign infrastructure for developers and leverage Ethereum to create new value flows towards them. It was an extension of my desires with SoundCloud—creating a network where infrastructure providers, users, and communities could have their incentives aligned.

In 2021, we decided to spin off Drips from Radicle, focusing entirely on funding open-source software and public goods and pursuing these two products separately.

What are the biggest obstacles to open-source projects thriving over time?

Being both a creator and consumer of open-source software, open sustainability is a big topic for me. Every technologist in 2024, whether they realize it or not, benefits from this vast repository of shared knowledge. This wasn't the case 20 years ago. Nowadays, almost anything you want to develop has a base online that's usually free, allowing you not to start from scratch. This accessibility is something my generation often takes for granted. It naturally leads us to question how these resources we depend on are funded and sustained.

Over the past 15-20 years, there have been various funding experiments around “digital public goods” within the open-source community. Open-source work usually begins with maintainers solving problems they encounter. Initially, money isn't a consideration; the primary motivation is to solve the problem, which might help others if shared. I find this aspect of open-source culture beautiful—but it can present challenges when integrating financial incentives.

A single company could take tens of years to match what open-source communities can achieve. And as these projects grow in popularity and use, there’s a clear need for sustainable funding.

The most common streams are grants and donations. Then, there are acquisitions, where companies buy out maintainers to secure expertise and potentially direct the projects’ futures. Another common model is the "open-core" approach, where the core technology is open-source, but additional proprietary features are developed to generate revenue. While effective, this model can create misaligned incentives, as the focus may shift from improving the open-source foundation to developing proprietary, revenue-generating features.

Each of these models has its drawbacks. Donations and grants lack scalability, acquisitions can lead to governance issues, and the open-core model may cause developers to de-prioritize community-driven improvements. It’s the typical “Tragedy of the commons” problem; people benefit from freely available resources without supporting their maintenance and development. I believe that crypto networks can help us develop exciting new ways to fund public goods and collectively overcome many of these challenges.

Can you share more about blockchain’s role in funding digital public goods?

Building permissionless systems requires transparent and accessible design, and the ability to inspect the software is vital for a chain’s security. Just like open source, web3 benefits from the “thousand eyes” principle, where a broad community actively helps identify and solve issues. If you ever see a blockchain project that isn’t open source, it’s a major red flag.

No other industry or technological movement is as committed to open source as this one, as web3 is almost exclusively built open source. And when you consider that blockchain allows us to design experiments in coordination and value, the potential is incredibly powerful.

Ethereum’s founder, Vitalik Buterin, has been talking about public goods funding since 2015. Personally, the first funding experiment that caught my attention was Dash, a Bitcoin fork. It innovated by splitting block rewards—unlike Bitcoin, where all the reward goes to the miner, Dash proposed a split where 80% went to miners and 20% went to a treasury controlled by Dash token holders, aimed at funding open source projects within the Dash ecosystem. This was like a tax-based system on block rewards. A similar model was adopted by Zcash, which allocated part of its block rewards to its core team under what was known as the “founder's reward.”

Did this inspire your model at Drips?

When we launched Radicle and later Drips, we wanted to try out something similar. Our idea was to channel capital through the dependency graph of open-source software, supporting projects that developers depend on. We recognized the distinct, direct interdependencies in software development, which starkly contrasts with fields like music, where influences may be indirect. We started with a block rewards approach, but by 2021, we moved away from it.

Instead, we built the simplest version of our vision that could actually work: a network where anyone could claim their open-source project and specify the projects and people they depend on, both directly and indirectly. You just register your project on the blockchain and set up how you'd share any incoming funds with your dependencies. This process eventually forms a graph where funds flow through, reaching the deepest levels of the stack. This straightforward setup turned into the core of Drips, placing the web of relationships between open-source projects and contributors at the heart of the user experience.

This resonated well when we launched on the mainnet in August 2023, particularly among prominent developers who appreciated the network's potential to foster an interdependent web of open-source projects. Alongside this, we’ve been actively engaging funders to inject capital into this network, ensuring the graph not only represents dependencies but also facilitates actual financial support. With about two million dollars already circulating and more anticipated, we're excited about the future.

We’re also proposing to funders that if they truly care about public goods, they should financially support the projects they depend on through Drips. This not only supports their immediate dependencies but also benefits a broader network, creating a cascading effect of funding that enhances the entire ecosystem. Such a simple, direct approach ensures funding reaches the deepest parts of the stack, supporting even the underlying frameworks.

I've heard about "Basic Builder Income" in connection with Drips. Could you explain what that entails?

Sure; that’s something quite innovative. We’ve developed Drips as a tool where anyone can easily set up what we call a list in the product. When you claim your project on Drips, you specify your dependencies in this list.

This list isn't limited to just dependencies, though. For instance, if you're managing the "HackerNoon OpenTrust" project, you’d list out the dependencies and decide how to allocate a portion of any incoming funds among them. You could also list the maintainers of your project, essentially creating a dynamic and responsive curation system. This list could be Ethereum addresses, ENS names, or GitHub repos, making it pretty customizable.

What’s exciting is how Funding the Commons used this feature. They weren’t a developer or an open-source project themselves, but they created a list of hackers from their Berlin program to support their open-source efforts. This list allowed them to raise funds specifically for these developers, with the funds being automatically distributed according to the specified splits. As others adopt similar setups, funds can continue downstream to further dependencies, amplifying the impact across the entire network.

Amazing! What are you hoping to achieve in the future?

We’re pushing to broaden the reach of our funding model so every organization can fund their dependencies through Drips. More than just supporting open source in words, Drips allows organizations to demonstrate their commitment through tangible action. I look forward to a future where endorsing open source is as routine as any other standard tech practice—universally expected and respected.

In contrast to individualism, I believe in a culture that recognizes our collective ability to coordinate effectively.

Most current products foster a transactional relationship between the funder and recipient, ignoring broader connections. We aim to shift this perspective by emphasizing our interdependence, particularly in software development.

I look forward to a future where organizations automatically redirect a portion of every dollar they earn back into the public goods that enabled their success. Imagine a scenario where 1% of all revenue supports the open-source software essential to these organizations. Drips aims to build an infrastructure that not only supports individual projects but also sustains the broader commons through a comprehensive economic network.

A challenge we face, though, is the high transaction fees on the Ethereum mainnet, which affects accessibility. There’s a huge potential in Ethereum's scaling solutions, and we are definitely looking into deploying Drips on various Layer 2 platforms to reduce transaction fees and enable new use cases that are currently limited.

One thing that intrigues me is that while we started with open-source software, this model has potential applications in fields like academic research. Similar to software, each academic paper builds on the work freely available before it. Drips could expand to funding in scientific research and other fields. We can’t wait to conduct more experiments soon!