Introducing BugMark

Peer production is one of three fundamental ways to organize human economic activity (Coase’s Penguin, or Linux and the Nature of the Firm, Yochai Benkler (112 Yale Law Journal 369, 2002)), along with markets and firms. It is an organizational innovation where individuals in a networked world self-match to tasks suited to their skills and self-organize to produce goods and services. By harnessing a diverse community of workers, peer production has been used to successfully complete complex projects such as free and open source software. Yet it is the least well-understood, although it underlies billions of dollars in open source software production.

Our survey on open source participation, supported by Mozilla, revealed several insights regarding why contributors may reduce or stop contributing. Survey respondents cited burnout, community hostility, insufficient recognition, the need for more challenging and impactful work, and a lack of funding as some of the reasons. A study by Nadia Eghbal, Roads and Bridges: the unseen labor behind digital infrastructure, points out that the boom in startups relies on digital infrastructure made possible by open source software. A lack of adequate funding and support can result in security breaches and interruptions in service. This real-world problem was anticipated in earlier economics research. In their paper, Open Source Software: an economic assessment, Kooths et al. (MICE Economic Research Studies, 2003) argue that the lack of price signals means that developers do not know users’ valuations. Therefore the supply of open source software goods does not fully align with users’ needs. In particular, the quality level of software goods in the current market appears to be below the quality level preferred by both developers and users. This is a failure of market design and an opportunity to develop improved market mechanisms to promote the creation of software at the higher quality levels that users would prefer.

A new project, supported by Mozilla, seeks to address problems in the efficiency and quality of open source software production. BugMark is a blockchain marketplace for software issues, where participants can trade futures contracts to predict events such as whether a specific bug in a repository will be fixed or whether a vulnerability in a particular software package will be found and disclosed. For example, a user who is willing to pay for a bug fix could enter into a contract with a developer, such that the developer would get the entire payoff if he fixes the bug by the contract maturation date and the user would receive the payoff otherwise. Unlike bug bounty programs, BugMark incentivizes partial work (developers can work on part of the solution and resell their side of the contract). BugMark differs from prediction markets in that it both elicits information and incentivizes task completion. Prediction markets are typically used to aggregate information on events that their many participants cannot influence, and BugMark is designed for fewer participants each with a high level of influence.

The design of BugMark raises several interesting research questions. For example, what are the consequences of introducing financial incentives into peer production? How does our platform compare to existing crowdsourcing and crowdfunding platforms? How can we increase liquidity in this market?

The BugMark prototype is in its early stages — we would love to get your feedback on how it could be improved. You can see a demo of BugMark and participate in live trading sessions at Mozfest, which will be held in London, England, on October 27–29, 2017. Check it out and tell us what you think! If you would like to know more about our project, email me at

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