The Tokenization of Open Source

This article explores the different opportunities Open Source software (OSS) projects have within the Dev Protocol ecosystem to provide new economic incentive models. Dev Protocol services Github’s 40M users through our recent integration.

Lewis. The Chronicles of Narnia. Burbank, CA: Walt Disney Home Entertainment, 2006. Pictured is the magical wardrobe which transports the characters to the fantasy world of Narnia.

One of blockchain’s core tenets is to tokenize everything. Tokens can unlock value, easily transfer value, and bridge communities through aligned incentives. Therefore, tokens have the potential to build more efficient and sustainable economic models. Dev Protocol brings these benefits to Github’s 40 million users by allowing them to easily tokenize their Open Source software (OSS). This article will address Open Source’s history, value, and the revolutionary possibilities Dev Protocol brings.

Open Source Software: History and Importance

Linus Torvalds, founder of Linux. Linux is an open source operating system created in the 1990s that underpins much of the word’s technical infrastructure today.

The initial practice of Open Source software started in the late 1960’s. During the late 1960’s tech enthusiasts built their computers at home, from kits, and relied on fellow enthusiasts to share their code in tech magazines. It wasn’t until the Open Source Inititive (OSI) coined “Open Source” in 1998 that the movement started to gain mainstream adoption. The OSI defines open source software as meeting ten core criteria such as free redistribution, easily attainable source code, and no discrimination of persons nor fields. (Open Source Definitions) Simply put, the software’s source code is publicly available, which can be attained, modified, and used by anyone. Open Source software boasts tremendous benefits from wide scale collaboration. Open Source software tends to innovate faster, improve efficiency, have lower costs, is customizable, and often has better security compared to commercial software.

Every internet user interacts with OSS on a daily basis. Linux, Google Chrome, and Firefox are all Open Source projects that are used by over two billion people. Linux is embedded into operating systems all around us such as Androids, TVs, Tesla automobiles, and Nest thermostats. However, since OSS projects can’t sell licenses they must be creative in terms of monetizing their projects. This caveat leads to a large percentage of OSS projects being underfunded. For example, many OSS developers, including notable ones, rely on Patreon and infrequent contributions to sustain their work.

Dev Protocol’s Solution

Dev Protocol introduces “grant farming” for creators and supporters to receive a yield for staking DEV. This framework aligns the incentives of both parties through monetary incentives. Active participants use the DEV token to place value, through staking, on an OSS project. The OSS project then receive a yield on the total DEV tokens staked for their project. The outcome is more sustainable funding for the OSS ecosystem.

Van Gogh, Vincent. The Sower (Sower with Setting Sun). 1888, Arles; Bouches-du-Rhône, France.

Tokenize your Github OSS Project

Waterhouse, John William. Consulting the Oracle. 1884, Tate Gallery, London. The Khaos oracle, developed by Dev Protocol, confidentially authenticates off-chain data to monetize on-chain.

Dev Protocol requires OSS projects to tokenize and authenticate their Github repository in order to participate on Stakes Social. The entire tokenization process takes only a few minutes. Creators simply input the token name, symbol, and supply for their “creator token”. Creators must then authenticate their Github repository by verifying their private keys. This is to ensure that tokens are backed by the designated project and creators have the required permissions to tokenize the project. Dev Protocol developed the Khaos oracle to confidentially authenticate the Github repository’s private keys. Khaos can be integrated into various platforms such as Youtube, Spotify, and Instagram to authenticate creators.

An Economic Framework for OSS

Dev Protocol’s core mission is to tokenize the internet’s assets. This will provide the internet’s open assets with an underlying economic incentive model. These incentives are currently embedded in shares and cryptocurrencies. Why not bring them to Open Source software?

Dev Protocol sends the creator rewards, minted DEV earned from supporters’ staking, to the holder(s) of the respective creator token. Creators can share these tokens with their projects stakeholders such as maintainers, dependencies, or their biggest supporters. Each holder will receive the creator rewards proportional to the amount of creator tokens held. The underlying value of creator tokens is the generated yield from supporters’ staking.

Tokenized OSS projects can receive long-term funding and build underlying incentive models for their projects. For example, when Ethereum eventually outgrew the founding team’s contributions, the Ethereum Foundation, funded by ETH, stepped in to provide grants to new core protocol contributions. Dev Protocol provides traditional Open Source software projects the same opportunity. In this instance, the foundations’ resources are dependent upon creator rewards that give value to the creator token.

Commit Farming

Tokenized OSS projects can now introduce “commit farming”. Commit farming would grant maintainers creator tokens for every commit in masters they produce. Maintainers would receive a portion of creator rewards by holding the creator token. If projects’ supporters increase staking then maintainers would capture the upside. The Enterprise Ethereum Alliance created a concept for commit farming called the EEA Trusted Reward Token (Github) which rewards enterprises for completing deliverables and tasks established by the EEA board.

EEA’s Trusted Reward Token Architecture. Source: EEA Github

Incentivized OSS communities lead to better overall software which results in more usage. Dependents will want to ensure that their dependencies have adequate financing. Therefore, creator token’s value should be directly correlated with the project’s usage. Creator token holders have the potential to trade their tokens on an open market like utility tokens. Maybe in the future Vyper’s token, $SNEK, will be listed on Uniswap.

Vyper maintainer, Doggie, and Je-Meng stumble upon some benefits of Dev Protcol.

Governance for Creator Tokens

A meeting of the Athenian Council aka Boule, in 594. Each of 10 tribes provided 50 councillors who were at least 30 years old. Their most important task was to draft the deliberations for discussion and approval in the Assembly. They also directed finances, controlled the maintenance of the fleet and of the cavalry, judged the fitness of the magistrates-elect, received foreign ambassadors, advised the generals in military matters, and they could be given special powers in an emergency. De Luan / Alamy.

An OSS project’s governance model is very crucial to its daily operations. According to RedHat, the most common governance models are Founder-leader, “Do-ocracy”, self appointed board, electoral, corporate backed, and foundation backed. Each governance model has its own process to define roles, responsibilities, and procedures. Dev Protocol is exploring how creator tokens can implement governance features. For example, creator token holders would vote on leadership, strategy, and possibly even commits. Governance tokens would be extremely valuable for stakeholders including enterprises that depend on OSS repositiories. If Solidity had a token then how much demand would there be to ensure the project is well-funded and led?

Liquidity Mining for Creator Tokens

Liquidity Mining incentivizes users to provide liquidity in order to receive tokens with value. OSS projects can create liquidity mining programs on Dev Protocol to boostrap their funding and incentivize their community. Source: Deribit

Liquidity mining, as the name suggests, rewards participants with tokens that they mine for providing liquidity. OSS projects can introduce liquidity mining, for their creator token, to incentivize supporters to stake DEV. However, OSS projects should find a fair allocation for liquidity mining programs because creator token holders receive the proportional amount of creator rewards. When done right, liquidity mining for creator tokens could drive long term staking and incentives.

Dev Protocol as an OSS “ETF”

Panini, Giovanni Paolo. Gallery of Views of Ancient Rome. 1759, Louvre, Paris. The DEV token can become a gallery that gives meta-governance into open assets and OSS projects.

Dev Protocol could become an ETF for open source software projects and internet assets at large. Dev Protocol can achieve this by implementing a fee to receive an allocation from creator tokens when minted. Dev Protocol’s treasury, which will eventually be controlled by a DAO, would hold the portfolio of creator tokens. This would entitle the treasury to receive DEV from creator rewards and voting power, if creators implement governance for their creator tokens. DEV token holders would vote on how to allocate creator rewards, including to burn them, and receive voting power on OSS projects. This implementation would allow the DEV token to capture a percentage of the protocol’s value, and become a meta governance tool.

Summary

Dev Protocol offers Open Source projects an amazing opportunity to bring underlying economic models to their projects to achieve long-term success. Tokenized OSS projects can create new funding models using Stakes.Social, maintainer incentive models using commit farming, and new governance models using creator tokens. The Dev Protocol team is excited about the future of Open Source software!

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