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 Arbitrum

The Arbitrum ecosystem already provides a number of idea based funding processes which can be found on their grants page. These funding processes are great for people that already have an idea to execute but does not help with situations where developers are keen to join the ecosystem but do not have an idea to execute at the moment.

Experimenting with an open source contributor funding process could simply mean adding in an extra form process to enable software developers to indicate their interest in contributing to the Arbitrum ecosystem as a contributor. These individuals could then help with existing open source solutions being built or new ones that the Arbitrum Foundation suggest to them.

The immediate opportunity with experimenting with a contributor focused funding approach would be that it would make it easier for software developers to indicate their interest in working in the Arbitrum ecosystem. The Arbitrum Foundation could then identify if there are any promising candidates that could be suitable for contributing towards any relevant initiative in the ecosystem. Contributor funding proposals could end up bringing in impactful talent that otherwise might not have got involved due to the more time consuming upfront idea proposal process. The idea process can make it more difficult for these individuals to just express their interest in working in the ecosystem. A contributor focussed process could provide a more collaborative path for identifying promising talent and matching them with ongoing work that could create impact in the ecosystem.

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!


If I understand correctly, this proposal suggests a shift towards funding open-source contributors directly, aiming to address inefficiencies and barriers inherent in idea-based funding within Web3 ecosystems. This approach focuses on reducing the upfront effort required from contributors, simplifying the decision-making process for voters, and fostering a more collaborative and impact-driven environment.

Critical Perspective: Firstly, it’s commendable that the proposal aims to streamline the contribution process in the Web3 ecosystem, potentially enhancing innovation and participation. The focus on direct support for developers highlights a proactive approach to addressing the practical challenges of ecosystem development.

However, there are areas for improvement:

  1. Scalability and Selection: While funding individual contributors can drive immediate impacts, the proposal could benefit from a more detailed strategy on scaling this model and ensuring the selection process remains transparent and meritocratic as it grows.
  2. Measurement of Impact: The proposal could elaborate on how the impact of funded contributions will be measured and evaluated. Establishing clear metrics for success is crucial for the sustainability of the funding model.
  3. Community Engagement: Encouraging a broader community discussion on the proposed model’s long-term implications could enrich the initiative. Gathering diverse viewpoints may uncover potential challenges and opportunities not initially considered.

In conclusion, the initiative is a promising step towards fostering a more inclusive and productive environment for Web3 development. Enhancing the proposal with a clearer framework for scalability, impact measurement, and community engagement can further solidify its foundation. Anyway, thanks for sharing your thoughts. This is an interesting initiative, I think it will find support from the community.


Thanks a lot for the response! I’ll go through each point:

Scalability and Selection
Our suggestion in the proposal is to start with a small number of developers - 1 to 3 is perfectly fine. The first piece of the process that can be analysed and refined with even a small number of contributors is the individual monthly contribution logs. Thinking about how this data is structured and collected is a great starting point to understanding what developers are working on each month. I already have a piece of analysis on the importance of contribution measurability here - Contribution measurability - Disbursement. Starting small is a good way to better ensure that the few developers that do get selected are top performers.

I think it cannot be understated how important contribution measurability is and the opportunity it offers if tools and processes can help to make it easier to record and understand someones contributions.

Assuming the model proves its value you can then start to increase the number of contributors that can be funded. We’re confident this model doesn’t need to prove itself to warrant at least some experimentation as funding people directly is the most adopted incentive process on the planet!

Now a next logical step of evolution is thinking about the tools that help with coordination of these developers to work on different areas. The more contributors you have the more overlap you’ll see with the different areas that they might want to work on. You want an easy and fair way for them to decide between themselves who is working on what. This could become more important at around the 10+ contributor numbers. You also have work around creating tools for showcasing the contribution logs and information about each candidate contributor to the voters if the contributor selection process is being handled by community instead of a founding entity.

Measurement of Impact
I’ve done some analysis on contribution impact measurability approaches, Impact measurement approaches - Disbursement, and the key outcome this analysis came to was there is a big opportunity with getting it right for contributor impact measurement due to how that information can be repeatedly used in the future for contribution selection decisions.

So the starting point is to formalise and really think about how to record the contribution efforts someone makes each month. Having this data means the logs can then be analysed to try and understand what high performance looks like and what efforts led to impact. Now this is obviously not a simple quantitive situation and community and contributor review / voting would become an important part of the solution.

The key thing to know though is that impact and performance measurement of contributors has more useful long term impact due to the fact you can select the same contributors over and over. Priorities and ideas change all the time, so knowing that an idea was impactful is only partially useful for contemplating what future ideas should be worked on as you don’t keep executing the same idea! There’s also a lot of case studies of tech companies who have to review and evaluate peoples performance so a lot of lessons can be taken from these environments.

Community Engagement
Absolutely! More feedback the better. I’ve added a TODO note to think about writing up a piece of analysis that outlines the logical progression steps for how this funding process could evolve over time - I started to highlight some of this already above about starting small and focussing on contribution logs.