### Introduction

Funding Free and Open Source Software (FOSS) has always been a crucial concern for the sustainability and growth of the FOSS ecosystem. While the capital problem is widely recognized and various approaches have been explored, the lesser-known information problem presents its own set of challenges. In this discussion, we will delve into the two facets of funding FOSS, examining how they intersect and influence each other. We will also explore different solutions within the crypto space and discuss our work with Drips that aims to effectively address both the capital and information problems.

### The Capital Problem

The capital problem in FOSS is well-understood. FOSS projects require funding for various purposes, such as development, maintenance, security audits, and infrastructure. Without adequate funding, FOSS projects may stagnate, become unmaintained, or even cease to exist. Traditional methods of funding, like corporate sponsorship, individual donations, and grant programs, have been employed to bridge the capital gap. While these methods have been successful to some extent, they often suffer from issues such as donor fatigue, short-term funding, and lack of transparency in fund allocation. FOSS projects may struggle to secure consistent and sustainable funding, leading to instability and uncertainty.

### The Information Problem

The information problem in FOSS is less explored but equally critical. It revolves around the challenge of determining which FOSS projects deserve funding. With thousands of FOSS projects available, donors often lack the necessary information to make informed decisions. This can result in capital being allocated to projects that may not have the greatest impact, while more deserving projects are overlooked.

### Looking at Crypto Solutions through the Information Problem

In recent years, the crypto space has introduced innovative solutions to tackle both the capital and information problems in funding FOSS software.

**Gitcoin:** Gitcoin's approach relies on donors voting with their money. Donors contribute to a funding pool, and projects compete for these funds through a quadratic voting mechanism. This system enables the community to signal which projects they consider most valuable. However, it doesn't directly address the information problem, as it relies on the wisdom of the crowd without ensuring that donors have the necessary information to make informed choices.

**RetroPGF:** RetroPGF introduces a system where badgeholders, individuals who have contributed to the FOSS ecosystem, vote on projects they believe have had the most impact. While this approach leverages the expertise of those involved in FOSS development, it still relies on subjective assessments of impact from a number of actors and doesn't directly address the information problem for potential donors. Solutions like OS-Observer are currently explored in order to help badgeholders assess the impact of each project.

ProtocolGuild: ProtocolGuild charts a distinct course, emphasizing transparency and simplicity. Comprising Ethereum contributors dedicated to enhancing incentives around stewarding the core protocol, they maintain an on-chain membership registry. Using just an ENS name for simplicity, this registry allows ecosystem sponsors to directly fund the collective and the public goods that it stewards. The guild self-organizes, requesting funding from donors based on their impact and transparently distributing it to their members. This simple approach instills confidence and legitimacy among donors.

### Drips

Drips takes a different approach to address both the capital and information problems in funding FOSS. In the Drips model, each funder specifies their direct FOSS dependencies. When these dependencies are onboarded to the system, they are also required to list their dependencies, creating a network or graph of dependencies. So instead of relying on the wisdom of the crowd, Drips directly relies on the legitimacy of individual projects to assess and channel incoming funds to the projects that impact them the most directly. Another way to think about this concept is that Drips places its reliance solely on a select group of individuals (the maintainers of a FOSS project) who possess the most comprehensive information and contextual understanding of what impacts them the most.

Every time capital flows through this dependency graph, it effectively cascades where it matters most through a redistribution and splitting system. This means that funding naturally flows through the FOSS ecosystem, guided by the interconnectivity of projects. By mapping out the intricate web of dependencies, Drips helps ensure that capital is directed toward projects with the greatest impact. Moreover, Drips operates on a transparent and permanent ledger, which enhances transparency and accountability. Projects engaging in selfish or manipulative behavior risk losing legitimacy and, consequently, their funding.

### Trust in Humans

In the realm of funding FOSS software, the challenge of capital is unmistakable, but it is the often-overlooked information quandary that holds equal importance. The crypto space has introduced innovative solutions like Gitcoin, RetroPGF, and ProtocolGuild to navigate these intricate challenges.

Our work with Drips presents a distinct approach, where efficient capital allocation is underpinned by the profound belief that humans will naturally make the right choices when the environment empowers them to do so.

Rather than relying solely on the collective judgment of a broad audience, which often falls short in addressing the information problem, a more effective solution may revolve around a smaller, more informed group of individuals—specifically, the maintainers of FOSS projects—engaging in deliberations about what holds the most impact for their projects. This approach can potentially offer a superior remedy to the information problem, bringing clarity and focus to the allocation of resources in the FOSS ecosystem.

With Drips, our aspiration extends beyond merely establishing a funding mechanism; it seeks to create a paradigm that reinforces the fundamental principles of FOSS. By ensuring that resources find their way to where they can have the most substantial impact, Drips fortifies the entire FOSS ecosystem. It does so with the conviction that when equipped with information and transparency, humans are inherently inclined to make the right decisions.