Open-source software (OSS) is largely considered to be a public good – a commodity or service that benefits and is accessible to everyone because it fulfills an essential need. OSS is the foundation of decentralized applications (dApps) and services that are building a future where everyone has control of their data and assets.
Even though today’s open-source developers are generating substantial economic value, it’s difficult to monetize the creation and maintenance of open protocols through traditional methods. Today, however, blockchain technology facilitates new incentive structures that support OSS and accelerate Web3 development.
Quadratic funding (QF) is one such incentive structure for democratizing digital public goods funding based on community support. Gitcoin, a double-sided marketplace for hiring talented OSS developers, has created what CEO Kevin Owocki called “the largest QF mechanism on the planet” with Gitcoin Grants.
Gitcoin Grants’ QF algorithm allocates pooled donor funds to OSS projects based on their individual crowdfunding efforts. “The kicker is that the QF algorithm doesn’t just take into account how much money each project raised during the crowdfund. It takes into account how many people supported each project,” Owocki told Chainlink Today during Gitcoin Grants Round 9, which awarded $500,000 from 15 donors including Chainlink.
Having cited QF as a “key reason” for its support of Gitcoin Grants’ previous rounds, Chainlink recently announced it will be a matching partner for Round 10, set to run from June 16th through July 1st, 2021.
“Our financial contributions will go towards the development of Ethereum infrastructure that the Ethereum community has deemed most important via Gitcoin’s quadratic funding model,” Chainlink’s official announcement said.
“By democratizing funding, Gitcoin incentivizes developers to build key infrastructure and tooling such as open-source programming libraries, lightweight Ethereum clients, new Ethereum 2.0 implementations, more reliable monitoring tools, new testing suites and deployment tooling, and more.”
The continued growth of global use cases for hybrid smart contracts – including decentralized financial (DeFi) protocols that offer superior yield and transparency, parametric insurance products that democratize economic destinies and carbon credit systems that incentivize regenerative agriculture – marks a growing demand to fund OSS projects valued most by the entire Ethereum ecosystem.
“Ultimately, the capabilities of on-chain applications are dependent on the underlying infrastructure and tooling available to developers. Hence, why we are actively supporting infrastructure projects on Ethereum through the Gitcoin program,” said the Chainlink announcement.
Participation in successive Gitcoin Grants rounds is part of Chainlink’s broader objective to provide direct financial support to hybrid smart contract developers through bug bounty programs, hackathons and the Chainlink Community Grant Program, which funds development teams and researchers, such as UNICEF-backed startups, who are accelerating the mainstream adoption of hybrid smart contracts for the greater good.