Crypto’s open-source culture risks projects shutting down — here’s a solution

• Crypto relies heavily on open-source development.
• But that approach comes with its pitfalls like financial shortfalls, leading to the shutdown of some valuable projects.
• To counter this, protocols like Drips enable projects to financially support the open-source projects they depend on.

Open-source code forms the backbone of the crypto ecosystem. Making your lines of code publicly accessible and free for anyone to use is the default choice of developers.

From blockhains like Ethereum to lending protocols like Aave, much of the $1.2 trillion crypto market wouldn’t exist without developers choosing to make their code open and free to use.

While the culture of making code open-source in crypto has allowed the industry to develop and innovate at breakneck speed, it also comes with problems.

Not all projects are easily monetisable, though they are still valuable for industry participants. And without funding, they risk shutting down, affecting other projects that depend on them.

Some projects have even had to shut down because bigger corporate rivals have swiped their code.

“Sadly we cannot outcompete multibillion VCs who copy-paste our architecture and code (open-source, right?),” tweeted Artem Vorotnikov, the creator of Ethereum node Akula, before shutting down the project in November.

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Such frustration has become commonplace, potentially undermining the crypto industry’s commitment to open-source as the default development pathway.

“One of the worst tech trends of the past decade has been corporate co-option of open-source software communities,” Miroyato, co-founder of decentralised file-sharing platform Fileverse, told DL News. “Big tech companies have corrupted commons-based peer production.”

But crypto is now developing home-grown solutions to the unintended consequences of its open-source culture. The objective is to keep the open-source spirit alive and to prevent more projects from shutting down.

Keeping crypto’s open-source dependencies alive

One of those solutions is Drips, a protocol on Ethereum that lets organisations and individuals provide funding to their “dependencies” — open-source projects they depend on. It’s based on a pay-it-forward model, and the funders get to decide how much funding they want to provide to otherwise free projects.

Drips launched on Wednesday its v2 — a second version of its app. It’s completely free and permissionless — anyone can use it without restrictions.

“Open-source is very important for crypto because it’s what made crypto happen in the first place,” Drips co-founder Eleftherios Diakomichalis told DL News in an interview during the annual EthCC conference in Paris last week ahead of the launch of Drips v2.

Potential solutions like Drips have been bandied about in other formats: In the non-crypto tech world, GitHub lets users sponsor open-source developers, but the process involves joining a lengthy waitlist and is not supported in all countries. There are also other initiatives like Open Collective and Back Your Stack.

Drips differs from those in that it is completely decentralised and trustless, letting anyone with an Ethereum wallet or GitHub account get paid for their open-source contributions. Projects can use the Drips toolkit to automatically stream a portion of their income to the creators of the open-source code they depend on.

The whole process happens on-chain, so it’s easy to see who’s funding who. Diakomichalis said he wants Drips to “create a new cultural norm” where it becomes commonplace for blockchain projects to fund their dependencies.

“We have something where you can showcase on-chain that you’ve been acting as a good actor,” Diakomichalis said. “Then it also tries to leverage this network aspect of software to have funds drip down the software dependency tree. That’s where the idea of the name Drips comes from.”

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He proposed using Drips to allocate $1 million to the key dependencies of organisations within Radworks DAO, the recently established community-governed network supporting Drips and Radicle.

The hope is that by encouraging and making it easier for developers to kick back a portion of their profits to their dependencies, open-source projects will not only survive but flourish, securing them as so-called “public goods” that benefit all developers.

Diakomichalis understands better than most the potential of breaking down barriers for creators. After a six-year stint as a data scientist at SoundCloud, he co-founded Radicle, a peer-to-peer code collaboration network built on top of Git. Radicle helps guarantee access to code repositories without relying on third-parties.

Catch-22 of closed-source software

Encouraging developers to make their code open-source isn’t just important as a public good. It can also increase its value.

One event which highlighted this recently was the Atomic Wallet hack in June. Hackers, believed to be part of the notorious North Korean crime syndicate Lazarus Group, stole north of $100 million after bugs in the wallet’s code allowed them to gain access to users’ funds after breaking into Atomic’s systems. Unlike most code in crypto, Atomic Wallet’s was closed source, meaning nobody could view or audit it independently.

“You have the other benefit of open-source, which is this idea of 1,000 eyes,” Diakomichalis said. “If you have 1,000 eyes on a piece of software then you have a lot more confidence that it is secure, that it does not contain bugs and stuff like that.”

However, Diakomichalis also said he understands why developers like those behind Atomic Wallet chose to keep their code closed off.

“What probably happened is that they developed a piece of technology and they were like, ‘we want to monetize this and live off this, we want to have a way to make this self-sustaining in the future,’” he said.

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But in the end, the decision to keep Atomic Wallet’s code secret meant that critical bugs went unnoticed.

This kind of Catch-22 problem is, according to Diakomichalis, exactly what Drips is trying to solve. “The work we do tries to create incentives for people to actually release their work in public,” he said.

Elsewhere, Uniswap Labs also received criticism earlier this year after it released its new “v4″ version under a business source licence instead of making it open-source. While anyone can view Uniswap v4′s code to check for bugs, they cannot currently use it themselves without explicit permission from Uniswap Labs.

The decision cast doubt on Uniswap’s commitment to the spirit of open-source development and public goods to which it owes much of its success.

But Diakomichalis and others like him are fervently optimistic about the potential of a truly open-source digital landscape. He contrasted it with development outside of crypto, where keeping software closed-source is still the norm.

“Crypto is one of the first few industries that’s almost exclusively open-source,” he said.

“I think it has cultural implications that I believe will eventually be understood.”