Number Go Up - The Daily Gwei #161
Don't miss the forest for the trees.
Price/speculative talk is everywhere in crypto and it’s especially prominent during bull markets for obvious reasons. As Eric notes below, some people tend to get annoyed by this chatter but I think this is missing the forest for the trees. More money entering the ecosystem and prices going up is a huge net positive for the entire space and we should always welcome it.
Alright, so why is it a net positive? Well for starters, developing open source software (OSS) outside of crypto has been mostly done for free for decades and usually the developers are simply building this software as either a passion project or because it doesn’t exist yet and they want to use it themselves. In saying this, the impact of OSS cannot be understated - it currently powers most of the worlds technology from platforms like Android and Linux more generally to much of the worlds server infrastructure. And of course, blockchains such as Ethereum and Bitcoin are fully open source.
Since crypto took the stage we now literally have billions of dollars flooding into the development of OSS. This is because the incentives have now changed as you can monetize OSS within crypto off the back of all of the speculation. This is done in a few different ways - projects can issue a token, charge protocol fees or teams can offer consulting services to other projects. A clear example of speculation funding OSS is the Ethereum Foundation’s treasury which currently holds ~450,000 ETH ($533 million worth). For every $1 increase in the price of ETH, the foundation has another $450,000 to put towards Ethereum development and the compounding effects here are enormous. Of course, the EF isn’t the only party with a treasury that’s denominated in ETH or another token - there are plenty of projects in DeFi that have treasuries to pull from as well.
I’d be remiss if I didn’t mention one of the best (if not the best) non-speculative ways that we currently have on Ethereum to fund open source development and that is, of course, Gitcoin Grants. During the matching rounds open source developers are able to raise money from the general crypto community as well as have these donations matched by various funding partners. Now, here’s the kicker, these funding partners are able to donate these large sums of money because of all of the speculation on the various coins/tokens within crypto!
I think we’re entering a new era of OSS funding and we really have only scratched the surface as the “traditional world” doesn’t even know that this stuff exists yet. I also believe that as crypto continues to evolve we’re going to see many, many different industries& companies disrupted by it and one of the main reasons will be because its all built using open source software on neutral platforms.
Have a great day everyone,
Anthony Sassano
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All information presented above is for educational purposes only and should not be taken as investment advice.