Merit: A New Economy for Open Source
Open source software powers the world. From operating systems (Linux), databases (postgres), and web frameworks (React) to languages (Rust), browsers (Chromium), and machine learning stacks (pytorch), the world’s most widely used software systems rely on open source. However, the open source movement has achieved incredible success in spite of a severely broken incentive model, suggesting we’ve barely scratched the surface of its potential.
Open source software relies on two primary sources of funding: 1) VC, which requires a strong return prospect and path to liquidity, and 2) Big Tech, which simultaneously uses open source models to market complementary paid products and thwart competitors. This puts many open source software projects in a precarious position, forcing OSS developers to either work for free and potentially burn out or find a corporate overlord with its own agenda.
Can we do better?
At BCAP, we’ve long been inspired by crypto’s potential to enable large-scale coordination of capital and labor for all sorts of networks beyond money, and OSS development may be among the most fundamental opportunities. Our industry gave birth to DAOs—on-chain organizations that organize capital, govern themselves, and coordinate labor online—but operating DAOs is complex and OSS coordination can be unbundled from liquid governance.
Enter Merit Systems.
Merit focuses on the heart of the OSS funding problem and introduces an incentive model that is simple, objective, and free from messy governance overhead. It measures the value of code contributions and directly distributes capital to developers according to their contributions, creating autonomous incentivized repos. Incentives can take the form of any crypto asset, including stablecoins or a new native token specific to an OSS project. Thus, Merit addresses the full spectrum of OSS needs, establishing a reputation-based marketplace between OSS projects and developers, giving existing funders new tools to leverage the power of their dev communities, and—perhaps most importantly—enabling a new type of autonomous organization specifically geared toward open source software development.
Put simply, Merit has the potential to compound open source software development velocity while improving quality and long-term sustainability. If it realizes its potential, it could forever alter the trajectory of software, leading to faster development and better outcomes.
Co-founders Sam Ragsdale (CEO) and Ryan Sproule (CTO) are both exceptionally talented engineers and BCAP alumni. Longtime friends and collaborators for nearly a decade since meeting at university, Sam and Ryan are a dream team. Sam has roots in software engineering at both BCAP and Google. His most recent position was that of research engineer at a16z crypto, where he helped create JOLT, an open source zkVM for RISC-V. Ryan was a software engineer at AWS before joining BCAP as a research engineer, where he helped spearhead technical research initiatives, make investments, and advise on boards across multiple portfolio companies.
Today, we’re excited to announce that BCAP is co-leading Merit’s $10M Seed round alongside our friends at a16z crypto. We couldn’t be more excited to continue working with Sam and Ryan as they embark on their mission to supercharge open source software development.
Merit is hiring founding engineers. If you’re interested, please reach out!
Blockchain Capital is an investor in one or more of the protocols mentioned above. The views expressed in each blog post may be the personal views of each author and do not necessarily reflect the views of Blockchain Capital and its affiliates. Neither Blockchain Capital nor the author guarantees the accuracy, adequacy or completeness of information provided in each blog post. No representation or warranty, express or implied, is made or given by or on behalf of Blockchain Capital, the author or any other person as to the accuracy and completeness or fairness of the information contained in any blog post and no responsibility or liability is accepted for any such information. Nothing contained in each blog post constitutes investment, regulatory, legal, compliance or tax or other advice nor is it to be relied on in making an investment decision. Blog posts should not be viewed as current or past recommendations or solicitations of an offer to buy or sell any securities or to adopt any investment strategy. The blog posts may contain projections or other forward-looking statements, which are based on beliefs, assumptions and expectations that may change as a result of many possible events or factors. If a change occurs, actual results may vary materially from those expressed in the forward-looking statements. All forward-looking statements speak only as of the date such statements are made, and neither Blockchain Capital nor each author assumes any duty to update such statements except as required by law. To the extent that any documents, presentations or other materials produced, published or otherwise distributed by Blockchain Capital are referenced in any blog post, such materials should be read with careful attention to any disclaimers provided therein.
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