[Wilduck]

I think this is a really interesting model for providing funding to open source software. There's something about the "Index Fund" approach that is really appealing. I also think it's interesting that the author was both balancing "value" and "risk". I do wonder, if this became a more dominant strategy for providing funding for open source how you would deal with a couple potentially adverse incentives:

1. Publishing the exact formula for funding is great for transparency, but then leads to an incentive to game the system to capture funding. Doing things like breaking your project up into many small packages, or reducing the number of maintainers are not good for the ecosystem but may lead to more funding. Also, there starts to be an incentive to juice download numbers.

2. In general, rewarding "risk" with additional funding seems like it creates an adverse incentive. This seems like a really tricky problem, because lack of funding is a major source of risk. It seems like there could be a pendulum effect here if you're not careful. Is there a way to structure the funding so it encourages long term "de-risking"?

[3abiton]

But the issue is, whatever the criterias are, they will become the main kpis opensource projects (at least the not-so-driven ones) will target for growth. Goodhart's law.

[Wilduck]

I think Goodhart's law only applies if you have fixed, published criteria for funding. That's why I mentioned transparency explicitly. I wonder if you could avoid some of the worst of Goodhart's law by saying something like "the formula changes every year, and we will publish it only after 5 years, but the goal is to reward value provided, and de-risk the ecosystem". The idea being you're explicitly trying to incentivize broadly valuable work rather than specific metrics.

It's a bit like the SEO dance. Publishing the exact formula makes it much easier to game SEO, so instead search engines say stuff like "we're trying to gauge the overall quality of the site, we use metrics like [...] but not exclusively, focus on making good, responsive, accessible content above all else". Obviously it doesn't work perfectly and the more money there is, the more incentive to game the system, but it seems better than the alternative of publishing the exact ranking algorithm.

[leoc]

I think that might be the best strategy: a charity playing Google and being transparent about what money it distributes to whom, but being less transparent about the exact mechanism it uses to calculate the disbursement, or at least being ready to make arbitrary future changes at its discretion to the mechanism to counter gaming (as well as outright zapping clear offenders ad hoc). One nice thing about this strategy is that it could generate a virtuous circle: consolidate together a big enough pot of money from early adopters and you could start getting some good media coverage, which in turn might generate interest and donations from "normie" sources which would never have wanted to be in before then. Similarly and relatedly, IME one of the excuses for low Open Source donations from big US companies is "we have to monitor and audit where all donated money goes, and that's too much overhead". Centralise that work in a big, fairly well-trusted charity to which multiple other organisations can donate and that excuse is hopefully removed or partly removed. It has long annoyed me that the Open Source Initiative never (AFAIK) tried to take on this role, despite having been (at one time, at least) the most obvious candidate for the role.

Of course, the big hazard here is "who watches the watchmen?" But public scrutiny plus the fact that others can jump in and try to take some of the same middleman role might help to keep that risk partly under control.

[pessimizer]

> Publishing the exact formula for funding is great for transparency, but then leads to an incentive to game the system to capture funding.

I say think of it as an authorization protocol, and watch how people break it in order to figure out how to fix it.

[ants_everywhere]

> There's something about the "Index Fund" approach that is really appealing

This is an approach I'm actively working on, although I haven't actively donated anywhere yet.