This post discusses approaches to Sustainability and Business Models that the OpenData Community may take.
It errs on the side of being comprehensive - following the approach of MECE - in order to acknowledge the breadth of approaches that may be possible.
As explained below, there are many potential business models, most of which are more likely to be pursued by related entities as opposed to the OpenData Community itself.
Demonstrating value vs. capturing value:
We remain focused on demonstrating the value we add to the broader web3 ecosystem by defending web3 from the related threats of:
- Sybils and other fraudsters
- Centralization at the data layer
We have started to demonstrate this value through hackathons and other activities that have been well-received and have helped to protect recent public goods funding rounds by Gitcoin and other users of the Gitcoin protocols. Overall, our value to the broader community, ranging from tactical to strategic value, includes:
- Developing and selecting algorithms that are proven to find Sybil and similar behavior
- Packaging these algorithms into Legos that are easy to understand and share
- Presenting the results of these Legos in Dashboards that can be used by round operators and their communities to assess the success of their grants and other activities
- Educating a growing group of data scientists and developers on approaches to finding fraudulent behavior while using decentralized data infrastructure and tools such as TrueBlocks, Pocket Network and Ocean Protocol
- Creating a transparent and objective method of assessing and qualifying values aligned data scientists, analysts and developers - the Regen Rangers
- Supporting Sandbox projects that provide Dashboards, Legos, and algorithms as software that can be used to assess and manage both funding rounds and grantees
- Building and running open data infrastructure for use by the OpenData Community
We are also considering adding to the above activities additional work that builds off of our capabilities, such as:
- Running and maintaining ETL and Indexing for useful data sets. These would be run on decentralized infrastructure and the pipelines would be open source. This work could be in collaboration with other existing efforts such as those related to Blockchain ETL or those recently announced by Paradigm Capital.
- Contributing to data infrastructure and transformation for an open governance initiative
None of the above activities is gated in any way. All of them are dedicated to building public goods that can be consumed freely.
That raises the question of how the OpenData Community can achieve sustainability.
Achieving Sustainability by Capturing Value
As the phrase “capturing value” suggests, there is an inherent tension between growing the value of public goods and, in some way, capturing some of the value created. As a community dedicated to building Public Goods we must find ways to achieve sustainability without undermining the value of the Public Goods themselves.
The following are some approaches we are considering, starting with a handful that are already in use:
So far all staffing in support of our Hackathons has been funded either by our founding sponsor Gitcoin, or by volunteers, or by volunteers competing for bounties in the hackathon itself. In all cases this has meant that we did not spend all of the amounts we budgeted for hackathon expenses, leaving a small (~10%) operational surplus.
We believe that the OpenData Community and Sandbox projects themselves could be attractive candidates for Grant funding from a number of organizations in the web3 ecosystem.
Founding Partner funding:
Similar to Grants funding, we are discussing with a handful of aligned projects a relationship whereby they will continue to provide monetary and guidance and in return would be members of the governance of the OpenData Community. This vision is outlined in a variety of locations including our overview slide deck in which we discuss a bicameral governance model.
Aqueduct and percentage of revenues from Sandbox and professional services organizations:
As the Sandbox projects coalesce and are used by a broader range of users in addition to our own hackathon participants, it is likely that these Sandbox projects will become independent entities and will themselves seek to achieve sustainability. The options for Sandbox projects seeking sustainability may include:
- Early stage:
- Grant funding including from the OpenData Community itself and from projects that may use the Sandbox projects and others
- At MVP - when broader usage seems possible:
- Support services for the Sandbox project itself
- Running the Sandbox project as a service - SaaS like
- Could be either multi-tenant or per-user deployment and operation
- Dual licensing
- Some enterprise users may not be in a position to adopt public licensing and would prefer an enterprise license so that the Sandbox entity would be required to contribute back as opposed to the enterprise
- Related software licensing
- Closely related to the above, it may be that certain utilities and other complementary software that are not logically a part of the Sandbox project would be required by customers
Similarly, other organizations such as members of the Regen Rangers may form squads or guilds to offer services to grant round operators or possibly buy-side investors for due diligence to surface wash trading. These services could themselves be priced in a variety of ways including fixed-price services, per-hour services, and as a percentage of a completed round.
Providing near real time access to curated data sets via open source ETL:
One idea that has recently emerged is for the OpenData Community to potentially take on the support and additional development of a number of open-source data sets and related ETL pipelines. If the OpenData Community takes on this responsibility, potentially incorporating some of the existing work on going from major supporters of web3 such as the Blockchain ETL project and Paradigm Capital - there may be an opportunity to also offer a version of the data feeds as a service to interested parties, possibly through the use of Data NFTs from the Ocean Protocol
In all of the above cases, organizations using and building upon the OpenData Community whether Sandbox projects, Regen Rangers offering professional services or otherwise - the OpenData Community will be requested on a sliding scale basis that a percentage of the total revenues or token distribution or otherwise of these organizations be shared with the OpenData Community. This approach builds into these relationships an alignment of interest while also ensuring that the OpenData Community achieves sustainability.
The founding team at the OpenData Community has created a simple budget and set of projections for the next two years that calls for approximately $250,000 in total funding to achieve sustainability. This funding is in addition to donations to the Hackathons because approximately 95% of the amount collected for Hackathons is paid out in the form of bounties.
The $250,000 includes all of the funding sources outlined above including funding returning to the OpenData Community from related organizations such as Sandbox projects and professional services offered by Regen Rangers.
This $250,000 will enable the OpenData Community to continue to grow rapidly over the next two years. Specific milestones include:
- Quarterly hackathons
=4 sandbox projects per year
- Growth of Regen Rangers to:
100 candidates that have achieved all requirements
35 that have also completed their pledge and tenure requirements and have been voted into to the Regen Rangers
- Sufficient ongoing funding from all sources with at least 66% of the funding ongoing in nature via hackathons, related organizations committing to providing a percentage of their revenues to the OpenData Community, and any other ongoing revenue sources that are predictable and repeatable; the remainder of the funding gap could be filled by grants and other donations
The rapid growth of the OpenData Community including very successful recent hackathons and overall interest in our goals suggests that there is a large and growing need for an organization to defend web3 from fraudsters and from the risks of centralization at the data layer.
The strong preference within the OpenData Community is to retain our focus on the creation of public goods, relying largely on related organizations to assist us in capturing the value we and our collaborators create and deliver to the ecosystem. In order to achieve sustainability within two years, we are seeking approximately $250,000 in funding from founding partners and all other sources including grants.
We are enthusiastic supporters of the potential of related organizations to themselves become commercial entities and will continue to collaborate with these and other organizations that are aligned with our mission.
- thank you to members of the community for feedback including @sarob who provided edits; any mistakes are my own fault