by Adam Jonas

Categories

  • bitcoin
  • funding
  • grants

Over the past few years, the bar for funding has been a moving target. Prior to 2019, finding full-time funding for open-source bitcoin development was quite hard. That summer, we gathered a few brave souls in New York and went as far as hosting a demo day in the hopes of finding them financial support for their open-source work. It took months for many of them to find support. That was three short years ago and it was a totally different funding climate back then. Blockstream, MIT DCI and Chaincode were the only games in town. Xapo had one and Coinbase had one employee that worked on open-source. That was about it.

Then Square Crypto showed up. Not only did they poach BlueMatt from us to lead an internal team, but they also launched a massive grant program. OKCoin and BitMEX spun up their programs soon after. Peter McCormack pressured Coinbase and Gemini into the mix. Brink started their grant program. By 2022, giving was normalized and now we find ourselves in the position where there much more funding available. I have personally shifted more of my effort towards projects focused on enticing novices to join the ranks of bitcoin devs (see Summer of Bitcoin and Qala) because our recruiting pipeline is quite poor.

Disclaimer: Chaincode doesn’t give grants. It’s a challenging process and my gratitude goes out to all the grant programs that are doing their best to get this right. I wrote more about the giving side of things here.

Do the work and good things will happen

Bitcoin funding is different than other open-source and other cryptocurrency projects. Getting a grant in bitcoin is pretty straightforward. You either need someone to vouch for you, or you need to do work – ideally both. While grant programs often have open applications, the secret to getting funding isn’t much of a secret. Start doing the job for free. It establishes you as a contributor and proves your motivation to do the work. It shows that you are a good investment. Applicants will have much more success if they do the work and then apply. For most jobs, the applicant is trying to convince the employer that they are capable of doing the job. But the job-seeker has no idea what the work or environment is actually like. In open-source, one doesn’t have to guess. Do the work. Demonstrate capability. Then ask for support.

Doing the work also means demonstrating your work. Not all work in open-source work is as visible as writing code. The less visible work isn’t less valuable, but it’s in your best interest to create artifacts of your effort. Transparency is your friend. If you learn something, it’s helpful to codify it by writing a blog post or keeping a running log. I’ve seen some write a bi-weekly summary email tracking their progress. Code reviews used to be hard to track, but now GitHub does a better job crediting a green square. Taking long walks to reflect on how to approach a problem is necessary, but writing up your conclusions in a public place is valuable collateral that can forever serve as evidence of your progress.

How much to ask for

The round number people tend to use is $100,000. This simplifies the process for grantors, so they don’t have to make judgment calls on your standard of living or life circumstances. Some programs will adjust their grants based on need. $100,000 in San Francisco is very different than $100,000 in San Salvador. This requires more effort from both the grantor and the grantee to find the number that makes sense. It is also standard for most programs to allow you to take grants from other sources, but some require exclusivity. This is to prevent situations where people have stacked grants to the point they are making a higher than industry salary, which can appear greedy. I think you are usually fine if you are as transparent as possible with your needs and where you expect to source money.

Sustainability

The goal of these grant programs is not to make you rich. If you are looking for financial upside, going the grant program route isn’t for you. The list remains short of full-time roles for bitcoin open-source work, but they do exist. Grants are typically 12-month terms, but it is fair to ask about grant length and the renewal process. The majority of the grant turnover I see is not driven from the grantor side – usually, either the grantee quits to do something else, or they move to another sponsor because of better terms or to associate with a grant program with a better reputation.

Grants are not employment

If you live in a part of the world like the US, where health care or other benefits are tied to full-time employment, you need to take that into account. Many of these benefits can be purchased, just like any self-employed freelancer might do, but they can be a significant expense.

Depending on your jurisdiction, it might be advantageous to receive the grant through an entity like an LLC or corporation rather than as an individual. This approach may increase your privacy and reduce your tax burden, but it is very much based on your country. If you have questions, you should talk to an accountant.

Association with Grantors

Grantors usually will want credit for their gifts. Some grant programs are actually managed by, or work closely with, marketing departments. You should expect that they will publicize your grant with a blog post or tweet. Some will also require that you will write a blog post or two during the term of your grant. If you are giving public talks, it’s also customary that you might thank them for their financial support on an opening or closing slide.

There is some level of prestige among the different programs. Most of this is based on the sponsor’s standing in the community. Jonas Schnelli got some flak for taking money from Marathon Mining when their company policy was to censor transactions. For me, there are two ways to look at this: 1) By taking money from a source, it could be interpreted as an implicit endorsement of their business and role in the community or 2) taking money from a less-than-ideal source could be seen as reparations or their attempt at gaining goodwill with the community with money. In other words, taking tainted money and turning it into good. Obviously, it’s not so black and white, but if you are foregoing financial upside to work on open-source, you probably want to think about where you fall here.

Pseudonymity

Grantors need to ensure their money isn’t going to a supervillain to protect themselves from legal and reputation risks. As of writing, Spiral leads the way regarding policies surrounding open-source grants for pseudonymous contributors. Other sponsors also offer support for pseudonyms, but I don’t know the details of what level of personal identifying info they may require.

BTC or USD

Some programs offer grants either dominated in fiat, bitcoin, or both. This can go very wrong. We are all here because we believe in bitcoin and have high hopes for its future, but bitcoin hasn’t yet arrived. If you can’t cover your bills because of a market price crash, now you are back to worrying about funding. Please don’t be irresponsible with philanthropic money given to you to create public good.

Where the gaps remain

If you have a family, doing work for free is difficult. If you are from a culture where open-source devs aren’t celebrated, this is a hard road to justify to friends and family. Part-time contribution takes a long time. But all of these paths are possible. I’ve seen them done.

If you want to work on open-source bitcoin, I’m happy to talk.

Thanks for Josie and Jarol for the review and feedback