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Archive for the ‘Gratipay’ Category

The End of Gratipay

Wednesday, December 20th, 2017

Having discussed issues of Free Software funding before, it would seem inappropriate to let the closing down of Gratipay pass unmentioned. Gratipay is a service where people can commit to giving a sum of money at regular intervals for donation to one or more recipients, offering what the service itself calls a “voluntary subscription revenue model” that is perhaps more familiar to those who have used other, similar funding platforms such as Patreon. In effect, creators sign up to receive payments, donors sign up to support the creators, and then the money flows from the latter group to the former, facilitated by the service.

A Quick Primer

The fundamental model of Gratipay is that ”contributors” (donors, “patrons”) support “projects” (recipients, creators) on a weekly basis. Unlike Patreon, where creators are likely to be producing “creations” in a way that best matches artistic and creative pursuits, with the delivery of content to be consumed in discrete parcels, there are no “per-creation” options in Gratipay. Instead, the aim is to provide a reliable source of funding for ongoing work that cannot be so easily split up into chunks and delivered to paying customers one piece at a time.

Another thing that makes Gratipay different to Patreon is the way fees are handled. Patreon charges obligatory fees for handling donations in addition to the other service fees incurred when money is transferred between the different parties. Meanwhile, Gratipay donors are instead merely encouraged to send some of their donations to Gratipay as a way of acknowledging the service’s role and to help fund the service. In addition, Gratipay has always aimed to pass on transaction processing fees “at cost”, with a particularly important aspect of the service’s operation being that it aimed to perform such transactions in an efficient way.

So, instead of charging a donor for the separate transfer of each amount written up against that donor’s different recipients, Gratipay would charge that donor only once per week for the combined total of their donations that happened to be active during that week. And instead of sending each separate donation to its recipient in a distinct transaction, Gratipay would aggregate the donations directed towards a recipient from all its donors and then issue a single transaction to transfer the money. This arrangement would become central in the story of Gratipay and may well have to role to play elsewhere, as we shall see.

The Perils of Payments

In light of recent events, it is particularly pertinent to mention Patreon in the context of Gratipay. Recently, Patreon sought to change its fee structure, justifying it as a way of minimising the impact of fees on creators and the uncertainty around how much each of them could expect to receive every month. This has proved to be controversial, with some people now deciding that they have had quite enough of Patreon’s fees, and with Patreon subsequently deciding to abandon the proposed change.

Part of the motivation for Patreon to rock the boat in this way might simply be to improve profitability and discourage usage patterns that impact profitability, as some people have suggested. Others, however, aware of what happened to Gratipay, suggest that the motivation may involve regulatory compliance. Some may claim that this latter motivation has been “debunked”, and it perhaps isn’t appropriate to speculate in any depth, anyway, but the potential application of specific finance industry regulations certainly was enough to interrupt Gratipay’s operations, in what was known as the Gratipocalypse, suspending those operations for sufficiently long and introducing sufficient uncertainty that it most likely put the service on a course towards its now-impending closure.

Now, non-compliance with finance industry regulation is the kind of very serious matter that cannot so easily be waved away with “good enough” workarounds unless one likes explaining them to a judge, which is why Gratipay took legal advice and changed its operating model. Maybe this has nothing to do with Patreon’s recent actions, but it would be rather cruel if Gratipay, having become aware of such pitfalls, did the right thing at considerable cost to the service and its competitiveness while other, similar services carried on doing broadly similar things – oblivious to such problems, perhaps – cultivating businesses that might now demand more scrutiny.

The Gratipay Legacy

Much of the above is something of an aside to what I really wanted to focus on, however. In bringing this topic to the attention of a Free Software audience, I aim to make the point that Gratipay, being a platform developed as Free Software, should be credited for trying out different approaches for funding Free Software and for allowing others to continue where it left off, to take the platform in new directions, even as it must itself close and send its users elsewhere.

Upon experiencing the Gratipocalypse and regulatory difficulties, the platform was forked to establish Liberapay (by various existing Gratipay developers, as I understand it). Liberapay is a service that is regulated in the European Union. Thanks to that decision to make a transparently-developed Free Software service, the platform can be thought to live on in some way. The cultivation of a durable legacy is surely why many people choose to develop Free Software in the first place, and in this regard Gratipay has perhaps achieved one of its objectives regardless of its own fate.

The fundamental question of how people can be sustained in their activities developing Free Software, outside traditional employment paradigms that is, was explored by Gratipay in a few different ways. As Chad Whitacre, Gratipay’s founder, noted in a blog post, there are many projects in the Free Software universe that make the whole thing viable. However, few of them are likely to see any serious financial investment. Of course, some people might suggest that most Free Software projects are not worthy of any significant investment, that “healthy competition” (coupled to the usual dubious misrepresentation of Darwin’s theories) should decide on the rewards and pick a winner.

It may be a coincidence that in attempting to address this “long tail” problem, Gratipay selected npm (the Node.js package manager) as a candidate to trial better integration between the tools people use and Gratipay’s mechanisms for facilitating donations, effectively letting people discover whose works they make use of and providing them with an easier-than-normal way of rewarding those responsible. A year or so earlier, in a demonstration of how a seemingly trivial piece of software can underpin entire development ecosystems, the deletion of one npm package entry (of many entries controlled by a single developer) caused numerous systems and services to fail, with extensive chaos amongst affected developers and service operators being the immediate result.

Although the npm package deletion fiasco has a number of causes that are beyond the scope of this article, and while one may or may not identify the library responsible for the apparently-widespread breakage as being particularly worthy of sustained funding, it reminds us that there are many seemingly-insignificant building blocks supporting the larger, more well-known projects that are potentially already well-funded. It is also worth noting that Gratipay also attempted to provide mechanisms for the fair distribution of contributions across teams as opposed to focusing on individuals. Recognising that success is usually a team effort is also rather important in a world where celebrity is all too frequently cultivated and rewarded at the expense of those who quietly made that success happen.

One might argue that the conditions for “crowdfunding” people to work on software are very rarely likely to be present. Certainly, the odd Internet celebrity can have a million followers on some “social media” platform or other, and when those followers all chip in a few cents every now and again, the celebrity can focus on whatever it is that they do on that platform. But it takes a lot of small contributions to fund something that resembles a salary. And when the follower demographic for software is likely to be narrower than for random entertainment, it would seem to be a futile task to find a desirable number of donors who might appreciate the value they derive from the software in question and collectively contribute enough funding to pay someone such a salary.

On this front, Gratipay appears to have tried another strategy: to identify those parties who do derive significant value from software and who would be willing to contribute more significant sums. It seems rather obvious, but the people who are making the most money from using software and who are spending the most money, some of it on software, potentially little of it on Free Software, are surely the people to encourage when attempting to secure sustainable Free Software funding. However, this may have been one strategic turn too many, perhaps leading the service in a direction that cannot be pursued with the resources it has at its disposal.

Hiding in Plain Sight

One might well ask whether conventional employment, not the “open work” that Gratipay has aimed to support, is really the mundane and obvious-all-along solution to Free Software funding. Surely, if people want to be paid by others to work on things, then they should be prepared to actually work for the people with the money. And it is true that companies and other organisations can act in sustainable ways that seek to strengthen the foundations shared between their operations and those of others.

But one can also respond to this with observations about conflicts of interests, of developers being hired to not continue working on the Free Software projects they had contributed to, of selfishness and doing things for competitive advantage rather than improving the quality of everybody’s offerings. And of the general inefficiency of recruitment processes these days, meaning that capable developers cannot find positions and yet there are companies almost desperate to identify and hire exactly those developers.

So, as Chad points out in his summary of crowdfunding platforms, the “roll your own” model of accepting donations may be a viable way of engaging with companies directly, at least for projects with sufficient reputational stature. However, let us take the example of one such project providing a technology featuring in many Python job advertisements and surely responsible for a fair amount of money changing hands. Through its supporting organisation, it manages to attract enough funding for just one core developer alongside a number of other activities. It can be debated whether this is an inspiring signpost towards better things or a depressing summary of how much investment in infrastructure people feel they can get away with.

Fundamentally, though, there are projects that just won’t be funded until someone declares a crisis. And even then, the nature of the game is that people will do just enough to avert disaster, throw some funds the way of the overworked maintainers caught in the spotlight, and then carry on as if nothing was really wrong in the first place. Gratipay may not have succeeded in providing a lasting solution to the broader – seemingly less urgent – crisis facing sustainable Free Software development, but we can at least be thankful that a group of dedicated people tried their best to explore some of the options and, through their commitment to Free Software licensing, have allowed others to carry on the work they started.