S.10 Ep.7 Prosperous Software: Rethinking Open Source Funding Through Licensing

The gist

Raymond Chang from Open Source Observer discusses the Prosperous Software (PS) movement, which seeks to create a new class of software licenses addressing the financial unsustainability of open source development. While 99% of companies use free and open source software and 70% of production code comes from open source libraries, developers struggle to find sustainable funding. The proposed Public Prosperity License (PPL) introduces "profit left" obligations—requiring commercial users above revenue thresholds to share a percentage of revenue with their dependencies—while preserving the four fundamental freedoms that make open source valuable.

Key takeaways

• The scale of the problem: 99% of companies use FOSS, 70% of shipped code is open source, yet critical infrastructure like OpenSSL remains underfunded despite powering a $113 trillion economy.

• Three licensing eras exist: the 1980s free software movement (GPL, focused on freedom), the 1990s open source movement (focused on collaboration), and now the proposed Prosperous Software movement (addressing financial reality).

• PPL maintains all four freedoms: users can view, study, modify, and redistribute software—the distinction from "source available" licenses is that PPL doesn't restrict commercial use, only adds revenue-sharing obligations once a threshold is reached.

• Revenue sharing mechanics: At minimal thresholds (e.g., PPL 1%), a Series A company at $1M revenue pays ~$100/year; a $1B company pays hundreds of thousands. Multiple PPL-licensed dependencies would use "max" aggregation (if one is PPL 5% and another PPL 1%, you owe 5% total).

• Collective bargaining power: The strength comes from cohorts of projects adopting PSL together, increasing negotiating leverage and surface area with corporate entities—individual projects have limited power alone.

• Crypto's role: Smart contracts and on-chain payment rails can automate enforcement and reduce friction, making revenue-sharing "trivially easy" to execute without bilateral negotiation, especially as commerce moves on-chain over 5-10 years.

• No self-dealing principle: Funds must benefit organizations outside the donor's control; a company can't simply fund its own subsidiaries and call it dependency funding.

• Founding cohort needed: Chang is seeking 30+ top-tier projects (Layer 1s, Layer 2s, libraries, developer tooling) willing to pre-commit to relicensing together; signup at pgf.ing/join.

Notable quotes

• "Free and open source software is the bedrock of that economy, and it's been growing exponentially with technology ever since. And the fundamental problem here is that the licenses of today do not reflect any of the financial realities of this modern economy."

• "The collaboration monster. Effectively, you know, open source is one of the best collaboration monsters that exist. There is nothing that restricts anybody on the Internet, anywhere in the world, to pick up a piece of software, to modify it, to fork it, to make it better, to redistribute it, to even to sell it."

• "If we start at PPL 1% where one bip basically means if you're at a Series A, a million dollars annual revenue, that's about $100 a year... hopefully small enough that it's not worth the switching costs, and we can start to build that social practice of giving back."

Worth a full listen?

Listen if you're a software maintainer, open source foundation leader, or crypto builder interested in sustainable funding models for digital infrastructure—this explores a concrete legal and technical framework that could reshape how commercial entities support their dependencies.