Open Work — 2023 Thesis

What does the future of work look like?

It’s a big question. Many people probably wish it would disappear altogether.

Fortunately that is not how we see it play out.

We do however have a strong conviction that a lot of the facets of “work” will change over the coming years. From rewards & incentives, to the actors performing the work, to the structural employment frameworks. We believe that in the coming decade we will see a high penetration of liquid job markets through multiple industries, with a flexible workforce (both human and machine) that contributes to multiple projects/companies based on their passions or interests and that gets upside in their creations.

The status quo — today the large majority of work is done in hierarchical top down organisations. Employees with fixed jobs, rigid hiring processes, fixed salaries, some benefits and possible (but limited) upside in the business via equity. This not only leaves little alignment between employees and employers, but more importantly limits creativity, passion projects, cross project contributions and ends up rewarding mediocrity. The communities that often make the content / social / viral spread of products get an even shorter end of the stick: no incentive for their content creation and curation beyond their social clout, no upside for early adopters, no ownership of their data or creations. We firmly believe that this is not just an unjust set-up, but also a set-up that inhibits the unleashing of the full potential held by large communities & builders with common interests and passions.

Initially slowly and then rapidly, we will move away from siloed organisations with top down hierarchies giving orders and commands on what needs to be done on any given day. These organisations won’t fall away because of employment laws or other top down enforcements, but rather because they will in many cases have a significantly less motivated workforce at their disposal and will end up producing inferior work and face slower development. They will be rivalled by grassroots movements and organisational structures that stem out of groups of people with common interests and hobbies who can permissionlessly contribute to products, protocols, codebases and companies, with much clearer incentives and upside in the work they produce.

Chris Dixon famously stated in his 2013 blog post that “what the smartest people do on the weekend is what everyone else will do during the week in ten years’’ — ten to fifteen years ago some of the smartest people we know where spending their weekends contributing to obscure codebases for digital internet money, training ML models on small datasets or simply building modded environments for their favourite games. Today these are all well rewarded activities or jobs performed by millions of people.

Taking a step back, it’s worth looking at the history of open source software development, of community driven knowledge repositories such as Wikipedia, Reddit and Stack Overflow and of gamers forming modding communities.

1. There is an abundance of literature documenting how open source developers were able to take on the tech giants of the past three decades and build the most important infrastructure of the web. Eric S. Raymond’s essay turned book “The Cathedral and the Bazaar: Musings on Linux and Open Source by an Accidental Revolutionary” depicts the benefits of the bottom up approach of building in public popularised by Linus Torvalds when building the Linux kernel — with the central thesis reflecting that it is the vast number of voluntary contributors that made the method so effective: “given enough eyeballs, all bugs are shallow”.
2. From Wikipedia to Reddit to Stack Overflow, some of the internet’s most valuable knowledge bases are largely being created and maintained by various groups of unpaid contributors permissionlessly coming together and coordinating on very specific topics. In an interesting analysis [1] from the late Aaron Swartz, he counters Jimmy Wales’ view that the core of Wikipedia’s content came from 500 frequent contributors — instead, he showed that the majority of content contributions came from a very large base of non-regular contributors with expertise in one or two subjects. And just like that, a grassroots community of contributors with little incentives have built the world’s most comprehensive knowledge base well beyond what any single encyclopaedia can cover.
3. Some of the most popular games of today have sprung out of modding communities — unpaid but passionate gamers who want to let their imagination dictate the rules of their games and end up building more successful games than multibillion dollar studios could. Certainly the most successful new competitive game genres in the last 20 years have all come from modding by the community in their free-time:
4. Tactical Shooters (CS from Half-life, TF2/Overwatch/Valorant from Quake)
5. MOBAs (Dota/LoL from Warcraft III)
6. Battle Royale (Fortnite/Apex Legends/CoD Warzone from Minecraft and Arma II)
7. Auto battlers (Teamfight tactics from Warcraft III and Dota 2)

Today even the biggest tech giants have realised they need to build some of their infrastructure in public, with the contributions of open source developers from across the globe. The most powerful LLMs are built in the open — not just for goodwill, but simply because the likes of Meta and Microsoft realised that they could not compete with open source communities and they are better off co-opting the outputs of these open source communities. By open sourcing their own development, they not only accelerate their own progress, but also decapitate the ability of other players to monetise their closed sourced solutions.

We have already seen some great improvements on how builders and communities are coming together in the Web3 ecosystem — from largely open source development of all major protocols to permissionless participation in development, improvement and usage of products. But most importantly, we have found a novel method to incentivise and align both core and external contributors, community members and product users: by accruing the value generated by a product or protocol into a cryptographic token. These tokens are an additional tool in our arsenal of incentives, but are infinitely more modular and granular than simple salaries or rather rigid stock option plans.

But for a vision of liquid job markets with granular incentivisation based on contributions to really become a reality, we are still missing a number of tools ranging from identity layers to payment methods to coordination platforms for maintainers.

We recently backed the fantastic team at OnlyDust working on the coordination and incentivisation of open source developers who started with the Starknet ecosystem and have been rapidly winning over all the major Foundations as customers.

CrunchDAO is another team we have been working with who are attracting the world’s best data scientists and machine learning researchers to participate in verticalised ML model competitions being run by large hedge funds with upside sharing incentives.

As we dive deeper into this topic, we conclude on some of the other areas of interest in which we are looking for solutions:

• A reputation / identity layer covering both on- & off-chain work, tracking code contributions, their usefulness, time to delivery and collaboration skills.
• Payment layers bridging the on-chain layer to off-chain KYC requirements, links to typical benefits providers and off-ramps to fiat.
• Discovery platforms for like minded communities to begin collaborations.
• Novel value capture mechanisms that go beyond the current token standards, possibly linking to off-chain equity assets via the likes of Fairmint.
• Curation tools for community building with proper incentives for both moderators / maintainers as well as one-off contributors without corrupting the previously non-monetary nature of grassroots communities.
• Fundraising mechanisms for communities dedicated to certain goals, via verticalized DAOs.
• Protocols that built in on-chain revenue splitting with the most valuable contributors based on pre-set success metrics (frontends or aggregators for DeFi protocols based on volume sourced, apps by number of wallets / usage, etc…)

If you are working on any of these topics, we would love to chat!

For more information on Fabric’s portfolio, opportunities and our investment thesis please visit our website and follow us on Twitter, LinkedIn, Farcaster & Orb.