Category:Peerfunding

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This wiki section is dedicated to the topic of "How do we make Peer Production sustainable? How do we fund it ?

How do we achieve Transvestment: the transfer value from the system of capital to the system of peer production ?


Introduction

Also read:

  1. How Open Source Development is Funded‎, study of the funding of open source projects
  2. Shared Financing of Community-Based Businesses; (applies to the U.S.A.). By Jenny Kassan of SELC
  3. Crowdfunding and the Law. Janelle Orsi, SELC
  4. Autonomy, Labour, and the Political Economy of Social Media. By Dmytri Kleiner


Comparative Table: Commons-Based Funding vs. Private Investments

Tension Conventional funding approach Commons-oriented response
Value creation vs. value capture Returns must be privatizable for investment to make sense Value is co-created as commons; return structures must reflect this
Mission vs. capital logic Funders acquire control; mission drifts toward extraction Governance structures insulate mission from capital capture
Transparency vs. competitive advantage Financial opacity protects competitive position Open book accounting builds trust and enables coordination
Short-term returns vs. long transition VC and philanthropy operate on 3–7 year cycles Generative infrastructure requires patient, multi-decade capital
Individual attribution vs. collective contribution Equity rewards founders; contributors go unrecognized Open value accounting tracks and rewards distributed contribution

Source: https://hackmd.io/@Enli10ment/HJ9h98nnWl

Typology

This list should give you an idea of the wide variety of possibilities to create funding streams:

  1. Donation-based – Gifts and crowdfunding with no expectation of financial return.
  2. Grant-based – Funding from foundations, governments, and philanthropic organizations.
  3. Membership-based – Recurring support from users or community members.
  4. Community treasury – Shared funds managed transparently by contributors (e.g. Open Collective).
  5. Community-supported – Supporters prepay or subscribe to sustain producers or services.
  6. Cooperative finance – Revenue, surplus, or ownership is shared among participants.
  7. Mission-oriented investment – Investors accept capped or purpose-driven returns to protect the mission.
  8. Community investment – Citizens invest in local or cooperative assets and infrastructure.
  9. Quadratic funding – Matching funds amplify support from many small contributors.
  10. Mutual credit – Communities create their own credit systems instead of relying on banks.
  11. Participatory allocation – Communities collectively decide how pooled funds are spent.
  12. Protocol-based funding – Blockchain and smart contracts automate funding and governance.

A Typology of Funding Models

According to the relationship between capital and the project

Peerfunding approaches can be organized according to the relationship between capital and the project: whether funding takes the form of gifts, reciprocal exchange, investment, territorial coordination, or distributed network governance. Rather than treating every mechanism as a separate category, the following typology groups funding models according to their underlying economic logic and governance structure. The examples listed are illustrative rather than exhaustive.

Funding Type Core Logic Best suited for Typical examples
Gift and Philanthropic Funding Capital is provided without expectation of financial return; motivated by public benefit, solidarity, or systemic change Early-stage commons, civic projects, public infrastructure, research, social innovation Donation crowdfunding (Goteo), institutional grants, philanthropic crowdfunding, post-capitalist philanthropy
Revenue and Community Support Projects sustain themselves through recurring participation, membership, patronage, or direct use Community platforms, media, knowledge work, open-source projects, local production systems Subscription models, memberships, Open Collective, Community Supported Agriculture (CSA), cooperative revenue sharing
Commons-Protective Investment External investment is accepted, but returns and governance are structured to avoid extraction and preserve mission Mission-driven enterprises, cooperative platforms, regenerative infrastructure Capped returns, Purpose Capital, cooperative investment, transvestment
Place-Based and Regenerative Finance Capital coordinates portfolios of projects within a territory or ecosystem over long time horizons Bioregional development, land restoration, food systems, watershed projects Community investment enterprises, Bioregional Financing Facilities (BFFs)
Distributed and Participatory Allocation Communities collectively determine how funds are allocated through transparent and collaborative processes Distributed organizations, networks, public goods funding, collaborative ecosystems CoBudget, participatory budgeting, quadratic funding
Protocol and Network-Based Finance Capital flows are coordinated through digital protocols and network infrastructure rather than centralized intermediaries Web3 public goods, decentralized coordination, solidarity economies Mutual credit systems, Credit Commons, onchain allocation systems, commons-oriented DAOs


According to Scale and type of capital

Here the alternatives are categorized along two dimensions: the nature of the capital relationship (gift → loan → equity → commons) and the scale of coordination (individual → project → network → ecosystem).


Scope Gift / Grant Loan / Credit Equity / Investment Commons / Protocol
Civilizational / ecosystem Democratic funding for the commons Mutual credit networks; solidarity finance Asset transvestment; evergreen purpose funds Commons-based capital allocation
Network / inter-project Matched philanthropy; civic crowdfunding; post-capitalist philanthropy Credit commons; community banks; cooperative finance Bioregional Financing Facilities; Community Investment Enterprises On-chain capital allocation; Commons-oriented DAOs (cDPOs); value accounting
Project / venture Crowdfunding (e.g. Goteo); institutional grants Community bonds; revenue-based finance Capped-return investment; purpose capital; cooperative shares CoBudget; Open Collective; quadratic funding
Individual / small group Micro-donations; recurring patronage Peer lending; mutual credit Angel investment with capped returns Personal data pods; self-sovereign identity (SSI)

Source: https://openhaven.net/research/peerfunding/

Important Initiatives

  • Goteo, commons and community oriented crowdfunding platform

An Update on the Crypto Economy and Blockchain-Based Financing

  • See the material collected here at [1]
  • Report: On-Chain Impact Networks: How Crypto Is Being Used To Regenerate The World. A GreenPill Network Writer’s Guild.

[2]


Discussion

Transitioning from Extractive Capital Models to Generative Capital Models

1. Michel Bauwens:

We have today the emergence of 'ethical' entrepreneurial coalitions around Commons-Based Peer Production, like Sensorica and Enspiral, but obviously these emerging and nice projects are embedded in a dominant system which has another logic, so the questions emerges, how does the new ethical economy deal with mainstream forces, especially in the context of needing capital for development. Two obvious choices are: 1) full separatism , i.e. some parts of the solidarity economy refuse any dealings with the for-profit world 2) cooptation, in which the generative ethical players start behaving extractively, echocing the old logic

The middle way is therefore to consider a set of transitional strategies which regulate the cooperation between the old exctractive economy and the new generative economy, but on the terms of the generative players ?


2. Tiberius Brastaviceanu of Sensorica: on Transferring Assets to the Ethical Economy:

"If the proposition to investors is to pump $ into projects and get more $ in return, we are just feeding the beast. Instead, the proposition should be transfer of assets.

This is how it goes. When you have a major economic transition what was used to store value in the old system might not work in the new system. Smart people move their assets in order to keep their wealth. For example, selling land and buying equity in new means of production (factories) during the transition from feudalism to capitalism.

So we need to tell investors that I3C helps them to transfer their assets to the new economy, using $ to buy equity into new means of production, divesting from old business models into new business models. They give us $, to organizations like SENSORICA, and others, who function based on new relations of production, we use it during the transition to buy equipment, tools, food, pay rent, invest in infrastructure, for as long as these things are purchased in $, we scale, but we are ready to switch to other reward mechanisms, redistribution schemes and currencies. These investors gain equity in these new ventures, so they are able to maintain their wealth. But, the difference is that their role in this new economy will not be the same. They will not own p2p means of production. It's like loosing old social status, titles and benefits during the industrial revolution, when new social classes were formed.

Essentially the message is: keep your old assets and your wealth will melt down progressively. Transfer your assets and you'll maintain (some of) your wealth. We show you how."


3. Joshua Vial on Capped Returns:

The idea of capped returns, proposed and discussed by Joshua Vial the Enspiral Foundation and community, is to accept private investments but to cap their possible returns, after which the funded resource is ceremoniously donated to the commons, with attribution to the investor(s).

See this talk by Joshua Vial: https://www.youtube.com/watch?v=W2_I5xuagxE .


Quotes

"For many free open source software projects, no-one profits with ... but rather everyone because of it. And therein lies both the broad opportunity and the deep problem. If everyone secures the return on investment, if the profit cannot be privatised, who exactly is going to make the investment?"

- Philip Sheldrake [http://hi-project.org/ ; email April 2017)


Market-Based Funding is not enough

"The market readily recognizes the value of what promises: hyper-growth, liquidity, high margins, a quick exit, easily measurable profitability.

It far less readily recognizes the value of what produces: territorial resilience, local economic cooperation, energy and food autonomy, non-outsourceable jobs, collective robustness, continuity over time.

And yet, in the world that is coming, it is not absurd to think that these kinds of assets will become at least as strategic as many abstract financial assets.

This is where the matter ceases to be merely economic.

It becomes political in the noble sense. Almost anthropological.

What do we consider valuable enough to deserve capital, even when its profitability does not conform to dominant standards?

This question strikes me as decisive today.

Because we are living through a time when everything is under strain: resources, energy, food, democratic balances, supply chains, our conceptions of work, and even our capacity to project ourselves calmly into the long term.

In such a context, continuing to believe that only projects capable of speaking the language of the market deserve full funding seems to me a fundamental misreading.

In the years ahead, we are going to need projects capable not only of innovating, but of holding steady. Projects that can produce locally, anchor skills, relocalize income, structure cooperation, and make territories more livable and more robust.

The paradox is that many of these projects already exist. They are moving forward. They are proving themselves. They are building. They are welcoming. They are training. They are producing.

But when the time comes to scale, they encounter a void.

Not a void of interest. Not a void of recognition. Not a void of admiration.

A void of appropriate funding."

- Frédéric Bosqué [3]

Key Resources

Key Articles


[4]

This article analyzes four financial models for open hardware development:

(1) philanthropy model, where funders (non-profits or governments) shoulder all design risks;

(2) standard investor model, where investors assume risk for design and sales in order to earn a return on investment (ROI);

(3) crowd-sourced model, where the scientific community funds development and shares risk; and

(4) a new decoupled risk investor model, which separates open hardware design risk from risk of an ROI by introducing a guarantor.

Key Books

"Capital allocation, from paying bills to complex organizational funding, often suffers from inefficiencies and lack of transparency. Crypto, with programmable smart contracts, has the potential to revolutionize this by enabling more efficient, effective, and transparent capital distribution. By addressing coordination failures and introducing new onchain strategies, crypto could transform how society allocates resources, similar to how the internet revolutionized information sharing. This book explores these possibilities within the web3 space, offering a comprehensive guide to the emerging innovations in capital allocation."


“a blueprint for how capital, coordination, and work evolve when technology collapses the cost of trust.”

Key Policies


Key Reports

* Report: Democratic Money and Capital for the Commons. By Pat Conaty and David Bollier. Commons Strategies Group / Heinrich Boll Foundation, 2016.

URL = https://www.boell.de/en/2016/01/15/democratic-money-and-capital-commons pdf

Report based on a intensive 'deep dive' conversation by experts from the funding world and actors in peer production, which examined funding possibilties for the commons and commons-based projects.


Key Tools

  • CoBudget, a open source tool from Enspiral, to allow network members to re-invest in each other's projects
  • Balance, an open-source tool to keep track of shared finances for groups

Key Videos and Podcasts

Statistics

  • "While Lending Club and Prosper were attacking consumer lending, OnDeck, Kabbage and Funding Circle went after the small-business lending space. They focused on business loans ranging from $100,000-$200,000 for businesses who wanted to pay for inventory, franchises, equipment, etc.

While these online small business lending sites expanded, lending from large banks decreased dramatically. According to bank regulatory filings, the 10 largest banks lent $44.7 billion in 2014, which is down 38 percent from its peak of $72.5 billion in 2006." [7]


* 2015 USA:

"Prosper just announced its numbers for 2015. In the last year, Prosper originated $3.7 billion in loans (with $1.15 billion coming in a record-breaking Q4). This growth was double that of the previous year, with revenues of more than $200 million in 2015 — up from $81 million in 2014.

Lending Club hasn’t released their 2015 numbers yet, but it’s estimated they will have originated more than $8 billion in loans, as they had already done $5.8 billion in the first three quarters of 2015." [8]

Crowdfunding Directory

Energy Crowdfunding Platforms

  1. Solar Mosaic
  2. SunFunder
  3. Abundance Generation
  4. CleanCrowd
  5. Microgenius
  6. Sunnycrowd
  7. OnGreen
  8. Skipso
  1. Green Fundraising
  2. Green Unite
  3. GreenFunder
  4. Green Crowd


More

Directory with links at http://www.smartermoney.nl/?p=315#platforms:

  1. Crowdfunding-Based Startup Investments‎ ; Equity-Based_Crowdfunding, investing for profit-sharing
  2. Crowdfunding-Based Project Support
  3. Crowdfunding-Based P2P Lending
  4. Crowdfunding-Based Microcredit
  5. Crowdfunding-Based Donations

See also: Crowdfunding for Social Change Projects, a top 10 directory compiled by Dowser

Related Sections

  1. Business Models]
  2. Music Crowdfunding]
  3. Equity Crowdfunding SEC FAQ

Pages in category "Peerfunding"

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