Blogs & Articles: Debate Over OpenSats Grant Decision Highlights Concerns Around Nostr Decentralization 🔗 2 days ago

A recent denial of a grant application submitted by Peter Todd, a notable Bitcoin Core developer, has sparked discussions on X regarding OpenSats’ funding decisions, particularly around Nostr, a decentralized social network. 

Heh, I applied for a $20k grant to do a proper analysis of Nostr's decentralization on Saturday. Same idea (and similar cost) as my recent L2 Covenants article. Only took them one business day to reject it (took them 6 weeks to reject my grant request to keep OpenTimestamps… pic.twitter.com/sdSuiLg539

— Peter Todd (@peterktodd) September 9, 2024

The grant rejection, which was made public on X, has garnered support from prominent figures like Samson Mow, who urged the OpenSats board to reconsider Todd's proposal.

Grant Application Denied in Record Time

Peter Todd applied for a $20,000 grant to conduct an in-depth analysis of Nostr’s decentralization. 

The grant was rejected within a single business day, a response Todd found strikingly fast, especially when compared to the six-week process involved in rejecting a previous request to fund his OpenTimestamps project. 

Todd speculated that OpenSats’ funding interests may be heavily aligned with Nostr, possibly impacting the rejection.

Todd’s proposed research would have examined Nostr's architecture to evaluate its decentralization claims, a critical issue for a protocol being pitched to dissidents and others seeking censorship-resistant platforms. 

Todd has expressed skepticism about Nostr’s current design, suggesting that it may not live up to its decentralized promises without significant restructuring.

Calls for Reconsideration

Samson Mow, the CEO of JAN3, took to X to publicly encourage the OpenSats board to reconsider Todd's grant request, stressing the importance of red-teaming Nostr. 

I strongly encourage the @OpenSats board to reconsider Peter's grant request. Nostr needs red teaming. Given the energy put towards onboarding people to it, including dissidents, it's the prudent thing to do.@jack @PoleVaultDream @niftynei @abitcoinperson @j9roem @jamesob @nvk https://t.co/aZHMGnudcv

— Samson Mow (@Excellion) September 10, 2024

Mow highlighted the energy and resources being invested into onboarding users, including political dissidents, onto the platform, and suggested that a deeper review of its decentralization should be a priority.

Several X users questioned who exactly is behind OpenSats and what their motivations might be when it comes to funding decentralized projects like Nostr.

OpenTimestamps and Broader Concerns

This latest grant rejection follows another unsuccessful request Todd made to fund improvements for OpenTimestamps, a service that allows users to cryptographically prove the existence of certain data at a given point in time. 

Todd has been vocal about the potential vulnerabilities in OpenTimestamps’ current backend, warning that the protocol could be disrupted by a malicious actor due to scalability limitations.

Without funding, Todd argues that it will be difficult to address these issues, leaving the future of OpenTimestamps uncertain. 

Despite the scalability of the protocol itself, Todd emphasized that the backend code is not yet adequate for handling large-scale usage, and developing the necessary improvements would require significant time and resources.

Funding in the Open-Source Space

Several users, including Francis Pouliot, CEO of Bull Bitcoin, defended Todd's grant request, pointing out that $20,000 is a reasonable figure given the complexity of the work involved. 

20k is not unreasonable compensation, depending on the deliverables. IMO its well below "private sector" comp levels *especially* if a plan to redress issues is provided.

— FRANCIS - BULLBITCOIN.COM (@francispouliot_) September 10, 2024

Pouliot noted that the amount is below private-sector compensation for similar deliverables, particularly if Todd were to offer concrete plans for addressing the decentralization issues he has identified.

Others chimed in, questioning the lack of feedback provided by OpenSats to grant applicants like Todd. The absence of clear criteria for grant rejections has led to frustration among developers who rely on funding to continue working on critical open-source projects.

No Response from OpenSats Board Members

While the debate over Todd’s grant rejection continues, it's worth noting that, at the time of publication, not a single OpenSats board member tagged has responded publicly to the concerns raised about the rejection process.

Transparency and Decentralization

The debate over Todd’s grant rejection highlights concerns about the transparency of organizations like OpenSats in supporting open-source projects within the Bitcoin and decentralized tech ecosystem. 

With significant funding directed towards projects like Nostr, community members are calling for more clarity in how funding decisions are made. 

Todd remains vocal about Nostr’s need for a redesign, while supporters like Samson Mow advocate for a deeper evaluation of the protocol to ensure its long-term success. 

The broader issue of sustaining open-source development, particularly for projects facing funding challenges, remains at the forefront of the conversation.