How is Monero development funded?

Question

What is the funding model for Monero development?

What incentives are in place to retain existing talent and attract additional developers?

Answer 1

Monero is an open source project, and is no different than most in that respect. There is no company or similar organization providing funding, and most developers contribute pro bono.

That said, there is an optional funding system called the "Forum Funding System" which allows a person to request funding for any particular reason. This is wholly voluntary, and not connected to the consensus rules in any way. This allows monero holders to decide to fund people if they think that the proposed task is likely to be good for monero, and thus increase the value of their own monero.

Several such funds have been successful, some are still ongoing, and some failed.

In addition "smart mining" (if your CPU is idle and you are not running on just battery power it will begin mining) once released will help with development funding (via optional donations) in addition to network decentralization.

Some developers also build Monero related services (such as xmr.to) that will financially benefit from the growth of the Monero network.

Some services also donate to Monero core development - for instance, most (if not all) mining pools include a small percentage donation to core development.

Finally, some individuals donate directly to core development. For instance, on the Community Hall of Fame, it can be seen that some members have donated 20k xmr to core development. Though it should be noted that the hall of fame includes funding routed through the forum funding system as well as direct donations.