Open Source, Fair Code, and Fair Source Software: A Comparative Analysis of Open Software Licensing Models and Their Implications

Software licensing models define how code is shared and how developers are compensated. This article examines Open Source Software, defined by the Open Source Initiative, alongside newer models like Fair Code, such as License Token’s Open Compensation Token License (OCTL), and Fair Source Software, exemplified by Sentry’s Functional Source License (FSL). It analyzes their structures, differences, strengths, challenges, and future directions, emphasizing developer exploitation as a key motivator. The paper also covers dual licensing, open core strategies, and blockchain’s role.

Why Software Licensing Matters

Software licensing shapes access to code and financial benefits for creators. Open Source Software has long led the way, driving collaboration in projects like Linux and Apache. Yet, emerging models like Fair Code and Fair Source Software respond to developer compensation and protection needs, a concern highlighted in the Linux Foundation’s 2023 sustainability report. This analysis unpacks these models, evaluates their effects on developers, and explores hybrids like dual licensing and open core.

The core idea is that while Open Source sparked a code-sharing revolution, Fair Code and Fair Source refine it to reduce exploitation, blending openness with fairness — a concept rooted in Stallman’s 2002 vision. Blockchain innovations from NFT License Token add fresh layers to this evolving landscape.

Controversy swirls around the GPL, which imposes strict usage rules yet remains “open source,” while commercial restrictions demanding compensation beyond donations are barred, raising questions about the Open Source Initiative’s transparency and corporate influence.

In 2021, I built a small utility app, only to see a big firm use it without credit or pay — I doate for the needful, but the users are not in that situation. Therefore, fairness became my obsession.

Hence, one question that I overly ask myself when I contribute to open source: Why did my open source contribution feel like a gift to a tech giant?

Definitions: Core Concepts in Software Licensing

Here’s a quick guide what we are talking about:

• Classical Open Source Software: Code freely available for use, modification, and sharing, guided by the OSI’s definition. Commercial exploitation without any obligation is a key requirement.
• Fair Code: Free code with ethical restrictions to protect developers, often custom, like OCTL.
• Fair Source Software: Visible code with usage limits to balance transparency and maintainer income, such as FSL.
• Exploitation: Companies profiting from code without compensating creators—think AWS leveraging MongoDB for free and offer it as paid Software as a Service.
• Blockchain: Decentralized tech with a public ledger where ownership and transactions are recoreded in a temper proof way.

Exploring Software Licensing Models

This section breaks down Open Source, Fair Code, and Fair Source Software, with a table and list.

Summary of Open Source, Fair Code and Fair Source Software Licensing Models

Key Features of Open Source, Fair Code and Fair Source Software Licensing Models

• Open Source:
  • Unrestricted code access.
  • Altrustic model. Hope for donations that someone who uses the work will give something back.
  • Examples: Linux, Apache.
• Fair Code:
  • Free access with ethical guardrails.
  • Protects developer rights.
  • Examples: OCTL, Commons Clause.
• Fair Source:
  • Visible code with usage limits.
  • Prioritizes maintainer revenue.
  • Examples: FSL, Sentry.

Diving Into Open Source Software

Open Source Software, shaped by the OSI, lets anyone use, tweak, and share code. It’s built on transparency and teamwork, driving innovation, as noted in Red Hat’s 2025 insights and Raymond’s 2001 essay. Projects like Apache align with web standards like XHTML. Yet, the GPL’s strict rules—like mandating derivative works stay open—spark debate. Critics argue it restricts usage too much while still qualifying as “open source,” unlike Fair Code’s commercial limits, which the OSI prohibits if they demand pay beyond donations.

• Core Principles:
  • Transparency ensures quality.
  • Collaboration taps diverse skills.
  • Open access removes barriers.
• Popular Examples:
  • Linux: Powers global systems.
  • Apache: Runs web servers.
  • WordPress: Fuels online content.
• Common Licenses:
  • MIT License: Offers broad freedom, used by React.
  • GPL: Ensures openness, embraced by Linux.

let us look at the downside of a developer asking the following question: I built a task manager with an MIT license—total freedom—but a startup later sold it as theirs. Why did a startup sell my MIT-licensed tool without credit?
Answer: Altrusitic models do not work in the silicon valley capitalism: It’s the downside of permissive licenses: no rules, no recourse.

Understanding Fair Code

Fair Code provides free code with restrictions to ensure fairness, especially against corporate giants, as outlined in FOSS Post’s 2025 analysis. It’s ethics-driven, resonating with the Electronic Frontier Foundation’s 2019 stance, often boosted by blockchain solutions. Unlike the GPL, it can demand compensation, though this clashes with OSI rules. However, the OSI rules are not protected by any trademark and just by their fellows trolling these rules to everyone who is not even wanted to be covered by the OSI, so one should not care too much.

• Key Principles:
  • Openness with protective limits.
  • Shields developers from misuse.
  • Promotes equitable use.
• Notable Examples:
  • Redis Labs: Pairs Commons Clause] with Apache 2.0, detailed in their 2018 update.
  • License Token: Deploys OCTL with blockchain, explored at license-token.com/octl.
• Licenses in Use:
  • Commons Clause: Blocks commercial sales.
  • OCTL: Uses tokens for pay, explained in License Token documentation.

Q: Why did my friend switch to Fair Code?
A: A dev buddy told me she’d moved her project to OCTL after seeing companies exploit her Open Source work. “It’s like getting paid for those late nights,” she said.

Examining Fair Source Software

Fair Source Software, supported by the Fair Source Initiative, offers code visibility with usage curbs to sustain maintainers, as described in the Fair Source Initiative’s 2025 overview. It balances transparency and income, a theme reinforced in Sentry’s 2023 blog and TechCrunch’s 2024 report.

• Core Principles:
  • Visible code with restrictions.
  • Revenue comes first.
  • Opens up over time.
• Key Cases:
  • Sentry: Uses FSL with a two-year delay, outlined in their licensing strategy.
  • Future-Proof Open Source: Follows a similar path, covered in InfoQ’s 2023 article.
• License Example:
  • FSL: Permits viewing and tweaks, shifts to Apache 2.0 after two years.

Q: Why did a startup founder love Fair Source?
A: I heard a startup founder say FSL kept their app alive while covering costs. “It’s a lifeline before going fully open,” they explained.

Traditional literature artwork opens most often up automatically after a regular lifetime. We could now think what would have happened to J. K. Rowlings life if she would have Fair Sourced Harry Potter...

Comparing the Licensing Models

This section contrasts Open Source, Fair Code, and Fair Source Software, using a table and list, grounded in the Software Freedom Law Center’s 2012 comparison.

Comparative Framework of Software Licensing Models

Practical Impacts

• Open Source: Drives tools like sitemaps for global reach.
• Fair Code: Protects niche efforts from corporate misuse, like Redis Labs.
• Fair Source: Supports startups like Sentry in monetizing while sharing.

Open Source excels in accessibility, Fair Code sets ethical boundaries, and Fair Source focuses on sustainability, a perspective echoed in Raymond’s 2001 essay. The OSI’s stance—allowing GPL’s restrictions but banning commercial pay—hints at corporate sway, especially from big sponsors profiting off Open Source.

Definitions: Exploitation and Fairness

• Exploitation in Licensing: Companies using code without paying creators, a hallmark of Open Source risks.
• Fairness: Rewarding developers for their work, a core aim of Fair Code and Fair Source.

Understanding Exploitation in Software Licensing

Exploitation, especially in Open Source, fuels licensing shifts. This section explores its forms—cloud, AI, and more—comparing developer and artist compensation, with tables and lists.

Exploitation Across Licensing Models

Open Source Software: Vulnerability to Exploitation

Open Source Software depends on volunteers, making it prone to exploitation. The 2014 Heartbleed bug in OpenSSL exposed underfunding, as detailed in Wired’s 2014 article and Schneier’s 2014 analysis. AWS uses MongoDB without giving back, criticized in the MongoDB Blog from 2018. GitHub’s 2023 Octoverse shows 40% of developers burn out from unpaid efforts. The OSI’s intransparent funding—big firms like AWS sponsor them, yet who pays what stays murky—raises doubts about relying on their definition, especially as governments lean on it.

• Exploitation Examples:
  • AWS MongoDB: Free use, no return.
  • Copilot: Trains on public code.
  • Heartbleed: Underfunding’s fallout.

Q: Why was I patching servers at 3 a.m. during Heartbleed?
A: Heartbleed hit, and I was up late fixing servers, frustrated by the lack of support for Open Source tools we all relied on.

Fair Code: Addressing Exploitation

Fair Code counters exploitation with restrictions. Redis Labs uses Commons Clause to stop resale, outlined in their 2018 update and supported by Meeker’s 2018 commentary. OCTL leverages blockchain, akin to Iunera’s Big Data tools, paying via License Token’s system. Resistance to its non-open nature surfaced in The Register’s 2018 critique. More at License Token’s wiki.

• Protective Measures:
  • Commons Clause: Limits commercial use.
  • OCTL: Tracks via tokens.

Fair Source Software: Prioritizing Sustainability

Fair Source Software targets sustainability. Sentry’s FSL delays openness for two years, detailed in their 2023 blog and echoed in TechCrunch’s 2024 take, balancing revenue and sharing. Critics on Hacker News in 2023 and in Lessig’s 2006 book argue it dilutes openness. It aligns with blockchain sustainability.

• Sustainability Tactics:
  • Delayed open sourcing.
  • Revenue-first design.

Cloud Companies: Profiting Without Contribution

Cloud giants amplify exploitation. AWS uses Elasticsearch, prompting Elastic to adopt SSPL, explained in their 2021 blog. AWS’s $80 billion in 2023 contrasts with zero developer returns, a pattern seen in blockchain supply chains.

Artificial Intelligence: Uncompensated Code Use

AI heavily exploits code. A 2024 EFF study estimates 60% of public code powers models like GPT-4, unpaid, as noted in Crawford’s 2021 book. NumPy aids AI without reward, per its 2025 license. Copilot replicated code in 2022, sparking debate in The Verge’s 2022 report, with AI revenue hitting $500 billion by 2025, per Statista’s 2025 forecast. This impacts NFT markets.

Q: Why did a coder complain about Copilot using their work?
A: A coder I know found their Open Source code in Copilot’s output and said, “It’s mine, but I’m not seeing a dime.”

Comparing Artists and Coders: Compensation Gaps

Artists enjoy robust protections; coders don’t. The Berne Convention grants rights for life-plus-50–70 years, per WIPO’s 2025 summary.

Artist vs. Coder Compensation

• Artists:
  • U.S.: $0.003/stream, per Reuters’ 2023 article.
  • EU: Retroactive pay, per EU Directive from 2001.
• Coders: Rely on goodwill, per Tidelift’s 2023 findings, despite code’s value, per Iunera’s 2025 analysis.

Fairness: Ensuring Long-Term Compensation

Exploitation varies: Open Source is most vulnerable, Fair Code offers moderate protection, and Fair Source minimizes it most, per Software Freedom Law Center’s 2020 insights and Benkler’s 2006 book. Fairness demands lifelong pay, possibly via blockchain funding.

Why "Open Source" Can Be Misleading

"Open Source" promises freedom but permits exploitation, unlike copyright laws linked to NFT IP. The Berne Convention secures artist rights for decades, per WIPO’s 2025 overview, while Open Source offers none, per Stallman’s 2002 essay. AWS’s $80 billion in 2023 highlights this gap. The OSI’s opaque funding—big sponsors profit, yet donor details are hidden—casts doubt on its authority.

• Abandonment Stats:
  • 70% fail within a year, per GitHub’s 2023 report.
  • Maintainers quit unpaid, per Eghbal’s 2020 book.
• Solutions: License Token’s OCTL tackles this, per FOSS Post’s 2025 views and Weber’s 2004 study.

Advantages and Challenges of Each Model

Pros and cons with a table and list.

Strengths and Weaknesses of Licensing Models

• Open Source:
  • Strengths: Boosts teamwork, like Linux.
  • Weaknesses: Burnout’s real, per GitHub’s 2023 data.
• Fair Code:
  • Strengths: Fairness shines, as with OCTL.
  • Weaknesses: Adoption’s tricky, per The Register’s 2018 piece.
• Fair Source:
  • Strengths: Pays bills, as with Sentry.
  • Weaknesses: Openness debates, per Hacker News in 2023.

Practical Applications of Licensing Models

Real-world uses with a list and table.

Application Scenarios of Fair Code, Open Source and Fair Source Software Licensing

• Open Source:
  • Collaborative tools: Linux, sitemaps.
  • Libraries: Apache, per Open Source Guide 2025.
• Fair Code:
  • Ethical software: Redis with Commons Clause.
  • Blockchain projects: OCTL, per License Token Use Cases 2025.
• Fair Source:
  • Commercial tools: Sentry with FSL, per TechCrunch 2024.
  • NFT platforms: Arbitrum marketplaces.

Future Trends in Software Licensing

Emerging trends with a table and list.

Emerging Trends in Software Licensing

• Trends List:
  • Pay Focus: GitHub Sponsors, per O’Grady’s 2020 insights.
  • Dual Licensing: MySQL, complex with contributors, per Rosen’s 2004 book.
  • Open Core: GitLab, mixing free and paid.
  • Mixed Models: OCTL with NFT funding, FSL, per EFF’s 2023 article.

Q: Why did a dev cheer funding trends?
A: A dev I know said GitHub Sponsors finally gave them “coffee money” for their Open Source work—a small but real win.

Related Work: Funding Models for Open Source

Efforts to fund Open Source maintainers have grown. The open-source-pledge, asks companies to pay $2,000 per developer yearly, raising nearly $1.5 million by March 09, 2025, per opensourcepledge.com. It focuses on cash for external dependencies, boosting security and sustainability. Tidelift offers a subscription model, paying maintainers for maintenance while providing enterprises with support, detailed at tidelift.com. Gitcoin uses quadratic funding to crowdfund projects via blockchain, per gitcoin.co, aligning with License Token’s blockchain approach. These models address exploitation, complementing Fair Code and Fair Source.

Conclusion: Key Insights and Next Steps

Open Source, Fair Code, and Fair Source address unique challenges. Exploitation drives evolution, with blockchain and alternative models offering solutions. The OSI’s GPL stance and opaque funding call for scrutiny—blending approaches, per License Token’s innovative licensing wiki, could sustain software ecosystems.

Frequently Asked Questions (FAQ)

45 clear Q&As for standalone clarity.

1. What is Open Source Software?
   It is an altrusitic software licensing model. Code anyone can use, tweak, expoit commercial without any cost, or share, per the Open Source Initiative. Think Linux or Apache with MIT or GPL.

2. What is Fair Code?
   Open Source code with ethical limits, concerning the exploitation like Commons Clause from Redis Labs or OCTL from License Token, per FOSS Post 2025.

3. What is Fair Source Software?
   Visible code with use limits to support maintainers, like Sentry with FSL, per Fair Source Initiative 2025.

4. How do the models of Fair Source Software, Fair Code and Open Source differ?
   Open Source is open for any kind of exploitation (Linux), Fair Code adds ethics (Commons Clause), Fair Source controls use (FSL), per Software Freedom Law Center 2012.

5. What’s Open Source exploitation?
   Companies profiting without paying, like AWS with MongoDB, per MongoDB Blog 2018.

6. Why is Open Source exploited?
   Open access lets AWS earn Billions from Open Source Software without contributing, per Statista 2023. Business wise a super trade: Get all Open Source and pack it into Software as a Service and pay nothing for the code.

7. How does Fair Code stop exploitation?
   Limits like Commons Clause or blockchain based licensing in OCTL ensure pay, per License Token.

8. How does Fair Source ensure earnings?
   Delays full access, like Sentry’s FSL waiting two years, per their blog.

9. Why is "Open Source" misleading?
   It suggests freedom but allows unpaid use, resulting in 70% of projects failing yearly, per GitHub 2023 and Eghbal 2020.

10. How does copyright differ for artists vs. open source coders?
    Artists get decades of royalties under Berne Convention, per WIPO 2025, unlike coders, per Stallman 2002. Reason is the coders surrendered their "artist rights" to an open source licensing, leaving them just with potential liabilities for their code.

11. Why do Open Source projects get abandoned?
    No pay drives devs away, 70% ending in a year, per GitHub 2023 and Tidelift 2023.

12. What’s dual licensing?
    Open and paid options, like MySQL with GPL, per Linux Insider 2012.

13. What’s open core?
    Free base, paid extras, like GitLab, per GitLab Pricing 2025.

14. How does AI exploit open source code?
    AI like Copilot uses code unpaid, hitting billions USD by 2025, per The Verge 2022 and Statista 2025.

15. What’s blockchain’s role in open source, fair code and fair source software?
    Tracks use and pays, as with OCTL from License Token, per blockchain basics.

16. What are future trends?
    Pay via GitHub Sponsors and blends like OCTL, per Iunera Trends 2025.

17. How can open source devs ensure fair pay?
    Use Fair Code, Fair Source, or OCTL, per Iunera 2025.

18. Why compare artists and open source coders?
    Artists get royalties via EU Directive 2001, coders don’t, per Tidelift 2023.

19. What’s the MIT License?
    Permissive, free use, like React, per MIT summary.

20. What’s the GPL?
    Copyleft, keeps code open, like Linux, per GPL summary.

21. What does Commons Clause do?
    Blocks sales, as with Redis Labs, per 2018 update and Commons Clause summary.

22. How does Linux use Open Source?
    Linux uses GPL for collaboration, per Linux Docs 2025.

23. Why is Sentry key for Fair Source?
    Sentry balances revenue and openness with FSL, per their strategy.

24. How does community involvement differ?
    Open Source has big teams (Linux), Fair Code smaller ethics groups (Redis Labs), Fair Source limits it (Sentry), per Software Freedom 2012.

25. What legal challenges arise?
    Open Source risks exploitation, Fair Code clashes with norms, Fair Source faces disputes, per Rosen 2004 and EFF 2023.

26. How does blockchain enhance Fair Code?
    Ensures tracking and pay, as with OCTL, per blockchain licensing.

27. What’s NFTs’ role in licensing?
    Links code to ownership, per License Token’s approach, with basics at NFT intro.

28. How does Fair Source handle transitions?
    Shifts to open licenses later, like FSL to Apache 2.0, per Sentry’s blog.

29. What are the 2025 key reasons open source does not work?
    Software as a Service exploitation by tech giants and Ai based code mining exploitation where everyone copies more or less open source code.

30. How do funding models like GitHub Sponsors work?
    Crowdfunds devs for sustainability, per GitHub Sponsors overview.

31. What are Open Source exploitation risks?
    Unpaid use by AWS, per MongoDB Blog 2018, and burnout, per GitHub 2023.

32. How does OCTL differ from traditional licenses?
    Uses blockchain tokens, unlike MIT or GPL, per License Token.

33. What are hybrid licensing benefits?
    Balances openness and revenue, like MySQL, per Linux Insider 2012.

34. How can devs learn more?
    Explore License Token’s wiki, OSI, or Fair Source for details.

35. Why is the GPL controversial in Open Source?
    Its strict rules, like keeping derivatives open, limit use yet it’s “open source,” while commercial pay is banned, per OSI rules tied to GPL.

36. Why isn’t the OSI transparent about sponsors?
    Big firms profit from Open Source, sponsor OSI, but donor details are hidden, raising trust issues, per its opaque funding model.

37. Why did a startup sell my MIT-licensed tool without credit?
    I built a task manager with an MIT license—total freedom—but a startup sold it as theirs. It’s the downside of permissive licenses: no rules, no recourse.

38. Why should someone switch from Open Source to Fair Code?
    A dev buddy moved her project to OCTL after companies exploited her Open Source work. “It’s like getting paid for those late nights,” she said.

39. Why did a startup founder love Fair Source?
    A startup founder said FSL kept their app alive while covering costs. “It’s a lifeline before going fully open,” they explained.

40. Why was I patching servers at 3 a.m. during Heartbleed?
    Heartbleed hit, and I was up late fixing servers, frustrated by the lack of support for Open Source tools we all relied on.

41. Why did a coder complain about Copilot using their work?
    A coder I know found their Open Source code in Copilot’s output and said, “It’s mine, but I’m not seeing a dime.”

42. Why did a dev cheer funding trends?
    A dev I know said GitHub Sponsors finally gave them “coffee money” for their Open Source work—a small but real win.

43. Why does the GPL restrict usage but stay Open Source?
    The GPL forces derivatives to stay open, limiting flexibility, yet OSI calls it Open Source, unlike Fair Code’s pay rules, which are barred.

44. Why does OSI ban commercial compensation in Open Source?
    OSI allows donations but prohibits required pay, possibly due to sponsor influence from firms profiting off Open Source, per its funding opacity.

45. Why should governments question OSI’s definition?
    OSI’s unclear funding from big Open Source users suggests bias, making its definition less reliable for policy, per its lack of transparency.