# Challenges

### Challenges

As open source software becomes the backbone of modern technology, from critical infrastructure to frontier AI models like Deepseek and Llama, the industry faces mounting challenges in sustainability, quality, and innovation. Despite powering trillions in value creation, open source projects struggle with:

* Chronic underfunding and inadequate maintenance
* Misaligned incentives between creators and users
* Lack of sustainable revenue models
* Inefficient value capture mechanisms
* Complex governance and coordination challenges

The REPO Protocol addresses these challenges through a revolutionary economic model that creates sustainable marketplaces where:

* Open source projects receive perpetual funding streams
* Contributors capture fair value for their work
* Communities effectively govern their shared resources
* Innovation is accelerated through proper incentive alignment

### Core Economic Structure

The REPO Economy operates through a dual-token model centered around RepoDAOs - decentralized repository-specific organizations that coordinate development and sharing of specific repositories. Through the primary $REPO token, the protocol enables:

1. **Project Selection and Funding**
   * Initial funding allocation for promising projects
   * Ongoing liquidity support through protocol-owned pools
   * Multi-chain/multi-trading pair support for RepoDAO token launch
2. **Asset Tokenization and Trading**
   * Creation of liquid markets for open source software, model and dataset IP
   * Efficient price discovery for open source assets
   * Transparent licensing and usage tracking
3. **Value Distribution**
   * Fair compensation for contributors
   * Automated reward distribution based on contributions and merits
   * Long-term incentive alignment through tokens
4. **Decentralized Governance**
   * Community-driven decision making
   * Transparent proposal and voting systems
   * Balanced stakeholder representation

When a RepoDAO joins the REPO network, it receives initial funding and support in exchange for a token allocation to the REPO treasury, creating a symbiotic relationship where protocol success directly correlates with the growth of underlying open source projects.

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