Will Crypto Really Solve Science’s Biggest Problems?

An inefficient peer review process, the fact that renting a research paper for 48 hours can cost over $30, and that scientists are spending more time applying for research grants than actually doing science are only some of the consequences of the greater problem of mismatched incentives among scientific research institutions around the world.

Amid the recent global pandemic, the blockchain and biotech communities looked to address these funding inequities and joined to start the Decentralized Science (DeSci) movement. Although it may still be hard to conceive of how diverse groups of people in Discord servers can change the game for scientific funding and publishing, it’s clear that blockchain’s inherent properties make an interesting case for why this could work.

What does blockchain have to do with synbio?

For a long time, blockchain’s applications in bio had been limited to securing data like genome analyses and medical records in an immutable and decentralized way. However, less than a decade after the creation of Ethereum
ETH
, we can see DAOs leveraging NFTs and smart contracts to align people’s incentives and ultimately achieve a clear goal.

Now, in order to have a better understanding of how all this works, let’s first start with what this ubiquitous acronym means—DAO
DAO
. It stands for Decentralized Autonomous Organization. Think Kickstarter on steroids: a group of people gather online to move the needle on a particular issue. Their mission is not to solve the problem themselves but to best support other people to do it. They “crowdfund” the DAO by issuing a type of coin (commonly known as a token) for the organization. Depending on the conditions of the “smart contract” under which the DAO operates, anyone who buys their token can have a certain amount of decision power, like voting for which projects to fund.

Biotech DeSci’s central thesis is that most biotech holding companies aren’t interested in betting for risky projects at a small ticket size ($100-200k). Yet, if we want 10x more innovation as humanity, these are precisely the types of projects we cannot let get stuck, neither in the NIH grants valley of death nor in the VC catch-22 of needing funding to do science and needing science to get funding.

Biotech DAOs focus on helping these types of projects take aim at those moonshot ideas. In exchange, the DAO token holders get a fraction of the IP the researchers develop. This is when NFTs become way more than just monkey pictures and start becoming certificates of ownership over something like a new method to scale up algae production or a drug for a rare disease (to give a couple of examples).

Another hope for IP NFTs and DAOs—Paul Kohlhaas (cofounder of Molecule) notes—is that larger biotech companies can look through the portfolio of specific DAOs and even their patents. Then, if they happen to find anything interesting, they can either seek collaboration with the researchers and the DAO or look to license or buy the IP. The latter, in particular, would benefit everyone who took part in the process of creating that IP, including, of course, token holders.

“While the market for these tools is not that large, owning a piece of the IP could be extremely valuable. There’s a sense of making history” – Niklas Rindtorff, cofounder of LabDAO

Moreover, what if even the seemingly failed projects could bring something to the table too? While traditional funding methods don’t encourage publishing disproved hypotheses, DeSci could make this information accessible to others to learn from previously attempted experiments.

What are all those DAOs actually doing?

After recent events in the crypto world, it’s fair to be skeptical about anything involving similar technology. But, at the same time, it’s fair to keep in mind that doing science itself, especially biotechnology, can be a process with very long iteration cycles.

That said, one of the best-known DAOs in the space is the longevity-focused VitaDAO, with more than 200 projects sourced, $3 million invested in research, and 1,300+ token holders, including Pfizer
PFE
. Their token, $VITA, can be bought through cryptocurrencies like ETH at a market cap of $20 million.

The two projects listed on VitaDAO’s website started in April and June of this year, and both have a timeline of two years. The maximal returns for token-holders are still to be seen, but the DAO is already doing its job in sourcing projects, voting for them, and funding them.

“VitaDAO did something that Pfizer has been trying to do for years: create an open innovation ecosystem. Think of the bureaucracy inside Pfizer. This is the dawn of biotech DAOs—we’re only just getting started” – Paul Kohlhaas, cofounder and CEO of MoleculeDAO.

Now, not all of DeSci is about extending our lifespan. Take ValleyDAO, for instance, which was started this year by Albert Anis, a Belgium-based synthetic biologist, to address planetary health: to solve the existential threats of climate change and food security and ultimately create a fairer and more equitable bioeconomy. So far, they’ve approved one project by an Imperial College of London researcher and published it on the Molecule discovery platform.

Molecule is also DAO. Most importantly, it’s the marketplace for research-related IP. They developed IP-NFTs to connect academics and biotech companies with quick and easy funding, enabling patient, researcher, and investor communities to govern and own research-related IP directly. They work with DAOs like Vita, Valley, Psy (psychedelic medicine), and LabDAO (network of wet & dry laboratory services).

Indeed, another goal of the DeSci movement is to fund projects previously neglected for being controversial, or not having a large enough market, or simply not being of interest to traditional funders (see image below—curated by Jocelynn Pearl and Dani Elyse—for a more complete view of the DeSci landscape).

For instance, Vibe Bio addresses the highly neglected problem of a lack of research in rare diseases. Cofounder Alok Tayi’s daughter was born with a rare disease, which pushed him to create a DAO that has now been backed by investors like Garry Tan (current YC president) and Balaji Srinivasan (former general partner at a16z and former CTO of coinbase). In addition, Vibe Bio provides an opportunity for parents and patients to fund the DAO according to their demands.

“Let patients decide what to get funded, not Wall Street” – Alok Tayi, founder of Vibe Bio

Seeing beyond the walls

First off, it’s fair to question how sustainable it is to join thousands of people, from all around the world, in a Discord server. Moreover, crypto has become famous among those who seek quick and easy money, so the question is: how serious could all these people be about solving biotech’s biggest problems? And more concretely, what if someone just decided to buy the whole DAO? Where’s the promise for governance there?

Tyler Golato from Molecule reminds us that crypto is not the best place for independent thinking. “A lot of people use a DAO as an excuse for lack of governance,” he says. “However, we’re not building Molecule from a crypto perspective but from a meta-science perspective.” As a purist, he’s open to working on any solution that makes sense. Ultimately, what Molecule is really trying to do is focus on bringing drugs from academia to market.

Regarding ownership, the idea is to make different aspects of science (like peer review and grants) separate and specialized communities; in other words, make them decentralized. Still, there’s nothing preventing someone from buying out a whole DAO.

Now, all the DAOs and technologies mentioned thus far tend to generate a lot of data, and much of the DeSci movement would be all for naught if there weren’t a decentralized way to store that data. Well, thankfully, the InterPlanetary File System (IPFS) and Filecoin
FIL
are two related technologies that aim to improve how digital content is stored and distributed. IPFS is a decentralized protocol for storing and sharing files, which allows users to access content based on its content address rather than its location on a specific server. This means that files can be distributed across a network of nodes, making it more resilient to censorship and improving performance by allowing faster and more efficient content delivery.

Filecoin is a blockchain-based storage network that incentivizes users to provide storage space for IPFS content by offering rewards in the form of Filecoin cryptocurrency. This creates a decentralized marketplace for storage, where users can buy and sell storage space, and content creators can pay for storage without relying on a centralized storage provider.

Ultimately, DeSci is one tool to align incentives in science, and the people involved in creating these tools will have to keep in mind what problem they’re solving and for whom. We couldn’t have put it better than James Sinker, cofounder of OrangeDAO:

“To give scientists more freedom to express their visions for the future and to tackle them—this reminds me of the ethos of Silicon Valley.”

Thank you to Sofia Sanchez for additional research and reporting on this article. I’m the founder of SynBioBeta and some of the companies I write about, such as Vibe, Molecule, and Filecoin are sponsors of the SynBioBeta conference and weekly digest.