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Exploring decentralized science
Chart: NFT trading volumes at a low
Funding science onchain with BIO protocol
The general way a scientist would bring their lofty academic ideas to market is to first get published in a peer-reviewed journal, spend years setting up a BioTech company as a CEO and then raise funding for that idea.
But if a collective group of individuals could raise a whopping $47 million on the blockchain to purchase an original copy of the US Constitution back in 2021, then surely the same model could be applied to fund niche fields of scientific research.
That’s what the nascent subsector of decentralized science (DeSci) has been attempting for the last few years. According to CoinGecko, DeSci today comprises about 25 tokens with a total market cap of $459 million.
The most prominent DAO at the forefront of this effort is the longevity-focused VitaDAO, which previously raised $4.1 million in January 2023 from Pfizer Ventures, alongside Bryan Johnson and Balaji Srinivasan.
Today, VitaDAO is one of eight BioDAOs that sit collectively under the umbrella of BIO protocol, a liquidity layer dapp that launched at the end of 2022 on the Ethereum L1.
Launched by VitaDAO co-founder Paul Kohlhaas, BIO effectively serves as a Y Combinator accelerator program to fund a variety of scientific DAO projects dedicated to specific areas of research.
For instance, HairDAO is trying to solve hair loss, CryoDAO is researching cryopreservation, AthenaDAO is focused on women's reproductive health and PsyDAO is looking at the use of psychedelics for mental health.
“After we built VitaDAO, we were approached by many people [who] wanted us to build a DAO for other biotech fields other than longevity,” Kohlhaas told Blockworks.
The need to create a unifying piece of liquidity infrastructure came naturally as an idea to unify the many illiquid tokens of these DAOs, Kohlhaas said.
The first $BIO token fair launch mint occurred in Q2 2024 and raised $8.25 million. The token remains non-transferable (though it is currently swappable for specific BioDAO tokens) and is going through its second fair launch round, having raised about 589 million BIO so far.
For now, aspiring BioDAOs need to be first whitelisted by BIO protocol before proceeding to a DAO token holder vote, though the plan is for this process to be fully permissionless.
Put simply, it’s an alternative funding model using the Web3 tools of tokenization for scientists (or patients like Ron Woodroof in the Oscar-winning film Dallas Buyers Club) who are restricted from the thick political bureaucracies of the pharmaceutical industry.
It’s the familiar DAO model that we’ve seen replicated across Web3 from financial products and social media platforms to games. Even the prestigious scientific journal Nature has acknowledged scientists should “get on board” with the model. BIO protocol offers an initial funding seed of about $100k to $250k for approved BioDAOs, as well as connections with service providers in their network and help with legal, branding and tokenomics.
In exchange, BIO protocol receives 6.9% of the token allocation of each BioDAO and some ownership in the BioDAO’s NFT intellectual property.
“We want these scientists or patients to be focused on doing the research, not flying around to crypto conferences and trying to figure out what a SAFT, or Univ3 liquidity position or multisig is,” Kohlhaas said.
After DAO approval, $BIO stakers can receive $BIO emission rewards and are whitelisted for priority access to the intellectual property-NFT funding rounds of respective BioDAOs. At that stage, they may decide what future BioDAOs should be approved onto the protocol.
Each BioDAO pursues one branch of scientific research (e.g. longevity, hair loss), though they may also work on several research projects at any given time.
Each piece of research is typically tokenized as a specific NFT, or “IP-NFT,” which offers a quick way for investors to fund a specific research project and own a piece of the pseudo-patent.
One VitaDAO research project offers a concrete example of the benefits behind marrying markets with scientific research in its very early stages. A project behind new gene therapy to target aging saw a 150% jump in value for its VITARNA token after positive results were published on in-vitro tests.
These BioDAOs technically operate under a non-profit structure, yet some have chosen to monetize their work in order to fund further research. HairDAO, for instance, has an actual shampoo product on the market, with its related tokenized $POO tokens.
Kohlhass likened it to a university endowment fund that actively invests to grow the university’s treasury.
It’s a pretty complex structure, and this attempt at disrupting the fundraising process around the trillion dollar industry of Big Pharma is just one subsector of DeSci.
Other DeSci verticals are targeting the problems involved in academic peer-review publishing, including Research Hub, a project founded by Coinbase’s Brian Armstrong.
— Donovan Choy (X: @donovanchoy | Farcaster: @donovan)
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NFT trading volumes at a low:
NFT trading volumes in September are at all-time lows of 115k ETH ($272 million), the lowest since January 2021. Based on CoinMarketCap data, the total market cap of NFTs is about $29.9 billion.
— Donovan Choy
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In a recent report from Blockworks Research, research manager Ryan Connor explains why moving to this measure meaningfully recalibrates our estimates of oracle market share, revenue potential, and the potential for oracle commoditization on a go forward basis.
The global economic landscape appears poised for a shift toward monetary easing. With inflation concerns subsiding and central banks — championed by the Federal Reserve — initiating rate cuts, we're likely entering a period of increased global liquidity. This environment historically bodes well for risk assets, particularly cryptocurrencies like bitcoin and ethereum, which have shown high sensitivity to liquidity shocks.
Metaplex continues to expand its product offering, evolving from NFT and token tools to a comprehensive suite that includes Aura, a decentralized indexing and data availability network. This new offering (which is secured by the MPLX token), coupled with the resolution of token vesting, positions Metaplex as a more robust and valuable platform for developers and investors alike.
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The insights, views and outlooks presented in the report are not to be taken as financial advice. Blockworks Research analysts are not registered broker/dealers or financial advisors. Blockworks Research analysts may hold assets mentioned in this report, further outlined in the Firm’s Financial Disclosures.