Author: Kevin, the Researcher from BlockBooster
On November 26, BIO Protocol founder Paul Kohlhaas responded to a tweet from CZ on social media, stating, "Decentralized Science (DeSci) has successfully brought the liquidity of Meme coins into universities and laboratories around the world, supporting genuine scientific research." This phenomenon raises questions: Why can scientific research, which has always been characterized by rigor and long-term investment, especially medical research, successfully combine with the ever-changing cryptocurrency market?
Scientific research, especially medical research, objectively requires a significant amount of time, often measured in years or decades, which greatly contrasts with the current market's pursuit of 'instant speculative gains'. Why has decentralized science sparked market discussions in November? Is it due to the Meme sentiment reaching an all-time high, leading to market corrections? Or is decentralized science merely a new Meme wrapped in the guise of scientific benefits for humanity? This article will explore the true needs of DeSci based on the business models and development directions of Bio Protocol and Pump.Science; under what circumstances can it align with market demands and achieve long-term development.
Business model breakdown of Bio Protocol
First, the narrative of DeSci was sparked by Bio Protocol. On November 8, Binance completed strategic financing for BIO, but the round and amount were not disclosed. Stimulated by this, the BIO Genesis community fundraising campaign initiated by BIO raised $33 million.
BIO currently has 7 active DAOs, focusing on research topics such as longevity health, hair loss treatment, and brain health. It's important to note that BioDAO does not refer to a research team in a specific direction, such as longevity health, but should be viewed as a concrete implementation of the BIO Protocol. Why do I say this? Please refer to the above diagram of the BIO Protocol business model. In simple terms, BIO is a nested Launchpad, combined with no-yield staking, incentives, and an embedded Launchpad to achieve infinite splitting. BIO consists of these four parts.
Specifically, the first part, Launchpad BioDAOs, raises funds through token sales and uses those funds to support related biotechnology projects. Each BioDAO can also be viewed as a separate Launchpad, which I will discuss further in the fourth part.
The second part is the staking mechanism of BIO, which locks user tokens under the guise of curation. From the governance and proposal pages, it can be seen that the usual staking rate of BIO is around 15%, and the staking rate when voting for new BioDAOs exceeds 20%. Users will not receive yields from staking; instead, when the BioDAO they voted for wins, users who voted for that BioDAO receive BIO token rewards. If the voted BioDAO is not selected, there will be no rewards. Curation is a very effective tool for locking user tokens; when a new BioDAO emerges, its value output for the BIO ecosystem will far exceed the rewards distributed by BIO.
The third part is the main use case of the BIO token, which is incentives. Incentives are divided into two parts: the first part is for participating BioDAOs. When they initiate the initial token sale, BIO will distribute incentives. For users, if they use BioDAO's products or contribute to biodao in some way, they will receive incentives. I believe that the current amount of incentivized tokens is minimal. Compared to traditional scientific research, the costs have been greatly reduced because participating in drug trials in the traditional industry is very costly, while BIO distributes BIO token incentives.
The fourth part is the splitting model. BioDAOs can be seen as sub-Launchpads, where BioDAOs select specific teams or research topics, raise funds, and issue IP tokens or IP NFTs. Holders of these assets are promised some early participation rights but no form of additional returns.
From a business model perspective, BIO still operates in a familiar way within the industry, but its characteristic is that Launchpad is nested within Launchpad. As specific scientific research projects issue tokens or release NFT assets, the potential liquidity drought will first impact the BioDAO tokens, while the value of BIO tokens is only questioned when multiple BioDAO tokens encounter issues. However, the benefits of the assets released by specific research projects will fully feedback to BIO, as this will attract more users to buy BIO tokens and participate in the ecosystem. Another characteristic is that by using participation in scientific research as a reason, it allows users to stake tokens without paying yields. Thus, the potential returns are provided by BioDAO tokens or specific research projects, allowing BIO to lock user tokens at extremely low costs for the long term. BIO is an index token across all these DAO tokens.
How does Pump.Science blur the boundaries between DeSci and Memecoin?
Molecule is a protocol that puts IP on-chain, issuing IP-NFTs and IPTs for Bio Protocol; Pump.Science is Molecule's Launchpad, representing the intellectual property of certain compounds in token form.
Pump.Science believes that investing in a biotech company's stock is equivalent to holding all of that company's drugs. However, on Pump.Science, you can choose to invest in a single drug. The tokens issued on Pump.Science comply with legal regulations, but from the perspective of tokenizable intellectual property, they must be artificially synthesized compounds and cannot be naturally occurring substances like nicotine. However, if nicotine is combined with other substances, such as caffeine, this combination can be patented. What Pump.Science does is to tokenize these patents or data and then test their efficacy.
Pump.Science has launched two tokens, namely $RIF and $URO. Among them, the market capitalization of $RIF has reached $100 million. The compounds corresponding to these tokens can be used for developing supplements and can also gain profits through sales or patent licensing in the future. To attract more investors, Molecule will develop a set of data to prove the efficacy of these compounds, such as significantly extending lifespan in animal tests.
But does Pump.Science really want to do scientific research well? It seems that this possibility is becoming increasingly slim. As Christmas approaches, Pump.Science will hold the 'Rif Christmas' event, launching two tokens each day for ten days. In December, Pump.Science will intensively launch 20 artificially synthesized compound tokens. Although the platform claims it will gradually show their development paths, ultimately hoping to advance to human testing stages and even develop into a product market selling different supplements. However, it is foreseeable that the vast majority of the 20 tokens will not last until the day when the corresponding supplements are launched and will drop to zero market value.
From the perspective of chasing market hotspots, Pump.Science is also actively promoting the development of AI-related products. There are plans to create an AI robot that trades based on compound experimental data, executing operations according to the progress of events at different stages.
Returning to the theme of this article, does DeSci need to return to value or chase Memes? From the business models and development directions of Bio Protocol and Pump.Science, it is not difficult to see that neither of them has fully chosen to invest in scientific research while giving up the opportunity to provide the market with Memecoins. This may also be one of the future paths for DeSci protocols. However, one point should be clearly recognized: scientific research needs to return to fundamentals and objective laws. Biological scientific research requires long-term and substantial financial investment. Therefore, the short-term speculation of Memecoins will not last long, and a single Memecoin is not the development model for DeSci protocols; buying DeSci tokens requires enduring an unrecognized narrative. DeSci needs to hype valuations through VC coins, enhance the value expectations of leading projects, and continuously release signals through totemic figures, as the market perception of DeSci lags far behind AI. Therefore, more authoritative signals are needed to increase market confidence and consensus. From the specific GTM approach, the segments of DeSci include: financing, research, data, peer review, publishing, infrastructure and services, art, scientific open ecology, and community, from which one can choose directions that align with their understanding or have relatively low implementation thresholds. Additionally, the DeSci model is naturally a splitting model, where different research topics act as sub-tokens. It requires larger entities to support smaller ones, using web3 financing to obtain a crowdfunding-like approach to fund a specific research topic in reality, making it a practical representative of DeSci. This is what several protocols within the industry are currently working on, but due to the uncertainties and high failure rates associated with scientific research, achieving this should be quite challenging.
The market needs a significant number of DeSci cases in reality to build consensus, and this process will take longer than AI narratives. ChatGPT was released at the end of 2022, and in 2023, the cryptocurrency sector began speculation, while DeSci will need more time. However, from another perspective, this also paves some stumbling blocks for DeSci because the rapid development of AI has subconsciously prepared people to accept the possibility of seemingly unattainable things becoming a reality. The longevity science of VitaDAO is no longer a castle in the air. Overall, I believe the consensus around DeSci has just begun and requires long-term construction, and we should be prepared for the narrative to explode in the next bull market.
