Author: Kevin, the Researcher from BlockBooster
On November 26, BIO Protocol founder Paul Kohlhaas responded to CZ's tweet on social media, stating, 'Decentralized science (DeSci) has successfully introduced the liquidity of meme coins into universities and laboratories around the world, supporting real scientific research.' This phenomenon raises deep thought: why can scientific research, which is characterized by rigor and long-term investment, especially in medical research, successfully integrate with the rapidly changing crypto market?
Scientific research, especially medical research, objectively requires a significant investment of time, often measured in years or decades, which stands in stark contrast to the current market's pursuit of 'one-day fast-track schemes.' Why can decentralized science ignite market discussion in November? Is it due to meme sentiment reaching a historical high, leading to market correction? Or is decentralized science just a meme trend disguised as research benefiting humanity? This article will explore what the true demand for DeSci is, based on the business models and development directions of Bio Protocol and Pump.Science; under what circumstances can it meet market demand and achieve long-term development.
Bio Protocol Business Model Breakdown
First, the narrative that sparked DeSci is Bio Protocol. On November 8, Binance completed a strategic financing of BIO, but the round and amount were not disclosed. Stimulated by this, the BIO Genesis community fundraising activity initiated by BIO raised $33 million.
BIO currently has 7 active DAOs, researching topics such as longevity health, hair loss treatment, and brain health. It is important to note that BioDAO does not refer to a research team in a specific direction, such as the longevity health track, but should be seen as a concrete implementation of BIO Protocol. Why do I say this? Please refer to the business model diagram of BIO Protocol above. Simply put, BIO is a nested Launchpad, combined with non-revenue 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 the funds to support relevant biotechnology projects. Each BioDAO can also be seen as a separate Launchpad; I will discuss this part in section four.
The second part is the staking mechanism of BIO, which, under the guise of curation, locks user tokens. From the governance and proposal pages, it can be seen that the normal staking rate for BIO is around 15%, and the staking rate exceeds 20% when new BioDAOs are generated. Users will not earn yields from staking; instead, when the BioDAO they vote for wins, users who voted for that BioDAO will receive BIO token rewards. If the voted BioDAO is not selected, no rewards will be given. Curation is an excellent tool for locking user tokens in BIO. When new BioDAOs emerge, its value output for the BIO ecosystem will far exceed the rewards issued by BIO.
The third part is the main use case of the BIO token, namely incentives. Incentives are divided into two parts: the first part goes to participating BioDAOs when they initiate their initial token sale, and BIO issues incentives. For users, they will receive incentives when they use BioDAO's products or contribute to BioDAO. I currently feel that the amount of incentive tokens is minimal compared to the traditional scientific research industry, as the costs are significantly reduced. Participating in drug trials in the traditional industry is very costly, while BIO issues BIO tokens as incentives.
The fourth part is the splitting model. BioDAO can be seen as a sub-Launchpad, where BioDAO selects specific teams or research topics, raises funds to issue IP tokens or IP NFTs, and the holders of these assets are promised some early participation rights without any commitment to additional returns.
From a business model perspective, BIO still operates using familiar methods in the industry, but its characteristic is that the Launchpad is nested within another Launchpad. As specific research projects issue tokens or release NFT assets, the potential liquidity drought will first impact the BioDAO tokens, while the value of BIO tokens will only be questioned if multiple BioDAO tokens encounter issues. However, the benefits of the specific research project releasing assets will be fully returned to BIO, as it will attract more users to buy BIO tokens and participate in the ecosystem. Another characteristic is that users are encouraged to stake tokens under the pretext of participating in scientific research without having to pay for returns, so the potential returns are provided by the BioDAO tokens or specific research projects, allowing BIO to lock user tokens long-term at a very low cost. 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 brings IP on-chain, issuing IP-NFTs and IPT for Bio Protocol; Pump.Science is Molecule's Launchpad, representing the intellectual property of a certain compound in token form.
Pump.Science believes that compared to buying shares of a biotechnology company, it is equivalent to holding all of the company's drugs. However, on Pump.Science, one 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 tokenizing these patents or data and then testing their effectiveness.
Pump.Science has launched two tokens, namely $RIF and $URO. Among them, $RIF has reached a market capitalization of $100 million. The compounds corresponding to these tokens can be used to develop supplements, and in the future, they can also generate profits through sales or patent licensing. To attract more investors, Molecule will develop a set of data to prove the effectiveness of these compounds, such as significantly extending lifespan in animal tests.
But does Pump.Science really want to do scientific research properly? It seems that this possibility is becoming increasingly slim. As Christmas approaches, Pump.Science will hold a 'Rif Christmas' event, launching two tokens every day for ten days. In December, Pump.Science will intensively launch 20 artificially synthesized compound tokens. Although the platform claims it will gradually showcase their development paths, ultimately hoping to advance to human testing stages and even develop into a product market selling different supplements, it is foreseeable that the vast majority of these 20 tokens will not survive until the corresponding supplements hit the market and will have their market value drop to zero.
From the perspective of chasing market hotspots, Pump.Science is also actively promoting the development of AI-related products. It plans to create an AI robot that trades based on compound experimental data, executing operations based on 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 has fully chosen to invest in scientific research while forgoing the opportunity to provide memecoins to the market. 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, and biological science research requires a long-term and substantial investment of funds. Therefore, the short-term speculation of memecoins will not last long, and a single memecoin is not the development model for the DeSci protocol; purchasing DeSci tokens requires enduring a narrative that is ignored by others. DeSci needs to hype its valuation in a VC-like manner, raising expectations for leading values while continuously releasing signals through figures that serve as spiritual totems, as the market perception of DeSci is far below AI. This necessitates more authoritative signals to emerge, increasing market confidence and consensus. From the perspective of specific GTM methods, the sub-tracks of DeSci include: financing, research, data, peer review, publishing, infrastructure and services, art, scientific open ecology, and community. Choosing a direction that aligns with one's understanding or has a relatively low implementation threshold is advisable. Furthermore, the DeSci model inherently involves splitting; different research topics are akin to sub-coins that require large vehicles to pull small ones, utilizing web3 financing to obtain a crowdfunding-like approach to fund a specific research topic in reality, making it a practical representation of DeSci. This is something several protocols in the industry are currently working on, but due to the uncertainties and high failure rates in scientific research, implementation should be quite challenging.
The market needs a large number of real-world DeSci instances that generate impact to build consensus, a process that will take longer than the AI narrative. ChatGPT was released at the end of 2022, and speculation in the crypto circle began in 2023, while DeSci will require more time. However, from another perspective, this also paves some stumbling blocks for DeSci, as the rapid development of AI has subconsciously prepared people to accept the possibility of seemingly unrealized things becoming a reality. VitaDAO's longevity science is no longer a castle in the air. Overall, I believe the consensus around DeSci has just begun and requires long-term construction, and one should be prepared for this narrative to explode in the next bull market.