This article will explore what the true demand for DeSci is, starting from 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?
Author: Kevin, the Researcher from BlockBooster
On November 26, Paul Kohlhaas, founder of BIO Protocol, responded to CZ's tweet on social media, stating, "Decentralized Science (DeSci) has successfully brought the liquidity of Meme coins to universities and laboratories around the world, supporting genuine scientific research." This phenomenon raises questions: why has scientific research, traditionally characterized by rigor and long-term commitment, especially in the field of medicine, successfully combined with the rapidly changing cryptocurrency market?
Scientific research, especially medical research, objectively requires a significant amount of time, usually measured in years or decades, which stands in stark contrast to the current market's pursuit of 'quick flips.' Why did decentralized science spark market discussions in November? Was it due to Meme sentiment reaching an all-time high, leading to market corrections? Or is decentralized science merely a new Meme dressed in the guise of benefiting humanity through scientific research? This article will explore what the true demand for DeSci is, starting from 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?
Breakdown of Bio Protocol's business model
First, the narrative of DeSci was triggered by Bio Protocol. On November 8, Binance completed a strategic financing round for BIO, but the round and amount were not disclosed. In response, BIO initiated a fundraising campaign for the BIO Genesis community, raising $33 million.
Currently, BIO has seven active DAOs, focusing on research areas such as longevity health, hair loss treatment, and brain health. It is important to note that BioDAOs do not refer to a research team focused on a particular direction, such as longevity health, but should be viewed as a specific implementation of BIO Protocol. Why do I say this? Please refer to the above diagram of Bio Protocol's business model. In simple terms, BIO is a nested Launchpad, combined with non-yield staking, incentives, and an embedded Launchpad for infinite splitting. BIO consists of these four parts.
Specifically, the first part, Launchpad BioDAOs, BioDAOs raise funds through token sales and use their funds to support relevant biotechnology projects. Each BioDAO can also be viewed as a Launchpad, which I will discuss further in part four.
The second part is BIO's staking mechanism, which locks in user tokens under the guise of curation. From the governance and proposal pages, it can be seen that the usual staking rate for BIO is around 15%, and the staking rate will exceed 20% when new BioDAOs are generated. Users will not receive returns from staking; rather, when the BioDAO they voted for wins, they receive BIO token rewards. If the voted BioDAO is not selected, there will be no rewards. Curation is an excellent tool for locking in user tokens; when new BioDAOs are generated, its output of value to the BIO ecosystem will far exceed the rewards distributed by BIO.
The third part is the main use case of BIO tokens, which is incentivization. Incentives are divided into two parts: the first part is for participating BioDAOs; when they initiate initial token sales, BIO will distribute incentives. For users, if they use BioDAO's products or contribute to BioDAO in some way, incentives will be distributed. Currently, I believe the amount of incentive tokens is minimal, and compared to the traditional scientific research industry, costs are greatly reduced because participating in drug trials in the traditional industry is very expensive, while BIO distributes BIO tokens as incentives.
The fourth part is splitting; BioDAOs can be seen as sub-Launchpads. BioDAOs choose specific teams or research topics, raise funds, and issue IP tokens or IP NFTs. The holders of these assets are promised some early participation rights, but no commitments of any form of additional returns.
From a business model perspective, BIO still operates in a familiar way within the industry, but its characteristic lies in Launchpad nested within Launchpad. As specific research projects issue tokens or launch NFT assets, potential liquidity droughts will first impact the BioDAO tokens, while BIO tokens act as a layer of insurance; the value of BIO tokens will only be questioned when multiple BioDAO tokens encounter issues. However, the benefits of releasing assets from specific research projects will completely feedback to BIO since it will attract more users to buy BIO tokens and participate in the ecosystem. Another feature is that users can stake tokens under the pretext of participating in scientific research without having to pay returns, therefore the potential returns are provided by BioDAO tokens or specific research projects, allowing BIO to lock in user tokens at a very low cost 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 a certain compound in token form.
Pump.Science believes that compared to buying stocks in a biotechnology company, which is equivalent to holding all of the company's drugs, 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 tokenize these patents or data and then test their effectiveness.
Pump.Science has launched two tokens, namely $RIF and $URO. Among them, $RIF has achieved a market capitalization of $100 million. The compounds corresponding to these tokens can be used for the development of supplements, and in the future, profits can be made through sales or patent licensing. 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 decreasing. As Christmas approaches, Pump.Science will hold the 'Rif Christmas' event, launching two tokens each day for ten days. That is, in December, Pump.Science will intensively launch 20 synthetic 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 the 20 tokens will not sustain until the corresponding supplements are launched and will drop to zero in market value.
From the perspective of chasing market trends, Pump.Science is also actively promoting the development of AI-related products. It plans to create an AI bot that trades based on compound experimental data, executing operations for events at different stages.
Returning to the main topic of this article, should DeSci return to value or chase Meme? From the business models and development directions of Bio Protocol and Pump.Science, it is clear that neither has fully chosen to invest in scientific research and has instead opted to provide the opportunity for the market to offer Memecoins, which may also be one of the future paths for DeSci protocols. However, one thing should be clearly recognized: scientific research needs to return to fundamentals and objective laws. Biological scientific research requires long-term and substantial financial investment, thus short-term speculation on Memecoins will not last long, and a single Memecoin does not represent the development model of DeSci protocols. Buying DeSci tokens requires enduring neglected narratives; DeSci needs to hype its valuation in a way similar to VC tokens, raise expectations for leading values, and continuously release signals through totemic figures, since the market's recognition of DeSci is far below that of AI, so more authoritative signals need to emerge to increase market confidence and consensus. From a specific GTM perspective, the niche tracks for DeSci include: financing, research, data, peer review, publishing, infrastructure and services, art, open scientific ecology, and community, selecting directions that align with one's understanding or have relatively low implementation thresholds. Moreover, the DeSci model is inherently a split model; different research topics serve as sub-tokens, requiring larger vehicles to pull smaller ones, using Web3 financing to obtain crowdfunding-like support for real-world research projects, making them representatives of the practical application of DeSci. This is something several protocols in the industry are currently doing, but due to the uncertainties and high failure rates in scientific research, practical implementation should be quite difficult.
The market needs a significant number of real-world examples of DeSci making an impact to build consensus; this process will take longer than AI narratives. ChatGPT was released at the end of 2022, and in 2023, speculation began in the cryptocurrency space, while DeSci will need more time. However, from another perspective, this also paves the way for DeSci, as the rapid development of AI has subconsciously prepared people to accept the possibility of seemingly impossible things becoming reality, and the longevity science of VitaDAO is no longer a castle in the air. Overall, I believe the consensus for DeSci has just begun, requiring long-term construction, and one should be mentally prepared for this narrative to explode only in the next bull market.
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