This article will explore the true needs of DeSci from the perspectives of the business models and development directions of Bio Protocol and Pump.Science; under what circumstances it can align with market demands and achieve long-term development.
Author: Kevin, the Researcher from BlockBooster
On November 26, Paul Kohlhaas, the founder of BIO Protocol, responded to CZ's tweet on social media, stating, "Decentralized Science (DeSci) has successfully brought the liquidity of Meme coins into universities and laboratories around the world, supporting real scientific research." This phenomenon raises questions: Why has scientific research, which is typically characterized by rigor and long-term investment, especially in the field of medicine, been able to successfully integrate with the rapidly changing crypto market?
Scientific research, particularly in medicine, objectively requires a significant investment of time, often measured in years or decades, which starkly contrasts with the current market's pursuit of "quick returns." 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 trend disguised as scientific research benefiting humanity? This article will explore the true needs of DeSci from the perspectives of the business models and development directions of Bio Protocol and Pump.Science; under what circumstances it can align with market demands and achieve long-term development.
Bio Protocol Business Model Breakdown
First, the narrative of DeSci is sparked by Bio Protocol. On November 8, Binance completed a strategic financing round for BIO, although the round and amount were not disclosed. In response, the BIO Genesis community fundraising campaign raised $33 million.
Currently, BIO has seven active DAOs, focusing on research topics such as longevity, hair loss treatment, and brain health. It is important to note that BioDAO does not refer to a specific research team in a particular 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 above diagram of the BIO Protocol 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 is the Launchpad BioDAOs, which raise funds through token sales and use those funds to support related biotechnology projects. Each BioDAO can also be viewed as a Launchpad, which I will discuss further in the fourth part.
The second part is BIO's staking mechanism, which locks 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 when voting for new BioDAOs exceeds 20%. Users do not earn 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 are no rewards. Curation is a very effective tool for locking user tokens; when new BioDAOs emerge, 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, which receive incentives when they initiate their initial token sales. For users, incentives are given when they use BioDAO products or contribute to BioDAOs. I believe the current amount of incentive tokens is minimal, and compared to the traditional scientific research industry, costs are significantly reduced, as participating in drug trials in the traditional industry is very expensive, while BIO distributes BIO token incentives.
The fourth part is the splitting mechanism, where BioDAOs can be seen as sub-Launchpads. BioDAOs choose 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 are not guaranteed any form of additional returns.
From a business model perspective, BIO still operates in a familiar manner within the industry, but its characteristic is the nesting of Launchpads. As specific research projects issue tokens or release NFT assets, potential liquidity issues will first impact the BioDAO tokens, while the BIO token is effectively insured. The value of the BIO token will only be questioned when multiple BioDAO tokens encounter problems, but the benefits of specific research projects releasing assets will fully feedback to BIO, as it will attract more users to buy BIO tokens and participate in the ecosystem. Another characteristic is that it encourages users to stake tokens under the pretext of participating in scientific research without having to pay yields, thus the potential returns are provided by BioDAO tokens or specific research projects, allowing BIO to lock user tokens for the 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 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 compared to buying stock in a biotechnology company, which indirectly means 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 in terms 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, $RIF and $URO, with $RIF reaching a market cap of $100 million. The compounds behind these tokens can be used to develop 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 effectiveness of these compounds, such as significantly extending lifespan in animal tests.
But does Pump.Science really want to do scientific research? It seems that this possibility is diminishing. As Christmas approaches, Pump.Science will hold a 'Rif Christmas' event, launching two tokens daily for ten days. In December, Pump.Science will intensively release 20 tokens for artificially synthesized compounds. 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 survive until the corresponding supplements hit the market and will become worthless.
From the perspective of chasing market trends, Pump.Science is also actively promoting AI-related product development. It plans to create an AI bot that trades based on compound experimental data, executing operations based on the progress of different events.
Returning to the main topic, 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 clear 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 thing should be clearly recognized: scientific research needs to return to fundamentals and objective laws. Biological scientific research requires long-term and substantial funding, so 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 a narrative that goes unnoticed; DeSci needs to hype its valuation in a VC-like manner, enhance the value expectations of leading projects, and continuously release signals through totemic figures, as the market perception of DeSci is far below that of AI, necessitating more authoritative signals to increase market confidence and consensus. From the specific GTM approach, the sub-tracks 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 inherently a splitting mechanism, where different research topics represent sub-tokens, requiring large vehicles to pull smaller ones, using web3 financing to obtain crowdfunding-like support for real-world research topics, making them representatives of DeSci's practical application. This is what several protocols in the industry are currently doing, but due to the uncertainty and high failure rate of scientific research, implementation should be quite challenging.
The market needs a significant number of DeSci examples that have real-world impact to build consensus, and this process will take more time 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 a longer time frame. 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 impossible things becoming reality, and 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.
About BlockBooster: BlockBooster is an Asian Web3 venture studio supported by OKX Ventures and other top institutions, dedicated to being a trusted partner for outstanding entrepreneurs. We connect Web3 projects with the real world through strategic investments and deep incubation, helping quality entrepreneurial projects grow.
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