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DeSci: How Can On-chain Meme Challenge the Existing Research System?

YBB Capital

2024-11-21 10:50

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Original Article Title: "DeSci: How to Use On-Chain Meme to Challenge the Existing Research System?"

Original Article Author: Ac-Core, YBB Capital Research

TL;DR

● The emergence of the DeSci trend is mainly due to Binance Labs investing in BIO Protocol. CZ's new direction statement involved biotechnology adoption, CZ and Vitalik jointly discussed DeSci, and a16z led the DeSci project AmionChain;

● Viewing DeSci as a Meme, its fundamentals compared to memes in various other directions such as zoology, AI, and art require stronger narratives and prominent figures, while also having more potential for breaking out of niche circles;

● In practical terms, the current economic volume available in the DeSci market is not yet sufficient to support research funding expenditures. Currently, DeSci is still in the early stages of the "market cap dream," with hype being a pressing need.

1. Background

1.1 What is DeSci

A more official explanation, DeSci (Decentralized Science), or decentralized science, aims to build a public infrastructure for scientific research through fair and equal use of Web3 technology. Its focus is on addressing issues such as peer review, research funding, intellectual property management, data transparency, and audit mechanisms.

A more colloquial explanation, DeSci is applying the pure speculation characteristic of the crypto world to the non-speculative world of scientific research. However, DeSci is not a new concept that emerged only this year. VitaDAO, which focuses on funding and promoting early longevity research, was established as early as 2021 and even received investment from the world-renowned pharmaceutical company Pfizer. However, DeSci has always developed steadily without much fanfare, not attracting market attention until recently when Binance Labs announced its investment in BIO Protocol, and CZ and Vitalik participated in a DeSci conference, bringing this track back into the public eye.

1.2 Birth of the Trend

1. Exclusive Investment of Binance Labs in BIO Protocol:

The BIO Protocol can be seen as a crowdfunding platform for scientific projects, raising funds through token sales to support and advance the development of biotechnology projects. Intellectual property exists in the form of IPT (Intellectual Property Token) under the Molecule protocol and is shared among participants.

The BioDAO will reinvest the revenue from intellectual property and product sales back into the BioDAO treasury to fund the next generation of research projects. Binance Labs has stated: "BIO can be seen as the Y Combinator of on-chain science." Currently, the total value of the top 100 startups under Y Combinator's valuation or market cap has exceeded $100 billion, including well-known companies like Airbnb, Coinbase, Stripe, Reddit, and more.

2. CZ's New Direction Speech Includes Biotechnology and a Discussion with Vitalik on DeSci:

In CZ's first post-release speech at the 2024 Binance Blockchain Week in Dubai, he articulated his relationship with artificial intelligence and biotechnology as follows: "Now I mainly do two things: one is Google Academy, and the other is investment. Investment mainly focuses on blockchain, artificial intelligence, and biotechnology."

Following this, CZ attended the DeSci Day event held by Binance in Bangkok and had a discussion with Vitalik on DeSci. This move sparked market discussions, and prices of various DeSci project tokens surged significantly.

3. a16z Leads DeSci Project AminoChain:

Recently, AminoChain announced that it has secured a $5 million seed round investment led by a16z, adding to the previous investments from private funds such as Cercano, bringing the total funding amount to $7.8 million. Its vision is to build a decentralized "biobank" on L2, allowing researchers to easily find and access samples, with patients retaining control and receiving compensation for the use of their data.

Image Source: X (@BinanceLabs)

II. The Real Needs and True Use Cases of DeSci

2.1 Getting Real with DeSci: Funding Needs for Scientific Research

According to the 2024 reports from the National Science Foundation (NSF) and the National Center for Science and Engineering Statistics (NCSES), the estimated research expenditure in the United States in 2023 was $710 billion, and the R&D expenditure in 2022 had almost reached $700 billion, with corporate R&D taking the lead. Around 78% of R&D investment comes from the private sector, especially in fields like information technology and pharmaceuticals.

In 2021, apart from China and the United States, other countries that performed well in research spending were Japan ($177 billion), Germany ($154 billion), and South Korea ($120 billion). In 2021, U.S. research and development spending accounted for 3.5% of the gross domestic product, with Israel and South Korea's research intensity exceeding 4%, Taiwan, Japan, and Germany ranging from 3% to 4%, and the UK and China above 2%. In 2022, the United States' higher education research and development investment ranked second, only after business. Funding for life science research by various institutions is the highest in the science and engineering fields, reaching $42 billion (44% of the total), mainly from the Department of Health and Human Services (see data in Expansion Link 1).

Image Source: See Expansion Link 1

In 2023, China's research and development expenditure exceeded 3.3 trillion yuan (approximately $458.5 billion), an 8.1% year-on-year increase
. The investment in basic research was 221.2 billion yuan, growing by 9.3%. Compared to the past, China has maintained a relatively high growth rate in recent years, especially in high-tech and basic research, demonstrating the driving force of the strategy to become a technology powerhouse (see data in Expansion Link 2).

Comparison of Research Spending Growth: China's research funding is growing rapidly, especially in the field of basic research, demonstrating the country's determination in scientific and technological innovation and its emphasis on high-end technology fields. Although the United States has a higher absolute amount, its growth rate is more stable, with a focus on areas where it has long-term technological advantages.

From the perspective of DeSci's actual application, it is currently more focused on the narrative stage of Memes, making it difficult to directly drive technological development. Whether it is narrative empathy-driven donations or market liquidity brought about by speculative trading, the existing economic volume is still far from sufficient to support the massive funding required for research. Therefore, DeSci is still in the early stage of the "market value dream." For DeSci to truly succeed in the future, it not only needs to meet regulatory requirements but also requires continuous support from influential figures.

2.2 Real-world Academic Finance Case of DeSci: South Korea's LK-99 Room-Temperature Superconductivity Incident

Image Source: Taj Quantum - U.S. Taqi Quantum Official Website

2023 was hailed as the "Year of Room-Temperature Superconductivity" due to several claims of discovering room-temperature superconductors, sparking widespread global scientific attention. However, as subsequent investigations progressed, these findings were found to have serious issues, even leading to an academic scandal.

The event began with physicist Langa Diaz from the University of Rochester in New York publishing a paper in the journal Nature, claiming to have discovered a material capable of achieving superconductivity at room temperature. This discovery was initially seen as a major breakthrough because the emergence of room-temperature superconductors could potentially transform the technological development in energy transmission, medical devices, and electronic components. Typically, superconductors require operation at extremely low temperatures (below -196 degrees Celsius), and a superconductor capable of operating at room temperature has long been a goal pursued by the scientific community. However, Diaz's research faced considerable skepticism from the outset, particularly as his academic reputation had been controversial due to similar research in 2020.

As early as 2020, Diaz had quickly gained fame for a paper on room-temperature superconductors, which was later retracted by Nature magazine two years later. Nevertheless, Diaz once again published similar research in 2023, sparking renewed attention. However, many peers accused him of manipulating data and even plagiarism of doctoral dissertation content. Several reputable media outlets, including The Wall Street Journal and Science magazine, initiated investigations into him, exposing issues in his research. The University of Rochester also launched multiple internal investigations into Diaz, with external experts ultimately confirming "data reliability issues" in his paper, leading to the revocation of his lab and student management privileges. In November 2023, Nature magazine formally retracted his latest paper on room-temperature superconductors.

The behind-the-scenes of this scandal gradually came to light. According to an investigation by the Nature editorial team, members of Diaz's research team did not observe the key superconducting phenomenon "Meissner effect" in the experiment but quickly received a manuscript from Diaz and were asked to cooperate in submission. These graduate students had doubts about some experimental data in the paper, but under the authority and pressure of their mentor, they ultimately did not publicly question these issues. Subsequently, more reviewers and experts cast doubt on Diaz's experimental data, suspecting data tampering.

As Diaz's first paper faced scrutiny, he claimed to have discovered a room-temperature superconducting phenomenon in another material (a compound of lutetium and hydrogen, LuH). However, the measurement data from this research also raised many questions, with many students pointing out systemic errors in the experimental results, even feeling like they were "self-deceiving." Faced with increasing doubts, Diaz still chose to push for the publication of the paper, but 8 of the 11 co-authors ultimately decided to retract it.

This series of academic scandals not only severely damaged Diaz's reputation but also impacted the entire research community. The career prospects of many young scientists became uncertain due to their involvement in these studies, and trust in the academic community was compromised. Physicist Paul Canfield from Iowa State University remarked, "This scandal has damaged the career paths of young scientists, especially those in the superconductivity field."

Meanwhile, another key player in the room-temperature superconductivity field, South Korea's LK-99 team, has also become embroiled in a similar controversy. Despite claiming to have rediscovered a new "room-temperature superconductor" called PCPOSOS in 2024, many in the scientific community have cast doubt on the authenticity of their research. The data presented by the team at academic conferences closely resembled the previous LK-99 study and lacked sufficient validation.

Image Source: Bloomberg

Following the news of the superconductor technology breakthrough, some South Korean stocks related to superconductivity attracted a significant number of investors in the stock market. South Korean small-cap stocks with superconductivity concepts such as Duksung Co. and Sunam Co. hit the 30% daily limit for the third consecutive trading day. Sunam Co. surged by approximately 260% over the past six trading days, while Duksung rose by 170%. Mobiis Co. rose by 30% on Thursday, and Shinsung Delta Tech Co. briefly surged by 21%, reaching a historical high.

In the later stages of the event, the South Korean Superconductivity Society Validation Committee stated that LK-99 did not show the Meissner effect, failing to prove its superconductivity. This news caused fluctuations in Chinese superconductivity concept stocks, with Farer and Zhongfu Industrial witnessing significant price drops. The former is not involved in superconducting technology, while the latter only provides venue and equipment support. Simultaneously, the stock price of an American superconducting company fell by 29%, and Sumitomo Electric Industries also saw a decline due to poor performance.

III. Overview of the DeSci Ecosystem

3.1 BIO Protocol

The BIO Protocol, which received investment from Binance Labs, has been dubbed the "Y Combinator of On-Chain Science," used for early-stage company incubation, providing funding and resources to accelerate project development. According to "TechFlow in Depth" content, the main components include BioDAO, curation system, liquidity and IPization, and incentive mechanisms.

Image Source: TechFlow in Depth - Interpreting the BIO Protocol - BioDAO

· $VITA (VitaDAO): Founded in 2021, VitaDAO focuses on funding and advancing early-stage longevity science research aimed at extending human healthspan, managed by $VITA holders;

· $RSC (ResearchCoin): Used to reward users' contributions on the ResearchHub platform, aimed at accelerating scientific research by incentivizing contributions within the community, anyone can earn $RSC by sharing, planning, and discussing academic science within ResearchHub;

· $ATH (AthenaDAO): AthenaDAO is a decentralized community of researchers, funders, and advocates dedicated to advancing women's health research, education, and funding;

· $GROW (ValleyDAO): Focuses on anti-aging drugs and life extension projects by a decentralized organization.

3.2 Pump.Science

The Solana ecosystem DeSci platform Molecule DAO is a Meme launch platform introduced at the Solana Breakpoint 2024 conference, Pump.science will issue Meme tokens representing drugs on Pump.fun, with the following concept tokens:

· $RIF : Rifampicin, as per the official website: "Rifampicin is an antibiotic known for its remarkable effects on aging. It has been shown to activate the cell's natural defense mechanisms to resist stress and damage in microbes like the C. elegans (a model organism commonly used in aging research). Imagine it as a 'cell coach,' protecting cells from harmful oxidative stress and maintaining the quality of proteins inside cells, encouraging cells to stay healthy and resilient. These protective effects help the worm live longer and healthier."

· $URO : Urolithin A, as per the official website: "This is a compound that your body produces when you consume foods rich in tannins (such as pomegranate). The unique aspect of Urolithin A is its ability to conduct a 'spring cleaning' for your cells. It helps clear out old, dysfunctional mitochondria (cell's energy factories) and allows fresh, healthy mitochondria to thrive. This process is called mitophagy, and research indicates that it can extend the lifespan of C. elegans because it makes cells more efficient and vibrant."

3.3 Donation Concept

· $Scihub: An unofficial token donated by @0xAA_Science, aiming to support an open-access scientific research paper website. The token's direction comes from the Sci-Hub shadow library and is merely a community Meme token. Sci-Hub is a nonprofit, non-governmental website that provides academic papers for free. Besides resources like Google Scholar, Sci-Hub, LibGen, and PubMed, it also integrates a series of other freely available Chinese and English academic resources on the internet, enabling one-stop search and free download of academic materials such as literature, patents, and books.

3.4DeSci Quantum Meme

· $ANTI-Antitoken and $PRO-Prototoken: These two are a token pair expressing support and opposition to Meme Tokens, founded by algorithm engineer and mathematical physics expert @sshmatrix_. 1 $ANTI = 1 $PRO move together.

IV. How Long Can the Fountain of Youth on the Chain Last

DeSci is not a concept that only emerged this year. Today's sudden popularity is mainly influenced by short-term investments from Binance Labs in BIO Protocol, CZ and Vitalik discussing DeSci together, a16z leading the DeSci project AmionChain, and the market's need for a "pump and dump is justice" drive. Looking at the current market, DeSci is still primarily driven by memes, but its fundamental attributes are different from other meme logics.

● Different from Other Memes: Unlike memes in different directions such as AI, the zoo, and art, DeSci requires a highly influential figure to "promote" it. Perhaps it is difficult to support solely based on circle traffic and requires an influential real-world figure with a "scientific research" attribute from outside the circle;

● The Valuation of Leading Projects Needs to Continue to Rise: Currently, the DeSci track has not produced a unicorn project with a market cap of over 1 billion. Compared to other tracks, memes in the DeSci track still have significant market potential. Mainstream centralized exchanges have not listed relevant tokens, and there has been no large-scale fundraising at the A-level;

● DeSci May Have More Cross-Circle Potential: The current PVP market competition is fierce. Still, if an outsider with a "scientist" background uses the narrative of DeSci to donate or fundraise, it will have more development space. Similar to crowdfunding the purchase of the rare original version of the U.S. Constitution with $PEOPLE, and the high-priced auction of "Everyday: The First 5000 Days" NFT at Christie's for $69.34 million, or Musk taking $DOGE to the moon. DeSci embodies a similar core logic to these cases, with marketing effects comparable to Jia Yueting holding a PPT plan to build a car in the token circle.