Original author: Will Awang

In January 2023, VitaDAO, a decentralized organization focusing on research and drug discovery in the field of life and longevity, received US$4.1 million in financing led by traditional pharmaceutical giant Pfizer. This was a milestone in the field of DeSci Biotech and allowed DeSci to enter the field for the first time. mainstream perspective.

Different from DeFis closed-loop business model that can only be achieved by encrypting native assets, DeScis underlying assets come from off-chain and need to be closely integrated with the off-chain real world. This not only involves the use of Web3 technology and token economic models to transform traditional Science. Transformation (such as scientific research collaboration, funding acquisition, data sharing, achievement transformation, technology transfer, product commercialization, etc.) will also involve many off-chain issues such as privacy protection, data security, IP property rights, product commercialization, and on-chain encryption world compliance. The problem.

Since the field of DeSci is very broad, this article will take two iconic Biotech projects in the field of DeSci as examples - Molecule and VitaDAO. From the perspective of a Biotech entrepreneur myself and the perspective of an investment and financing lawyer building the legal structure of the Web3 project, I will explore the entry of Biotech projects. A viable path to Web3.

1. What is decentralized science (DeSci)?

Decentralized Science (DeSci) is a movement that aims to establish a public infrastructure to fund, create, review, validate, store and disseminate scientific knowledge and research through fair and equal use of the Web3 technology stack. The movement aims to create an ecosystem that incentivizes researchers to share their research openly and receive credit for their work, while allowing anyone to easily learn about and contribute to research.

（ethereum.org/zh/desci）

DeSci is not designed to, and cannot, solve all problems related to scientific research and development. Currently, DeSci is based on the Web3 technology stack to solve early scientific research funding (DeFi liquidity on the chain), organizational governance forms (decentralized autonomy, open permissionless participation), and the transparency of scientific processes (research data, openness of results).

DeSci is creating a more decentralized and distributed scientific research model (such as the autonomous operation of smart contracts and the decentralized governance of DAO organizations), making it more resistant to the review and control of funding and scientific research results by central institutions. Obtain diversified scientific research funds in a decentralized manner, open up channels for scientific research data silos and external communication, and provide repeatable incentives to create an ecological environment where scientific research and discoveries can flourish.

2. Biotech’s practice in DeSci

In the field of Biotech, early basic research is often the lifeline for subsequent clinical trials and drug development. However, it is usually hampered by many factors such as tight funding channels, complex legal ownership, and urgent commercialization of projects. This will lead to potential Promising research projects are difficult to get off the ground. Academics refer to this problem of attrition between basic research and clinical trials as the Valley of Death.

In addition, the intellectual property IP and data assets related to the research institute itself are also a highly illiquid, centralized bureaucracy and opaque asset class, which restricts the development of scientific research.

Under this helpless situation, Molecule provides a fund-raising platform for early-stage life science projects through the Web3 technology stack, and builds an open and transparent market for funding, collaborative research and development, and IP property rights transactions.

Molecule’s slogan is: The future of medicine belongs to everyone.

(molecule.xyz/)

2.1 Molecule

Molecule AG is a company located in Europe. It has built a decentralized Molecule Protocol platform to provide funding, collaborative research and development, and IP property rights transactions for early life science projects. Currently, about 12 scientific research projects have received funding on the platform.

A. Marketplace Discovery

This includes the longevity project of the University of Copenhagen, which was later transferred to VitaDAO in the form of IP-NFT.

(molecule.xyz/)

B. Molecule Finance

The Molecule Protocol platform brings the off-chain Sponsored Research Agreement (Sponsored Research Agreement) to the chain by converting it into IP-NFT, allowing fund providers to raise funds for projects by purchasing IP-NFT, or integrate it into vertical fields for the treatment of specific diseases. Portfolio management in a DAO.

Fund providers can provide funding and liquidity for scientific research projects by purchasing and holding IP-NFT. IP-NFT holders can obtain researchers research property rights and future results (such as intellectual property rights, royalties, data, etc.).

（An Open Bazaar for Drug Development: Molecule Protocol）

C. Molecule Ecology

So far, the MoleculeProtocol platform has built a relatively complete on-chain and off-chain DeSci ecosystem through a modular open stack. It uses various DeFi components (Balancer, Gnosis) to build the liquidity of project funds, uses governance components (Moloch) to achieve collective participation in governance of the patient community, scientific researchers and investors, and uses DAOs Launchpad infrastructure Bio.xyz to Realize the raising of early community funds and the establishment of a community framework, use the open scientific research experiment tool (The LAO) to further accelerate research and development, and use the legal framework (OpenLaw) to protect the rights and interests of off-chain scientific research intellectual property IP and the rights and interests of investors and participants on the chain. .

On June 13, 2022, Molecule completed a $13 million seed round of financing led by Northpond Ventures, with participation from Backed VC, Shine Capital, Speedinvest and former Coinbase CTO Balaji Srinivasan.

DeSci is not designed to, and cannot, solve all problems related to scientific research and development. Molecule continues to use the Web3 technology stack to solve early scientific research funding (DeFi liquidity on the chain), organizational governance forms (decentralized autonomy, open permissionless participation), and transparency of scientific processes (research data and results). open) question.

Some people think that Molecule is more like the OpenSea of ​​the DeSci track, but unlike OpenSea, which has native assets on the transaction chain, the most important thing about the DeSci project is still the underlying scientific research projects and intellectual property IP data under the chain. It still needs to conduct research on the underlying scientific research projects. Incubate, govern, and promote development.

Therefore, VitaDAO, which was incubated by Molecule and focuses on the field of life and longevity, came into being.

2.2 VitaDAO

VitaDAO was officially established in June 2021. It was advocated and initiated by Molecule and is committed to building a decentralized and community governance platform focusing on anti-aging drugs and life longevity projects. It aims to accelerate the research and development of life and longevity and extend human lifespan and health. life.

VitaDAO plays the role of a fund provider on the Molecule platform. It specializes in funding life and longevity projects and obtains intellectual property IP data through community fundraising. It also conducts decentralized governance through DAO organization, becoming the worlds first A DAO focused on longevity.

（VitaDAO.com）

A. Community Fundraising and Community Governance

VitaDAO launched a community round of financing on June 23, 2021. Anyone can obtain VITA tokens by purchasing or actively participating in community contributions, and actively participate in VitaDAOs community governance by holding VITA tokens.

（VitaDAO.com）

B. Business model

Although VitaDAO has implemented on-chain fundraising and on-chain governance, its main business model still comes from off-chain.

VitaDAO needs to commercialize the intellectual property IP and data assets acquired through funding scientific research projects (such as authorized use of scientific research data, transfer/authorization of intellectual property IP, cooperative research and development with medical institutions, etc.), and the funds obtained will further fill the DAO treasury to support more projects, thus forming a virtuous cycle.

In August 2021, VitaDAO received the first IP-NFT of the MoleculeProtocol platform, an anti-aging and longevity project from the University of Copenhagen.

To date, VitaDAO has successfully funded 22 projects with a total investment of more than US$4.2 million.

（VitaDAO Whitepaper）

C. Token Economy

According to VitaDAO data, as of January 2023, 60% of these tokens have not yet been put on the market (Unminted). At its inception (June 2021), the community auctioned 10% of tokens, and in January 2023, in a $4.1 million financing led by traditional pharmaceutical giant Pfizer, 7% of tokens Replaced in the form of Token Sale. In addition, service providers, working groups, and treasuries received 10%, 10%, and 3% token shares respectively. Tokens not put on the market are released at a rate of 0.4% every quarter.

VITA token holders enjoy governance rights rather than ownership of IP-NFT, but the value of VITA tokens corresponding to VitaDAO treasury assets (IP-NFT, life science project equity, scientific research data) will also increase with the development of VitaDAO-funded projects. Increasing and continuously improving, it has huge potential.

（VitaDAO.com）

D. Summary

VitaDAO is the first Biotech DAO successfully incubated after Molecule built the Biotech ecosystem. This model has also been recognized by mainstream traditional pharmaceutical giant Pfizer. It is of iconic significance and is worthy of reference for all DeSci projects.

Compared with Molecule, which is a relatively large and comprehensive life science discovery market, VitaDAOs more segmented and more focused DeSci operation method can more easily obtain the attention of funds and can superimpose the resources of market segments in this field, thereby forming the field. unique community.

For example, VitaDAO, a community focused on the scientific research and development of life and longevity, can: (1) gain attention and support from on-chain and off-chain financial liquidity; (2) allow patients to voluntarily contribute data in exchange for hope for future cure and recovery; ( 3) More open science can attract talents and resources from around the world that are concerned about the development of life and longevity, and help scientific research projects pass through various stages such as basic research, clinical trials, and product commercialization.

（VitaDAO Longevity Biotech Conference at Zuzalu 2023）

3. Explore possible paths for Biotech projects to enter Web3

Many projects related to the real world are not completely decentralized at the beginning, and still have to follow a gradual decentralization process from a company-like subject to a protocol subject.

Especially for Biotech projects in the DeSci field, intellectual property IP and data assets still require off-chain entities to hold, operate, apply for patent protection, etc., and must meet the supervision of intellectual property IP and data assets in each jurisdiction. Compliance.

The Web3 paths of Molecule and VitaDAO are worth learning from.

3.1 Molecule - a progressive decentralization path from platform to protocol

In the above case, Molecule AG is a European operating company that gradually transformed from centralized operations at the beginning to building the Molecule Protocol platform on Ethereum.

The centralized Molecule AG has built its own on-chain and off-chain Biotech ecosystem by embedding various protocol components on the Molecule Protocol platform, such as Balancer, Gnosis, Moloch, The LAO, OpenLaw, Bio.xyz, etc., and then transformed into a decentralized one. The innovative Molecule Protocol gradually incubated VitaDAO and subsequently received financing.

Although there is no news about the Molecule Protocol token economy, it is foreseeable that after the progressive decentralization transformation into Molecule Protocol, the positioning of the Molecule AG corporate entity will change to a core contributor of Molecule Protocol, rather than the actual Operators may receive token incentives corresponding to 15% - 20% in subsequent token distributions.

3.2 VitaDAO—a decentralized organizational path initiated by the community

In contrast to VitaDAO, which was advocated and initiated by Molecule, Molecule plays more of a role as a initiator rather than an actual operator. The actual operation is undertaken by working groups elected by the community and operates based on the structure that Molecule has established.

It can be said that VitaDAO is a decentralized organization built on the basis of the Molecule community. The initial funds are provided by the community and will be subsequently run autonomously through the community.

Due to the decentralized nature of the VitaDAO community initiative, its token distribution does not include centralized institutions as initiators and investors (compared to the simulated Molecule token distribution plan), and the token distribution plan is more community-oriented.

（VitaDAO.com）

3.3 Possible paths for Biotech projects to enter Web3

Since the intellectual property IP and data assets of the Biotech project still need to be held and maintained by off-chain legal entities, and the token economic system also needs the support of the participant ecosystem, the Biotech project will immediately achieve decentralization as soon as it enters Web3 Transformation is not a reality, even for a company like Molecule.

The Biotech project needs to first operate in a centralized manner, establish its own participant ecosystem, and design a token distribution plan to incentivize ecological participants.

Token design needs to be clear: What can Web3 bring to Biotech projects?

For a community such as VitaDAO that focuses on the scientific research and development of life and longevity, it can quickly start projects through the design of the token economy, motivate participants in various ecological links, and quickly form a network effect: (1) For investment in scientific research projects Incentives for investors and liquidity providers; (2) Incentives for patients who provide their own data; (3) Incentives for members who help scientific research projects go through various stages such as basic research, clinical trials, and product commercialization.

After completing the ecological construction and designing a clear token economic plan, you can gradually transition to the governance operation mode of a decentralized DAO. Therefore, we see that after the centralized Molecule AG builds a participant ecosystem, it gradually enters the decentralized Molecule Protocol or the decentralized organization VitaDAO. This is a feasible path for Biotech to enter Web3.

4. Write at the end

DeSci may not be the only solution to current problems in scientific research, but it can provide a potentially feasible solution.

Although, like any technological innovation, there are many risks in the DeSci field, such as the legal characterization of the DAO organization, the ownership of intellectual property IP data, the protection of the rights and interests of investors on the chain and scientific researchers off the chain, etc., you should know:

DeSci is still in its infancy, with only a few scientific research projects and scientific DAOs launched on the blockchain. With the attention of crypto leaders such as Buterin, Coinbase’s Brain, Balaji, and the recognition of traditional pharmaceutical giant Pfizer, the field is growing Huge development space is being opened.