Author: YBB Capital Researcher Ac-Core

TL;DR

• The rise of DeSci (Decentralized Science) is largely driven by Binance Labs’ investment in BIO Protocol, CZ’s new direction statements on biotech, and CZ’s discussion on DeSci with Vitalik. A16z led the investment in the DeSci project AmionChain.

• Compared to other meme-driven sectors like zoos, AI, and art, DeSci requires a stronger narrative and personality endorsement. It also holds significant potential for breaking out into wider circles.

• In practical terms, the economic scale currently available in DeSci is insufficient to sustain research funding. DeSci is still in the early stages of a “market cap dream,” and hype-driven speculation is a major necessity.

1. Background

1.1 What is DeSci?

A more official explanation: DeSci (Decentralized Science) aims to use Web3 technology to build public infrastructure for scientific research in a fair and equal manner. Its focus is on addressing issues like peer review, research funding, intellectual property management, data transparency, and auditing mechanisms.

A simpler explanation: DeSci is bringing the pure speculation of the crypto world to the zero-speculation field of scientific research. However, DeSci is not a new concept that has emerged this year. VitaDAO, which focuses on funding and promoting early longevity research, was established back in 2021 and even received investment from the globally renowned pharmaceutical company Pfizer. However, DeSci has been a slow-moving field, not receiving much attention until recently when Binance Labs announced its investment in BIO Protocol and CZ and Vitalik held discussions on DeSci, bringing the sector back into the public eye.

1.2 The Birth of the Trend

1. Binance Labs Invests Exclusively in BIO Protocol:

BIO Protocol can be viewed as a crowdfunding platform for scientific projects that raises funds through token sales, which are then used to support and advance biotech projects. Intellectual property is represented by the Molecule Protocol’s IPT (Intellectual Property Token), which is shared among participants.

BioDAO uses the revenue from intellectual property and product sales to replenish BioDAO’s treasury for funding future R&D projects. Binance Labs describes BIO as “the Y Combinator of on-chain science.” Currently, the top 100 startups from Y Combinator, with valuations or market caps exceeding $100 billion, include companies like Airbnb, Coinbase, Stripe, and Reddit.

2. CZ’s New Focus on Biotechnology and Discussion of DeSci with Vitalik:

In his first speech after his release during Binance’s Blockchain Week in Dubai in 2024, CZ stated, “Right now, I’m focused on two things: Google Academy and investments. My investments mainly focus on blockchain, AI, and biotech.” CZ later attended Binance’s DeSci Day event in Bangkok and discussed DeSci with Vitalik, sparking significant market attention, causing token prices of various DeSci projects to rise sharply.

3. A16z Leads Investment in DeSci Project AmionChain:

Recently, AmionChain announced that it had secured $5 million in seed funding led by A16z, bringing the total funding, including previous investments from Cercano and other private funds, to $7.8 million. The vision of AmionChain is to build a decentralized “biobank” on Layer 2, where researchers can easily find and access samples, while patients retain control and receive compensation for the use of their data.

2. DeSci’s Real Needs and True Use Cases

2.1 The Reality of DeSci: Funding Needs in Scientific Research

According to the 2024 report by the U.S. National Science Foundation (NSF) and the National Center for Science and Engineering Statistics (NCSES), U.S. research spending is estimated to reach $710 billion in 2023. In 2022, R&D spending approached $7,000 billion, with the majority coming from private sector investments, particularly in fields like information technology and pharmaceuticals, which accounted for about 78% of the total R&D spending.

In 2021, besides the U.S. and China, the countries with the highest research expenditures were Japan ($177 billion), Germany ($154 billion), and South Korea ($120 billion). In 2021, U.S. R&D spending accounted for 3.5% of GDP, while Israel and South Korea had R&D intensities exceeding 4%, with Taiwan, Japan, and Germany between 3% and 4%, and the UK and China over 2%. In 2022, U.S. higher education R&D spending ranked second, just behind commercial enterprises. Funding for life sciences research is the highest among all scientific and engineering fields, amounting to $42 billion (44% of the total), mainly from the Department of Health and Human Services (data can be found in the extended links).

In 2023, China’s R&D expenditure exceeded ¥3.3 trillion (approximately $458.5 billion), an 8.1% year-on-year increase. Investment in basic research amounted to ¥221.2 billion, a 9.3% increase. Compared to previous years, China has maintained a relatively high growth rate, especially in high-tech and basic research areas, reflecting the strong push behind its “Science and Technology Power” strategy (data available in the extended links 2).

Comparison of Research Funding Growth: China’s R&D expenditure is growing rapidly, especially in basic research, which demonstrates the country’s commitment to technological innovation and high-end scientific fields. Although the U.S. spends more in absolute terms, its growth rate is more stable, focusing on long-term technological advancements in fields with a sustained edge.

From DeSci’s practical application perspective, it is still largely in the “meme” narrative stage and has yet to directly drive technological advancement. Whether it’s donation-driven empathy or speculative trading leading to market liquidity, the current economic scale is still far from sufficient to support the massive funding required for scientific research. As a result, DeSci is still in the early stages of its “market cap dream.” For DeSci to truly take off in the future, it will need to meet regulatory requirements and gain continuous support from influential figures.

2.2 DeSci’s Real-life Academic Finance Case? The LK-99 Room Temperature Superconductivity Incident in South Korea

2023 was dubbed the “Year of Room-Temperature Superconductivity,” mainly due to several claims of discovering room-temperature superconducting materials, which sparked widespread attention in the global scientific community. However, as investigations deepened, these discoveries were found to have significant issues, even leading to academic scandals.

The incident began when physicist Ranga Diaz from the University of Rochester published a paper in Nature, claiming the discovery of a material capable of superconductivity at room temperature. This discovery was initially hailed as a groundbreaking achievement, as the advent of room-temperature superconductors could revolutionize energy transmission, medical equipment, and electronics. Superconductors typically require extremely low temperatures (below -196°C), so a room-temperature superconductor has long been a goal for the scientific community. However, Diaz’s research faced significant skepticism from the outset, especially considering his academic reputation had already been questioned in 2020 due to similar research.

In 2020, Diaz had gained widespread attention for a paper on room-temperature superconductivity, but that paper was retracted by Nature two years later. Despite this, Diaz published a similar research paper in 2023, reigniting interest. However, many of his peers accused him of data manipulation and even plagiarism of doctoral thesis content. Several prominent media outlets, including the Wall Street Journal and Science magazine, launched investigations, revealing problems with his research. The University of Rochester also initiated multiple internal investigations, which ultimately confirmed that Diaz’s paper had “data reliability issues,” leading to his removal from overseeing his laboratory and students. In November 2023, Nature formally retracted Diaz’s latest paper on room-temperature superconductivity.

The full extent of the scandal began to unfold. According to an investigation by Nature’s news team, Diaz’s team members had not observed the key superconducting phenomenon, the “Meissner effect,” in their experiments but were instructed to quickly submit the paper draft to Diaz. Many graduate students had doubts about some of the data in the paper, but under the authority and pressure from their professor, they did not openly question these issues. As more reviewers and experts began to scrutinize the experimental data, they discovered that it was likely manipulated.

While Diaz’s first paper faced severe criticism, he claimed to have discovered room-temperature superconductivity in another material — a compound of lutetium and hydrogen (LuH). However, the measurement data in this study was also full of issues, with many students pointing out systematic errors in the experiments. Some even felt that they had been “self-deceiving.” Despite the growing criticisms, Diaz proceeded with the publication, but eight of the eleven co-authors ultimately requested the retraction of the paper.

This series of academic scandals has not only severely damaged Diaz’s reputation but also affected the entire scientific community. Many young scientists’ career prospects became uncertain due to their involvement in these studies, and trust in academia was also harmed. Paul Canfield, a physicist at Iowa State University, commented, “This scandal has harmed the careers of young scientists, especially those in the field of superconductivity.”

Meanwhile, another key player in the room-temperature superconductivity field, the LK-99 team from South Korea, became embroiled in similar controversies. Despite their claim to have discovered a new “room-temperature superconductor” — PCPOSOS — in 2024, many in the scientific community expressed doubts about the authenticity of their research. The data presented by the team at academic conferences was similar to the previous LK-99 studies and lacked sufficient verification.

After the announcement of the superconductivity breakthrough, certain South Korean stocks related to superconductivity attracted a surge of investors. Stocks of smaller South Korean companies like Duksung Co. and Sunam Co. saw their prices hit the daily limit increase of 30% for three consecutive days. Sunam Co. surged by about 260% in the past six trading days, while Duksung gained 170%. Mobiis Co. saw a 30% increase on Thursday, and Shinsung Delta Tech Co. briefly rose by 21%, hitting a historic high.

Later in the investigation, the Korea Superconducting Society Verification Committee stated that LK-99 did not show the Meissner effect and could not be proven to be a superconductor. This news caused fluctuations in the prices of Chinese superconducting stocks, with Falssen and Zhongfu Industrial seeing significant declines. The former is not involved in superconducting technology, while the latter only provided space and equipment support. At the same time, U.S. superconducting companies saw their stock prices fall by 29%, and Sumitomo Electric Industries also experienced a decline due to poor earnings.

3. Overview of the DeSci Ecosystem

3.1 BIO Protocol

The BIO Protocol, which has received investment from Binance Labs, has been dubbed the “Y Combinator of On-Chain Science.” It is designed for early-stage company incubation, providing funding and resources to accelerate project development. According to TechFlow, the main components of BIO Protocol include BioDAO, a curation system, liquidity and IP transformation, and incentive mechanisms.

$VITA (VitaDAO): VitaDAO, founded in 2021, focuses on funding and promoting early-stage longevity research aimed at extending human healthspan. It is managed by $VITA token holders.

$RSC (ResearchCoin): Used to reward users’ contributions on the ResearchHub platform. The goal is to accelerate scientific research by incentivizing community contributions. Anyone can earn $RSC by sharing, curating, and discussing academic science on 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): A decentralized organization focused on anti-aging drugs and longevity projects.

3.2 Pump.Science

The Solana-based DeSci platform Molecule DAO launched the meme token platform Pump.science at the Solana Breakpoint 2024 conference. Pump.science will issue meme tokens representing pharmaceuticals on Pump.fun. Some of its concept tokens include:

$RIF (Rifampicin): Rifampicin is an antibiotic that has garnered attention for its surprising effects on aging. In model organisms like Caenorhabditis elegans (a nematode often used in aging research), Rifampicin has been shown to activate the cell’s natural defense mechanisms to combat stress and damage. It acts like a “cell coach,” protecting cells from harmful oxidative stress and maintaining protein quality, encouraging the cells to stay healthy and resilient. These protective effects help the worms live longer and healthier.

$URO (Urolithin A): Urolithin A is a compound produced in the body after consuming foods rich in ellagitannins, such as pomegranates. It plays a special role in helping the body perform “spring cleaning” at the cellular level. Urolithin A aids in clearing old, dysfunctional mitochondria (the cell’s energy factories) and promotes the growth of new, healthy mitochondria in a process known as mitophagy. Studies show that it can extend the lifespan of C. elegans by making cells more efficient and energetic.

3.3 Donation Concept

$Scihub: A non-official token donated by @0xAA_Science, intended to support open-source research paper websites. The token is derived from the Sci-Hub shadow library concept, which is a community meme token. Sci-Hub is a non-profit, non-governmental platform that provides free access to academic papers. Besides resources like Google Scholar, Sci-Hub, LibGen, and PubMed, it also integrates a range of other publicly available academic resources from both Chinese and English-language sources, allowing one-stop access to download scholarly articles, patents, books, and more.

3.4 DeSci Quantum Meme

$ANTI — Antitoken and $PRO — Protoken: A pair of tokens that express opposing views on meme tokens. Created by algorithm engineer and mathematical physics expert @sshmatrix_, the tokens are designed so that 1 $ANTI and 1 $PRO rise and fall together.

4. How Long Can the Elixir of Life on the Blockchain Last?

DeSci is not a concept that emerged this year; its sudden surge in popularity can be attributed to three key factors: Binance’s investment in BIO Protocol, CZ and Vitalik discussing DeSci together, and a16z leading a funding round for DeSci project AmionChain. The market also requires the “pump is justice” mentality to drive this forward. Despite the current market situation, DeSci largely remains driven by memes, but its fundamental properties distinguish it from other meme-driven narratives.

• Difference from Other Memes: Unlike memes in other sectors like AI, zoos, or art, DeSci requires a strong, influential figure to “carry the product.” It may not be able to sustain itself purely through internal community influence and needs prominent figures from the “scientific research” world to help propel its narrative.

• Valuation of Leading Projects Must Continue to Rise: Currently, the DeSci space has yet to produce a $1 billion market cap leader. Compared to other meme sectors, DeSci still holds considerable market potential. Major centralized exchanges have not yet listed DeSci-related tokens, and large-scale funding has not yet emerged at the first level.

• DeSci May Have Greater Potential to Break Out of the Niche: While the PVP market is fiercely competitive, if a prominent figure with a “scientific” background outside the current circle uses DeSci’s narrative for fundraising or donations, it could gain more traction. Similar to crowdfunding for rare editions of the U.S. Constitution via $PEOPLE, the $DOGE journey to the moon with Elon Musk, and the auction of Beeple’s “Everydays: The First 5000 Days” at $69 million at Christie’s, DeSci shares a similar core logic. Its marketing potential is comparable to how Jia Yueting tried to launch cars in the crypto space with a PPT plan.

About YBB

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Extended Links:

(1) NSF News on Science Funding
(2) Chinese Government’s R&D News