Unlocking Scientific Innovation Through Decentralized Science – Part I

The last decade has been marked by exponential technological advancement in distributed ledger technology and blockchain. Blockchain is mostly associated with cryptocurrencies, however, more non-crypto applications of blockchain have emerged in the past couple of years. Decentralized Science (“DeSci”) is a new captivating emerging non-crypto application of blockchain that holds transformative potential for the scientific community. DeSci is a novel decentralized approach to research funding and collaboration between different stakeholders in scientific research and has the potential to bring about some much-needed change in science as an institution.

Blockchain and DeSci

Blockchain as technology was first introduced by Satoshi Nakamoto’s whitepaper on Bitcoin in 2008 amidst the financial crisis.[1] Although this technology was introduced to disrupt the financial system by creating a decentralized distributed financial system based on the internet, many argue that the main ideology behind blockchain is social change.[2] By using technology that is rooted in decentralization, transparency, and security, the drive behind blockchain is to create social change which is aimed at addressing the shortcomings of traditional centralized systems, namely a lack of trust and corruption in public and private spheres. 

Blockchain as a distributed ledger technology offers multiple advantages including being a secure way of interacting with other parties without the intervention of a centralized third-party authority. Further, the technology itself, due to its distributed nature, is a quasi-immutable and a transparent system that builds trust between parties in the way they interact with each other.[3] The advantages of providing autonomy, accessibility, and transparency make this technology a good fit for its application in science since it provides a solution to the problems that science as an institution is facing. 

Maintaining the original ideology behind blockchain technology, DeSci is aiming to create a decentralized distributed scientific research model that incentivizes transparency, accessibility, collaboration, and the democratization of science. DeSci leverages blockchain as a technology to create a public infrastructure for scientific research utilizing blockchain tools such as smart contracts, and decentralized autonomous organizations (“DAOs”) on the Web3 stack.[4]  

A smart contract is not a contract in a legal sense, but rather a small bit of code that makes up a simple computer program that automatically runs the operation of conditional actions.[5] These computer programs are called smart contracts since they are auto-executable, i.e. once certain conditions have been met, they will execute all or part of an agreement and store it on a blockchain-based platform, all by themselves.[6] Although the concept of smart contracts has existed for some time, for example, vending machines, by combining the concept of a smart contract with blockchain technology, smart contracts can leverage all the advantages that blockchain provides, for instance, eliminating the need for a centralized intermediary, providing transparency, security, permanency, and immutability in the distributed ledger technology. 

Decentralized autonomous organizations (“DAOs”) are entities that autonomously, through their underlying code, exist on the internet and are governed by collective action and decision-making by their members using blockchain technology.[7] In essence, DAOs are made up of several different smart contracts, with each smart contract representing an aspect of the usual operational rules and actions of the governance of a normal organization, which executes autonomously once certain conditions have been met.[8] Unlike a normal organization, DAOs operate their governance scheme through computer code on the blockchain without the need for a centralized governance structure, by utilizing the advantages of blockchain technology such as transparency, immutability, security, and permanency.  

Although DeSci does not aim to solve all of the problems that science as an institution is experiencing, currently, the main goal of DeSci is to address challenges that relate to the funding, the organization, and the openness of science.

Why Blockchain and Science?

The institution of science has existed for centuries, and although it has produced ever-evolving knowledge and innovation, science as an institution has not adapted to the new technological age that we live in today. Science as an institution is built on centralized networks consisting of hierarchical structures which are struggling to keep up with a more complex, uncertain, digital, and diverse society.[9]  The rising concern about the lack of trust and corruption in science as an institution over the past couple of years gave rise to the new movement of DeSci. 

Some of the biggest problems that science, as an institution, is experiencing in the 21st Century, are funding, the organization of science, and the need for greater transparency during the scientific process.[10] From a funding perspective, funding for basic research and translational research is a challenge, as well as obtaining funding to commercialize intellectual property ownership over new inventions and research data. From an organizational and transparency perspective, the peer review process of the publication of research, access to research data and methods, communication and collaboration between researchers, and reproducibility and replicability of research results are causing challenges in the scientific community. DeSci can be applied across these problems to provide a decentralized platform for the funding, organization, and openness of science.[11] This blog post will focus on how DeSci can assist with funding for scientific research.

The scientific industry’s process of producing new knowledge and inventions can be broken down into different stages, mainly known as the basic research and clinical research stages. Those two main stages are connected by translational research, which aims to translate or convert the results of basic research into products that can be studied through clinical research, for them to be commercialized into products that can benefit society. Currently one of the biggest problems in biomedical scientific research is the gap between basic research and clinical research, known as the “Valley of Death”.[12] Due to a lack of translational research, new knowledge and innovations produced at universities and other research institutions do not get translated into products for human applications and treatments. The Valley of Death prevents breakthrough therapies from reaching patient groups with no alternative treatment options and has been problematic for more than 10 years.[13] Many factors contribute to the problem of the Valley of Death, with funding for translational research being one of the main problems.[14]

Efforts have been made over the past couple of years to intentionally provide more funding to translational research. One effective approach is to promote the relationships between different actors involved during the different phases of research. By promoting relationships between universities and business support structures, such as venture capitalist and private funders, there is closer proximity between these actors, which assist in closing the Valley of Death gap by providing a support structure for translational research.[15] One way in which such relationships can be facilitated is through DeSci.

Another problem with the current research funding landscape is how basic research grants are being determined. Researchers’ success depends on their ability to obtain research grants, however, research funding is becoming more biased and inefficient.[16] Research funding agencies have long-standing specific metrics which are used to determine how research grants are allocated. The focus of such metrics is usually on the expected outcomes of scientific research, and less on exploration and non-conventional research.[17] There is increased institutional pressure on researchers over the past couple of years to optimize their publication outputs, and the quantity of their research, rather than focusing on the quality of their research.[18] This has caused a lack of research funding for junior scientists pursuing non-conventional research. 

One way in which junior researchers have tried to address this problem is by obtaining research funding via crowdfunding websites.[19] Although crowdfunding has been successfully used by some scientists for research, crowdfunding in the scientific field has its challenges such as additional administrative and accounting challenges, weaker investor protection, risks of fraud, as well as issues surrounding IP protection.[20] Funding through DeSci is similar to the concept of crowdfunding, however, the underlying technology of blockchain addresses the problems that traditional crowdfunding platforms are posing. 

Part II of this blog will discuss how DeSci can address the “Valley of Death” problem, provide an example of a current DeSci funding project, and briefly discuss some of the risks associated with DeSci. 

[1] Bitcoin: A Peer-to-Peer Electronic Cash System, https://bitcoin.org/en/bitcoin-paper.

[2] Behind the crypto hype is an ideology of social change, Big Think (2022), https://bigthink.com/the-present/crypto-ideology-of-social-change/.

[3] Florence G’sell & Florian Martin-Bariteau, The Impact of Blockchains for Human Rights, Democracy, and the Rule of Law, (2022), https://papers.ssrn.com/abstract=4170324.

[4] Decentralized science (DeSci), ethereum.org, https://ethereum.org.

[5] G’sell and Martin-Bariteau, supra note 3.

[6] Alex Lipton & Stuart Levi, An Introduction to Smart Contracts and Their Potential and Inherent Limitations, The Harvard Law School Forum on Corporate Governance (2018), https://corpgov.law.harvard.edu/2018/05/26/an-introduction-to-smart-contracts-and-their-potential-and-inherent-limitations/.

[7] DAOs, DACs, DAs and More: An Incomplete Terminology Guide, Ethereum Foundation Blog, https://blog.ethereum.org/2014/05/06/daos-dacs-das-and-more-an-incomplete-terminology-guide.

[8] G’sell and Martin-Bariteau, supra note 3.

[9] Wenwen Ding et al., DeSci Based on Web3 and DAO: A Comprehensive Overview and Reference Model, 9 IEEE Transactions on Computational Social Systems 1563 (2022).

[10] Grand challenges for science in the 21st century, (Balázs Gulyás et al. eds., 2018).

[11] Decentralized science (DeSci), supra note 4.

[12] Attila A. Seyhan, Lost in translation: the valley of death across preclinical and clinical divide – identification of problems and overcoming obstacles, 4 Translational Medicine Communications 18 (2019).

[13] Declan Butler, Translational research: Crossing the valley of death, 453 Nature 840 (2008).

[14] Seyhan, supra note 12.

[15] Francesco Calza et al., Moving drug discoveries beyond the valley of death: the role of innovation ecosystems, 24 European Journal of Innovation Management 1184 (2020).

[16] Dennis Murray et al., Bias in Research Grant Evaluation Has Dire Consequences for Small Universities, 11 PLOS ONE e0155876 (2016).

[17] Ding et al., supra note 9.

[18] Jens Ducrée et al., DeSci – Decentralized Science, (2022), https://www.preprints.org/manuscript/202205.0223/v1.

[19] Holly Else, Crowdfunding research flips science’s traditional reward model, Nature (2019), https://www.nature.com/articles/d41586-019-00104-1.

[20] Loreta Valanciene & Sima Jegeleviciute, Valuation of Crowdfunding: Benefits and Drawbacks, 18 Economics and Management 39 (2013).