A New Kind of Science Organization

How can DeSci DAO’s better align incentives for funding basic science research?

1. Overview

It has been widely argued that science research is commercially underfunded because its high risk nature, and long-term nature make it challenging to capture value generated from commercial investment$^{1-5}$. Philanthropic donors and institutional grant writers fill the gap for many categories of research, but without market forces this funding has historically been exposed to bad incentives and not necessarily aligned to maximize broad benefits to society, often resulting in unnecessarily risk-averse research. The situation is worse for basic science research, which does not have the value capturing benefits of intellectual property rights and is often lower on the list of attention grabbing causes that institutional donors consider deserving of funding, even though it arguably generates the most amount of good for humanity over the long term.

In this context, Decentralized Autonomous Organizations focused on science (DeSci DAOs) have started to appear as a possible alternative. These organizations use distributed governance and pooled resources to experiment with different ways of funding and organizing research. Their hope is that by shifting some decision-making and funding power away from traditional gatekeepers, DeSci DAOs might address some of the persistent incentive problems in science.

This research proposal aims to chronicle the history of DeSci DAOs up to this point, and explore the ideas being utilized in Web3 to address long standing issues in doing and funding science. We will investigate the potential for Decentralized Autonomous Organizations and Decentralized Science to establish new incentives and abilities for donors to fund researchers working on important science that might otherwise not be supported.

We will explore the following research questions.

What is the history and current landscape of DeSci and research orientated DAOs?
What might be some emerging best practices, technically and legally, for US-based DAOs given the recent changes in government sentiment and regulation?
What are some of the hurdles and pitfalls that existing DeSci DAOs have faced?
What are some ways for DeSci DAOs to attract and retain top scientific talent?

Is it possible to align incentives in DeSci DAOs so that funding decisions consistently prioritize research with the greatest benefit to society across multiple time scales, while also considering value capture from commercial applications as a sustainability tool?

These questions will be explored through an extensive review of literature, community content, and interviews. The interviews will be with important stakeholders and leaders in DeSci, Crypto, and basic science, as well as regulators, token holders, and investors. The money raised for this proposal will to fund:

A peer-reviewed paper exploring the above research questions.
A literature review-style collection of resources on the best technical and legal practices to start a DeSci DAO in the US.
8 blog articles and online research presentations going through intermediate research for the final whitepaper.
2 hours of regular weekly “office hours” with the ResearchHub community to answer questions, ask for feedback, gain insight, discuss findings etc.

The project described in this proposal follows open science principles and has an estimated duration of 6 months.

2. Introduction

The vast majority of science funding today comes from either public funding from the NIH or NSF, or from private funding focused on some potential commercial application.

Academic funding is biased against projects that challenge the fundamental assumptions or “best practices” of a given field. As an example, the choice of C57/B6 “black 6” mice as model organisms for the vast majority of biomedical research is partially due to the fact that the model is familiar to most funding decision-makers$^6$. Even when researchers provide empirical justification, it can be challenging for studies which use alternate genetic variants to receive funding from funding agencies.

When value is hard to capture, venture funding is almost nonexistent, regardless of the value to society and the ultimate economic benefits that follow$^7$. Fundamental research in mathematics, theoretical physics, and computational complexity have enabled enormous technological progress decades later but the payoffs are too distant and diffuse to attract private funding. This phenomenon is so pervasive and severe that it is sometimes referred to as the “valley of death”$^8$. Research on treatments for problems like drug addiction (substance use disorder) would have enormous societal impact. However private funding in this area is minuscule as the primarily affected group often lacks resources to make the eventual commercialization of the research profitable.

DeSci DAOs have already illustrated their ability to fund societally valuable research that the primary funding sources would miss. VitaDAO, a longevity focused DeSci DAO, has given over half a million dollars to a project that is understanding existing pharmaceuticals which have correlations with longevity$^9$. It seems reasonable to expect that the VitaDAO authors are right in their assertion that this research will provide pharmaceuticals which can extend the human lifespan “at a lower cost and over faster timelines than conceivably possible with de novo drug discovery”. This research would have been unlikely to receive funding from traditional public or private funding sources. The “observation first, mechanism later” approach, the amount of money required, and the targeting of aging generally, as opposed to a specific aging-related disease, would make this project unlikely to receive NIH funding. The fact that the focus is on existing drugs as opposed to new drugs (which could be patented and sold at a large profit margin) would scare off traditional private funding sources. Many of the projects that have been funded through ValleyDAO, AthenaDAO, PsyDAO, or even right here on ResearchHub, will tell similar stories. Projects which are solving humanity's most important problems which would not have received funding without the DeSci DAO funding mechanism.

In a recent paper by Weidener and Boltz (both based at bio.xyz) they interview ten experts in the DeSci DAO space to understand what the key challenges are$^{10}$. Our specific research questions are informed by the issues highlighted in this paper, which could block DeSci DAOs from being an effective alternative for science funding.

What is the history and current landscape of DeSci DAOs, especially with regard to incentive structure?

Very little research has been done on DeSci DAOs in general. As far as the authors of this research proposal can tell, there has been no research to understand, compare, or contrast the incentive structures in DeSci DAOs. To understand how DAOs might be optimized, it is important to first understand what is out there, including a review of what caused their evolution over time, from early experiments to current models.

What are some best practices, technically and legally, to set up DeSci DAOs in the US?

Accounting issues, treasury management, and multi-jurisdictional compliance, were all reported as problems by experts$^{10}$. They also mentioned that each DAO is solving these problems independently with little to no knowledge sharing. Operational inefficiencies divert resources to overhead that could be used for important research. A simple list of best practices gained from engaging with experts and the community can be a meaningful starting point for further development. Additionally, recent changes to US cryptocurrency laws make this an ideal time to understand some of the legal best practices in this area$^{11}$.

What are some of the hurdles and pitfalls that existing DeSci DAOs have faced?

Early DeSci DAOs have encountered significant challenges in scaling operations while maintaining decentralized governance$^{10}$. These issues can result in fragmented community engagement and resource mismanagement, potentially undermining the DAOs ability to support high-impact science. By examining case studies of both successful adaptations and outright failures, this research will identify patterns to help future DAOs avoid similar traps and build more resilient structures.

How might we align incentives in DeSci DAOs with value to society over multiple timescales?

Decentralized tokenomics provides a myriad of methods to structure incentives. Token holders without expertise being decision makers, and token holder participation in general have been identified as major issues in DeSci DAOs$^{10}$. We aim to explore ways to set up tokenomics so that token holders make decisions that are well-aligned to bring about positive value from basic science research.

We will also explore ways for DeSci DAOs to sustain research by capturing value generated, without turning a DeSci DAO into a venture capital DAO. Focused Research Organizations (FRO) are another recent phenomenon in science funding which has managed to capture potential commercial value produced without exclusively focusing on research which will generate commercial value$^{12}$. Special attention will be paid to the incentives and mechanisms that make this possible in FRO’s with the goal of figuring out how similar incentives and mechanisms could be structured into DAOs.

How might DeSci DAOs attract and retain top talent in science?

There is a noticeable talent gap between DeSci contributors and scientists funded by more standard funding models$^{10}$. Lack of knowledge of Web3 technologies, researcher accountability, and administrative issues with university technology transfer offices were all complex issues pointed out by experts which could contribute to this talent gap. If these issues can be solved it could lead to a DeSci talent boom which could accelerate its ability to provide unique societal value.

3. Methods

Participants/Sample

The exploratory research will engage a diverse range of experts and stakeholders through in-depth interviews. Participants will include:

Founders and executives from existing DeSci DAOs and projects.
Science policy experts and research funding specialists who can provide context on current gaps in traditional funding models.
Legal experts specializing in DAO formation, securities law, and non-profit governance.
Scientists and researchers who have participated in or considered DeSci funding mechanisms, including both successful and unsuccessful experiences.
Entrepreneurs and investors who have built businesses around scientific research outputs and can speak to commercial incentive alignment.
Technical experts in DAO infrastructure, tokenomics design, and blockchain governance mechanisms.
Members of DeSci DAO communities, engaged through participatory observation in discussion forums and community activities.

Materials and Procedures

The research employs an iterative, multi-method approach combining comprehensive literature review, expert interviews, active participation in DAO communities (including joining as many DeSci DAOs and their discussion forums as possible to integrate with the community and observe dynamics firsthand), the creation and analysis of an extremely minimal "toy" DAO to understand technical and legal requirements in practice,and analysis across four primary deliverables. Research methods include systematic searches of academic databases and DeSci “grey literature” as well as interviews with numerous experts.

Deliverable 1: Peer-Reviewed Whitepaper

Comprehensive academic analysis exploring all five research questions. The whitepaper will synthesize findings from literature review and expert interviews. It will provide theoretical frameworks to understand how DAOs might address funding gaps in societally valuable research.

Deliverable 2: Organized Collection of Resources for DeSci DAO Implementation

Detailed operational guide providing step-by-step best practices for establishing and operating societally aligned DeSci DAOs within U.S. legal frameworks. The collection will address entity formation strategies, compliance requirements, treasury management, token design, governance structure implementation, and talent acquisition mechanisms, organized as a literature review-style compilation of resources, case studies, and synthesized insights.

Deliverable 3: Eight Blog Articles and Research Presentations

Intermediate research findings will be published through eight blog articles (two a month for the first four months) and accompanying live online presentations.

Deliverable 4: Weekly Community Office Hours

Bi-weekly two-hour sessions with the ResearchHub/Wolfram Institute community to provide ongoing engagement throughout the research process. Sessions will include progress updates, collaborative problem-solving discussions, and direct feedback collection from community members. All sessions will be recorded with key insights integrated into research findings and used to refine research directions based on community input and emerging questions.

Planned Analyses

The analysis pipeline will be a qualitative thematic analysis of interview transcripts, community observations, toy DAO experiment notes, and literature sources. Some preprocessing in transcribing audio interviews, anonymizing participant data per consent agreements, and organizing literature into thematic categories.

There are no statistical tests, as this is exploratory qualitative research without quantitative data or formal hypotheses. Rather, findings will be synthesized narratively, and use cross-verification between interview themes, community insights, experiment outcomes, and literature to identify patterns in incentive structures, best practices, and value capture mechanisms.

The follow contingencies have been prepared:

IF fewer than 15 expert interviews are obtained, THEN supplement with additional targeted literature searches or community feedback from office hours to ensure comprehensive coverage.
IF legal changes occur during the study (e.g. new U.S. crypto regulations), THEN prioritize updated expert consultations for Question 2.
IF participant recruitment reveals biases (e.g. over representation from certain DAO types), THEN expand outreach to underrepresented stakeholders and increase engagement in diverse DAO communities.

Ethics and Data Management

Research will adhere to open science principles throughout all phases. Interview participants will provide informed consent with options for anonymity or attribution. Direct quotations or references from interview participants will only be used with express participant permission. Insights gained from DAO community participation will remain entirely anonymous, with no identifiable information about individuals or specific discussions disclosed. Observations will be aggregated and generalized and no direct quotes or attributable content will be used without explicit consent. All research outputs, data, and analysis will be published openly under Creative Commons licensing to maximize accessibility and community benefit.

4. Budget

The research requires $37,000 total funding over six months.

Personnel costs of $30,000 support one full-time researcher conducting intensive investigation, interviews, analysis, and writing across all deliverables.

Additional costs of $7,000 cover expert consultations for specialized legal and technical review, potential travel for critical stakeholder meetings, any minor costs associated with setting up the toy DAO, ResearchHub community engagement bounties, software and database access fees, and contingency funding for unexpected research opportunities or community-identified priorities.

Should we raise less than the above numbers we will consider a scaled down version using the available funds. Should we exceed the target funding amount we will bring on additional researchers and assistants to expand the breadth and scope with more interviews, a more advanced practical experiment, and pay for peer reviews and journal submission fees.

5. References

Azoulay, P., Fuchs, E., Goldstein, A. P. & Kearney, M. Funding breakthrough research: promises and challenges of the "ARPA Model". Innovation Policy and the Economy 19, 69–96 (2019).
Mattey, J. Reasons for public support of research and development. FRBSF Economic Letter 1998-16 (Federal Reserve Bank of San Francisco, 1998). https://www.frbsf.org/research-and-insights/publications/economic-letter/1998/05/reasons-for-public-support-of-research-and-development
European Commission. Annex D: Economic incentives to business R&D. Services and Innovation: Dynamics of Service Innovation in the European Union (European Commission, Brussels, 2002).
Nelson, R. R. The simple economics of basic scientific research. J. Polit. Econ. 67, 297–306 (1959).
Mazzucato, M. Mission Economy: A Moonshot Guide to Changing Capitalism. (Harper Business, New York, NY, 2023).
Telford, A. The Mouse as a Microscope. Asimov Press https://doi.org/10.62211/75pw-88uu (2024).
Grimpe, C. & Hussinger, K. Resource Complementarity and Value Capture in Firm Acquisitions: The Role of Intellectual Property Rights. Strategic Management Journal https://doi.org/10.1002/smj.2181 (2014).
Rykova K. Overcoming high mortality of innovative ideas (‘Valley of Death’) for scientific and educational environment: a bibliometric analysis. Economic Sustainability and Business Practices 2024;1:74-83. https://doi.org/10.21272/1817-9215.2024.3-09.
Scheibye-Knudsen, M. The Longevity Molecule - Scheibye-Knudsen Lab. VitaDAO https://www.vitadao.com/projects/scheibye-knudsen-lab (2025).
Weidener, L. & Boltz, L. Challenges of DAOs in Decentralized Science: A Qualitative Analysis of Expert Interviews. SSRN https://dx.doi.org/10.2139/ssrn.5239018 (2025).
Hagerty, B. Guiding and Establishing National Innovation for U.S. Stablecoins of 2025. S.394, 119th Cong. https://www.congress.gov/bill/119th-congress/senate-bill/394/text (2025).
Marblestone, A. et al. (2022) ‘Unblock research bottlenecks with non-profit start-ups’, Nature, 601(7892), pp. 188–190. doi:10.1038/d41586-022-00018-5.

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A New Kind of Science Organization

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