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Life sciences and biotech have long driven transformative advances, from life-saving therapeutics to precision diagnostics, from detergent enzymes in laundry to bacteria that turn carbon into cloth. In a talk I gave at Synbiobeta 2025, I told a story about a single species could cool down the entire planet significantly.
The power of biology is marvelous. It's the technology of everything.
However, despite the sector's promise, traditional funding mechanisms often fall short of supporting early-stage, disruptive ideas. On the other hand, it also kinds of blocking opportunities for investors to make money on those potential innovations.
Today, Bio Protocol’s (BIO) just launched on Binance and ETH, Solana & Base, via Binance Launchpool. For people who are not familiar with the crypto world, Binance is now the largest cryptocurrency exchange platform globally, trading over 11 billion USD per day.
Exemplified by Bio Protocol, would blockchain-based funding models provide an alternative? To democratize access to capital, incentivize collaboration, and drive more impactful discoveries?
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The historical evolution of biotech funding, from post-WWII research grants to the VC boom fueled by landmark successes like Genentech, has defined the funding model of biotechnology. Key milestones include:
A lot of these credit go to Genentech and its peers. Genentech's early success with human insulin, a famous partnership with Eli Lilly, demonstrated the potential for significant financial returns in the biotech industry. It only took them approximately 4 years from their foundation to their IPO, which was the largest IPOs at that time, until Apple's later in 1980. After that, the entire revolution of biological drugs and therapeutics started.
This model works so well, as biotechnology is generally incredibly powerful, and capable of making tons of fortune. Shown below, Bruce L Booth & Bijan Salehizadeh demonstrated that biotech investment is significantly better than the tech industry (IT, software, media, hardware etc.) in a 2011 article published in Nature Biotechnology.
Moreover, it works even better than dot-com bubble in recent years.
However, this model, while being undeniably transformative and positive in many ways, turned itself into a dynamic attractor, a local minima, and fostered conservatism in the entire industry.
The success of the Genentech-like model created an escalation of prioritizing "blockbuster" therapies and established modalities for large markets. This rigidity raises the bar for unconventional biotech ventures, marginalizing projects outside therapeutics or with disruptive business models. Now, by default, people would think "biotech company" is a more-or-less therapeutics development company. Whoever works in other areas, has to make new names for them, like "techbio" etc.
Even established giants cannot escape this gravity. In 2000, Novo Nordisk (the company behind recent weight loss drugs drugs Ozempic and Wegovy) had to spin off Novozyme, who makes over 50% detergent enzymes in your laundry powder. In 2023, Johnson & Johnson (J&J) spin-off of their consumer products which included well-known brands like Band-Aid, Tylenol, and Johnson's Baby Powder, into a new company called Kenvue.
Moreover, this emphasis on binary outcomes and non-recurring revenues perpetuates challenges in valuation, making biotech always in a boom-and-bust cycle.
In the long term, it hurts the development of the biology-related economy. Unlike tech industry, no biotech company have reached 1 trillion USD valuation, and no one founded after 1990 has reached a $100 billion valuation, with the exception of Moderna due to COVID-19.
In the last 10 years, the NASDAQ Biotechnology Index performed much worse than NASDAQ-100, even worse than the S&P 500.
Apparently, new models are needed!
Blockchain and Web3 technologies have introduced new paradigms for resource allocation and community engagement. Platforms like Bio Protocol (not the scientific journal, but a new web3 platform) leverage decentralized finance (DeFi) principles to create novel funding ecosystems. Here are some key elements:
This approach not only democratizes funding but also aligns the interests of researchers, funders, and the broader community.
For example, Molecule, an early innovator in decentralized science (DeSci), demonstrated how blockchain-based models can fund scientific projects. Their collaboration with researchers in fields like neurodegenerative disease and synthetic biology has already resulted in multiple funded projects that would have struggled to gain traction through traditional funding pathways.
I know, it may not sound serious nor scientific at all at the first glance. After all, cryptocurrency had its fame.
Nonetheless, it may have some potential. The timing could be good. Cryptocurrency has grown into a large enough financial ecosystem, and right now it is going high; whereas the biotechnology market is at a relatively lower point worldwide, thus people could be more openly minded right now.
This could at least provide some alternative liquidity for early stage innovation in biotechnology. And in my opinion, the early stage is actually the hardest moment for any innovation that is not a common-sense drug asset. For instance, if you are not a working on an ambitious idea for brain-machine interface, or like us, biological supercomputing, it could be more difficult than traditional therapeutic biotech companies to convince traditional VC firms to invest enough money for this. And today, it is still almost impossible to bootstrap such a moonshot biotech company.
As long as you pass a critical milestone and tractions, giving the history of how lucrative biology could be, I believe, there will be traditional VC and stock markets to take over later funding.
This would also enable individual investors to participate and potentially benefit into biotech innovations early. I mean, many public biotech companies are still under R&D. If they can be traded publicly, in principle, why not any biotech companies?
Before Robert Swanson, no one have a clear idea for how to commercialize genetic engineering. Today's established model was also a crazy idea back then. So, why not crypto?
On Molecule, we could have a taste of how this develops to fund future life sciences projects. Here you will find some of the projects are pretty serious, just like the one you may see in the research grant application.
Here are some notable examples I like personally:
Ab4AD: Dr Daniel Z. Bar from Tel Aviv University is developing antibodies for Alzheimer's Disease. This is quite a mainstream research field, I would say, with already 2 antibodies for early Alzheimer's disease patients with β-amyloid approved in US, where we defintely need more for therapeutics and diagnostic.
HempKnit: ValleyDAO and Dr. Georg Guebitz Austrian Centre of Industrial Biotechnology are engineering fibers that could outlast current fabrics using industrial hemp. Along with bamboo, hemp is among the fastest growing plants on Earth, and was also one of the first plants to used as fiber. With today's technologies in plant biology and synthetic biology, it is worth to have a revisit.
Transfidelity for Protein Stability: Dr Dimitri Scherbakov from University of Zurich is developing drugs to prevent neurodegenerative diseases by improving the accuracy of protein synthesis, thereby reducing the formation of harmful protein aggregates.
In my opinion, these are really decent scientific projects, and if work, could have a great impact. One could argue, some of the longevity companies backed by billionaires, VCs or Hollywood, are much more a hype than science.
While decentralized funding holds promise, there are several key aspects worth discussing to maintain a balanced perspective.
Blockchain, web3, and cryptocurrency apparently have become an industry, and just like all other industries, it created jargons and common patterns to facilitate internal efficiency but pose entry barriers. Although I've been interested in its tech and even hold some investments myself, when I was at this event Blockchain Meets Bio in 2023, many things are still quite difficult to understand for me. I bet it is the same other way around, biotech would only have more jargon.
Second, would these efforts again focus on those common topics, like drug, climate change, etc.? After all, they are easier to understand, but at the same time, it limits imagination and DeSci may not be better than a traditional model so much. In my opinion, DeSci community should think even more out of the box, than just funding another drug development.
Finally, I've heard a lot conversations about innovations in IPs. Navigating the regulatory landscape is critical to ensure compliance and avoid legal obstacles. Thus, is it necessary to innovate here, or it might be better to be compatible?
Just a thought. Solutions to make hybrid models, including both new and existing systems, may help mitigate these risks: combining crypto and fiat currencies, cloud labs and CROs, tokenization and traditional patents et cetera.
For biotech founders, life science researchers, and Web3 enthusiasts, this is a pivotal moment to rethink funding paradigms for the future of life sciences.
Century of Biology has passed through its lag phase, and now in the second quarter, it is about to enter the exponential phase! The next wave of biotech innovation is already forming. The question is: will you be part of it?
Disclaimer: Ailurus Bio is not currently associated with Bio Protocol or any other decentralized science (DeSci) project. This article reflects an independent analysis of the trends and opportunities in decentralized funding models.
Ailurus is a pioneering biocomputer company, programming biology as living smart devices, with products like PandaPure® that streamline protein expression and purification directly within cells, eliminating the need for columns or beads. Our mission is to make biology a general-purpose technology - easy to use and as accessible as modern computers.
