Peer-to-Peer Science Funding

Funding is managed by self-executing smart contracts on a blockchain. These contracts hold funds in escrow and release them automatically when pre-defined milestones are verified, eliminating the need for a trusted intermediary. This creates a transparent and trust-minimized flow of capital from backers to researchers.

A core mechanism is retroactive public goods funding (RetroPGF), where contributors are rewarded for work that has already proven its value. This contrasts with speculative grants. Funding can also be structured as:

• Milestone-based payouts for incremental progress.
• Bounties for solving specific, well-defined problems.
• Continuous funding streams for ongoing projects.

Project selection and fund allocation are often managed by a decentralized autonomous organization (DAO) or a community of token holders. This uses mechanisms like:

• Quadratic funding to amplify small donations and signal community preference.
• Conviction voting for continuous fund allocation.
• Peer review by domain-expert committees elected by the community.

All transactions, proposals, milestone submissions, and governance votes are recorded on a public ledger. This creates an immutable audit trail, allowing anyone to verify:

• How funds are allocated and spent.
• The research progress and outputs.
• The decision-making history of the funding body.

Projects may issue governance tokens or non-fungible tokens (NFTs) to represent contribution, access, or ownership. This aligns incentives by allowing:

• Backers to gain governance rights or a share of future revenue.
• Researchers to retain ownership of their IP while raising funds.
• The community to capture value from the research they fund.

P2P science funding intersects with several key Web3 paradigms:

• Public Goods Funding: Financing non-excludable resources like open-source software or data.
• DeSci (Decentralized Science): The broader movement applying Web3 tools to scientific research.
• Example Platforms: Gitcoin Grants (quadratic funding), VitaDAO (biomedical research), LabDAO (open research infrastructure).

Removes traditional intermediaries like grant committees and centralized institutions, allowing funds to flow directly from donors or token holders to researchers. This reduces administrative overhead, accelerates disbursement, and minimizes the potential for bureaucratic bias in project selection.

All financial transactions and funding decisions are recorded on a public ledger. This creates an immutable, transparent record of:

• How funds are raised and distributed.
• Which research proposals received funding and why.
• How grant capital is being spent, enabling real-time accountability for backers.

Enables innovative economic models to align incentives between researchers, funders, and the public. Examples include:

• Retroactive Public Goods Funding: Rewarding projects based on proven, verifiable impact after the work is done.
• Intellectual Property NFTs: Tokenizing research outputs, data sets, or patents, allowing funders to share in future value.
• Impact Certificates: Tradeable tokens representing a unit of verified scientific contribution.

Opens the funding landscape to a global pool of talent and capital. Researchers from underfunded regions or unconventional backgrounds can submit proposals without institutional gatekeeping. Similarly, anyone with an internet connection can become a micro-patron, funding research aligned with their values through mechanisms like quadratic funding.

Shifts decision-making power to a decentralized community of stakeholders (e.g., token holders, domain experts). This allows for:

• Proposal Voting: The community directly votes on which research projects to fund.
• Treasury Management: Collective governance over a shared funding pool (DAO treasury).
• Iterative Funding: Supporting projects in stages based on milestone completion verified by the community or oracles.

Facilitates the creation of on-chain reputation for researchers and institutions based on their funded work's outcomes and data. Successful projects and reproducible results contribute to a verifiable track record, creating a trustless meritocracy. This reputation can be used in future funding rounds, reducing reliance on traditional credentials alone.

A core challenge is ensuring scientific rigor without traditional peer review. Decentralized Autonomous Organizations (DAOs) must develop robust mechanisms for evaluating proposals and verifying results. Key issues include:

• Preventing funding of low-quality or fraudulent research.
• Establishing standards for data sharing and methodology transparency.
• Ensuring funded research is reproducible, a known crisis in traditional science.

Designing effective tokenomics and governance is critical. Poorly structured systems can lead to vote buying, plutocracy, or short-term speculation over long-term science. Considerations:

• Who gets voting rights (token holders, domain experts, the public)?
• Aligning token value with genuine scientific progress, not hype.
• Avoiding governance fatigue among participating researchers.

DeSci operates in a gray area of existing law. Key uncertainties include:

• Intellectual Property (IP) rights for open-source research and how to commercialize discoveries.
• Compliance with geographic regulations for human subjects research or biosecurity.
• Tax and legal status of research grants distributed via tokens or smart contracts.

Most DeSci projects rely on volatile crypto treasuries and speculative funding. Long-term sustainability requires:

• Diversifying revenue beyond token sales (e.g., IP licensing, grants).
• Attracting large-scale, stable capital from traditional philanthropy or institutions.
• Building sustainable models for ongoing project maintenance beyond initial crowdfunding.

The current user experience excludes many scientists. Barriers include:

• Complexity of crypto wallets, gas fees, and blockchain interactions.
• Lack of integration with existing scientific workflows and publishing platforms.
• The "know-your-customer" (KYC) paradox for anonymous, permissionless participation.

Replacing institutional prestige with decentralized reputation is unsolved. Systems must:

• Quantify and trustlessly verify a researcher's contributions and credibility.
• Prevent sybil attacks where users create multiple identities to game the system.
• Interface with traditional metrics (citations, h-index) while incentivizing new forms of contribution.