At Ending Age-Related Diseases 2021, Tyler Golato of VitaDAO discussed the concept of a DAO along with the promise and problems involved with decentralized corporate governance.
Hi everyone, I’m Tyler Golato, the Chief Scientific Officer at Molecule and also one of the co-initiators of VitaDAO, which is a decentralized collective that’s focused on funding longevity research. Thanks so much for taking the time to listen to my talk. It’s really a pleasure to be here again at Ending Age-Related Diseases 2021.
Today, we’re going to be talking about a pretty broad range of topics that all touch on decentralized funding and governance of longevity research with a particular focus through the lens of the case study with a project called VitaDAO, which is something I’ve been working closely on for about the past year, became public about it in the past six months. For me, it represents one of the really exciting experiments that’s going on with maybe finding new and innovative ways to fund and govern longevity research.
The talk today is going to be a little bit technical, but I’m going to try to demystify and simplify a lot of complex topics. We’ll be touching on many different aspects of decentralization, Web 3, Blockchain, as well as some of the key problems that researchers face in the longevity space when it comes to actually attracting funding. If some of those terms are unfamiliar, we’ll try to simplify everything to the greatest extent possible.
I think a lot of these terms, particularly things like cryptocurrencies and blockchain, are like speaking to someone about their concept of God or something; everyone probably has a different way of thinking about these things. Let’s see if we can try and simplify it and figure out how these technologies can be leveraged for the greater good, and specifically for funding things like longevity research, which I think we would all agree is incredibly important.
Before we go deep into VitaDAO and these novel funding approaches, I think it’s important to understand some some key terms. Things like decentralization, blockchain, cryptocurrency, what do these exactly mean?
Decentralization is really just referring to the transfer of control of an activity or an organization from one stakeholder to several. When we think about decentralization, you can see here there’s two representations. Many companies, for example, traditional organizations are centralized, so they have a central authority or central power that everything is built around.
Decentralized organizations are interesting, and the process of decentralization is interesting, because it spreads control and authority quite broadly, where there’s no reliance on, in this case, if you look at these diagrams, a single node. There’s often quite a bit of redundancy and often quite a bit of distribution of power.
A blockchain is actually somewhat simple. It’s just a system in which a record of transactions, typically in a cryptocurrency, is maintained across several computers that are linked in a peer-to-peer network. These are typically also decentralized and don’t have necessarily a central controlling authority. Although there are some blockchains that do, most are typically decentralized.
A cryptocurrency is a digital currency or token in which transactions are verified and records are maintained by a decentralized system using cryptography rather than by using a centralized authority, and cryptocurrencies typically power blockchains. If I think about the the Ethereum blockchain as an example of a blockchain, Ether, or Eth, is the currency that is used to power transactions that occur on that blockchain.
When a lot of people think about cryptocurrencies, they think about things that are stores of value or allow you to transact and enable financial interactions. The cryptocurrency space is actually really broad; I would say the blockchain space is quite broad as well. What we’ve seen is a field called token engineering, where people are coming up with novel uses for tokens or other forms of these digital currencies, some of which can be used for things like voting and governance, which is part of what we’ll touch on here today.
Another really important concept to understand is a smart contract. If you think about something like the difference between Bitcoin and Ethereum, Ethereum is really interesting, because in the context of this database, the same way that you could think of this ledger, the same way that on the Bitcoin blockchain, transactions are essentially committed to this distributed ledger. In the context of Ethereum, those blocks are programmable, and they’re programmable through something called a smart contract.
A smart contract, again, is actually a relatively simple contract. It’s a self-enforceable digital representation of a traditional contract. Again, this is something that Ethereum popularized, it’s at scale. A smart contract is really the foundation of most of the projects that are being built on the Ethereum blockchain. From a very simplified perspective, we can think about this from the lens of two parties that want to engage in a transaction or have a purchaser and a buyer, for example.
In this case, Bob wants to sell a house and John wants to buy a house. You would basically have this mediated by technology, by a smart contract, where the smart contract receives these assets in the form of a deed. The smart contract then distributes the assets, and there’ll be an automation of the clearing and settlement. Basically, you can have a condition met, and then the smart contract will basically act once that condition has been met.
The third thing that we’re going to touch on is, what is a DAO? DAOs, you can think of as really one of the most complex forms of a smart contract. These are decentralized autonomous organizations where the bylaws of this organization are basically codified or embedded into the code of a smart contract.
DAOs are really interesting. We have things like companies, foundations, and organizations, which have been organizational structures that have been in development for some time. DAOs are really quite a new organizational type where instead of having a typical top-down hierarchy, or management, or something like that, you have a network of decentralized, almost open-source contributors all working towards a similar goal, where the bylaws of that organization, again, are mediated by a smart contract.
These typically use a token to interact in governance. In the same way that some blockchains have currency attached to them, DAOs, in many cases, have what are called governance tokens that allow members to vote on what decisions should be passed or made and to vote on proposals that are made in the context of the DAO. These are like companies, but they’re fully decentralized. They’re a really good way to bring together a community with a common goal and with some level of democratization to it.
With all of that, let’s think about what is the single most impactful thing that a DAO could do today with certain resources? As this tweet says, what is the single most impactful thing that a DAO could do with a million dollars today? From this perspective, our opinion was that the most impactful thing that a DAO could do would be to fund longevity research.
In the past few months, we worked together with a large community to bring an organization called VitaDAO to life. We had a DAO as a decentralized collective that’s funding early-stage longevity research. Its core mission is really to extend human lifespan and healthspan by researching, financing, and commercializing longevity therapeutics in an open, accessible and democratic manner.
What’s unique about VitaDAO from a value perspective is that VitaDAO and its members are really committed to nurturing and developing intellectual property licenses and data sets that result from the projects that it supports. What this really means is that VitaDAO goes out and tries to identify researchers that are working on interesting, promising, early-stage longevity projects, typically those that are quite therapeutically focused. In exchange for funding, it typically owns part or all of the intellectual property that originates out of those projects.
The community that collectively owns VitaDAO works together with the community itself, other organizations engaging in partnerships, to try to nurture that intellectual property, bring it to life, get therapeutics to patients in a way that is consistent with its ethos, ethics and values. What’s really interesting is that, again, this is not the will or the mercy of a single individual or of upper management.
It’s quite different from a VC. It’s quite different from a foundation. It’s really nothing more than a collection of hundreds of individuals that have an interest in longevity working together with resources to actually fund and develop longevity therapeutics.
Just to explain how this works from an ecosystem perspective, people join the DAO by contributing funding. That funding then goes into the treasury of the DAO, and in exchange for that funding, these members receive Vita tokens. Those tokens are able to be used to vote on any proposals that are made to the DAO, and members can make proposals whenever they want.
For example, I could say that if a researcher applied for funding, I can make a proposal that we should give them that funding, and then other members can vote yes or no with these tokens. VitaDAO then goes and funds these laboratory projects in exchange for data and, in some cases, intellectual property. We’re using a novel framework, which I’ll describe in detail later, that actually allows the intellectual property that’s generated by these projects to be held on chain by attaching these intellectual property rights, or sublicenses, or agreements to NFTs.
Further, the DAO can then decide what they want to do with that intellectual property: it could open source it if it wants, it can make it available to anyone, it could try to sell it on to a third party, it could work with other organizations to try and develop it. The real innovation and the thing that’s important to remember is that you have this collection of individuals, basically a large community that gets to decide and collaborate on what should happen with these projects and with these assets that it’s going out and funding.
We think this is a really powerful system, because it really takes advantage of the strength of communities, which is also something that I think that LEAF and Lifespan.io have tapped into recently. One way that I like to think about it would be that if you gave the Reddit longevity community a budget and a way to govern projects that it was funding. This is, for me, quite an interesting experiment.
From an economic perspective, the goal of VitaDAO has really become self sustaining. Beyond this selling of governance tokens, which it used basically to bootstrap an initial funding event and raise money that would deploy into research projects, the goal is also for those research projects to in some way or another, over time, be able to generate revenue from the DAO that it can then continue to invest into longevity research.
Over time, through this nurturing of IP, and eventually, potentially, the licensing of intellectual property or through co-development deals, there should be the ability for the DAO to become self sustaining through this circular economy that it creates. The DAO itself can have longevity and ultimately become a prominent funding vehicle in the longevity space.
We launched VitaDAO through a fair launch mechanism, which basically means that the only tokens that were issued initially were issued directly to the community. The team that built this did not get tokens. Initially, those tokens needed to be granted and approved by the community.
The developers that worked on this did not get any tokens; we basically held what’s called a Gnosis auction, where people who are interested in funding this can could basically make bids and specify a price that they would pay for the tokens in exchange for their contribution. At the end of the auction, the same price is determined by an algorithm for everyone, and the initial community was formed.
Before the auction actually happened, we were building a large community, just around the vision and the mission through Discord, which if you’re not familiar with, is, in my opinion, a much superior version of Slack that’s fully open. I can, for example, create a community on Discord. You can view it, you can pop into it, you can become a member.
By the time we actually held the auction for Vita tokens, there was already quite a bit of interest and quite a lot of people that want to participate. We raised approximately $7 million to fund longevity research, and there were about 635 people who participated in the auction, so a fairly large community of people.
The demographics of that community are really interesting. Initially, a lot of the focus was trying to onboard PhDs, postdocs, MD PhDs that were working in the longevity space, thought leaders as well. Instead of focusing on building a large crypto community that was interested in longevity research, it really started fundamentally by building a large community of researchers and enthusiasts in the longevity space.
Over time, that began to also attract mission- and vision-aligned people from the crypto space who have a core interest in longevity and of which there are many, as you’ll see in a bit. This combination of crypto and longevity, this is maybe a curious thing for some people, but a lot of the key opinion leaders in the crypto space are really quite progressive in their views about how we can advance humanity.
Balaji, for example, said that longevity has the potential to be to traditional medicine what crypto is through traditional finance. It changes the terms of the debate. There’s a sense that both are really going against the status quo. They’re trying to create a paradigm shift: crypto in terms of how we deal with finance, longevity in terms of how we approach medicine, being more preventative and more focused on on health as opposed to treatment.
Because of that, there’s a lot of alignment in the space. Both have been dismissed by the incumbents due to their high-risk nature, but the thinking is how do we align the most forward thinking economically with the most forward thinking scientifically in order to create the largest impact.
What we’ve seen is, especially over the past couple of years, crypto tends to go in cycles. You have periods like the crypto winter, where I think people in this space are just building, and then you have these sort of these bull cycles, where there’s a lot of interest, a lot of liquidity comes into the space. For the people who have been, for example, in the Ethereum ecosystem for a long time and have accumulated significant wealth, a lot of these individuals are looking for something meaningful to do with their wealth.
Tey want to do something that makes a difference. That doesn’t just mean doing yield farming or the next trend in decentralized finance. In many cases, it means how do we take this liquidity and put it to use in the real world to do something meaningful?
What is unique about VitaDAO, and why is this relevant? VitaDAO will own the intellectual property assets resulting from the projects that it supports. It really is this decentralized longevity collective that can, over time, become quite a prominent player in the space.
Members can contribute work or funding in order to join VitaDAO. Beyond just contributing money to purchase the token, you could also come into VitaDAO as a scientist or as a domain expert in a number of different areas and start giving your time in exchange for DAO membership and tokens. This is a really, really powerful thing, because it’s an incentive that can motivate a lot of people to come together and start working on this.
VitaDAO will provide funding in the range of anywhere from 50k, typically to 500k, but up to a million in some cases; again, this is at the at the discretion of the community and how valuable the project is seen to be. The focus is on early-stage, high-risk, high-reward longevity projects. Trying to work on the things that maybe other organizations see as as being too risky, with funding decisions made hopefully very quickly in comparison to traditional organizations as well.
Again, this is quite different from a VC or a foundation in that it’s a community that anyone can join and that is attracting a large group of academic researchers by this global incentive scheme. From a structural perspective, there’s a couple different tiers of parties that interact with VitaDAO. You have members which are basically just holders of the Vita token: these are people that either participate in auctions or join the DAO by contributing work and therefore are now members.
You have the working groups, which are basically a series of groups that have been set up within the DAO to serve the community, and serve members, basically advise them. This is across a range of different topics. We have the technical working group, which are tasked with the development tasks, things like maintenance of the smart contracts, upgrading the technical features of DAO, improving the UI and UX that people interact with when they’re making proposals.
The governance working group is tasked with all of the daily governance decisions for for the DAO, everything from what can be handled by a soft governance and community consensus, what needs to go for a token-based vote, the creation of proposals, how quorum requirements are set and voting requirements set. A tokenomics working group, which works on the incentives. Awareness, which does everything from education to any marketing activities. General operations.
The most interesting is really the longevity working group. That is a working group that consists of domain experts from the longevity space. At the moment, it’s about maybe 30 to 35 people, all of whom work on finding projects, assessing them, doing due diligence, and then making recommendations to the community on what projects might be interesting for VitaDAO to fund. These are really fun and interesting things to be a part of; if anyone does have any interests, you can actually join the community quite easily and have an interview with your group and see if it’s something you would like to participate in.
We’ve attracted a really diverse community of researchers and physicians with very different expertise and backgrounds and a longevity space, who now constitute the core of these working groups. Then there’s the service providers, which are typically companies or real-world entities that the DAO engages for particular services. These could be anything from contract research worked to legal to technical advising on architecture. Molecule, one of my startup companies is one of the service providers to VitaDAO, for example, it’s been building the technical architecture that actually allows the DAO to hold intellectual property on chain.
This brings me to an important question, which is, how does a DAO actually hold IP? I think a lot of people have heard of the NFT space or NFTs. NFTs stand for non-fungible tokens. A bitcoin for example, it’s fungible, it’s divisible. Non-fungible tokens are not divisible and therefore, they can be used to represent unique assets that can be moved on chain.
Where we’ve seen a huge explosion in NFTs is really in the art space; you’ve probably heard about the Beeple sale, for example, that sold for $69 million at Christie’s. Things like crypto punks, some of which have sold for $7 million.
I think a lot of people who aren’t deep in the space probably are thinking things like, this is crazy. There’s like a JPEG selling for millions of dollars. NFTs go quite deep; what an NFT represents is ownership of a unique asset. One of the challenges with DAOs is trying to determine how a decentralized vehicle has jurisdiction; how does that actually hold intellectual property?
One of the things that Molecule has been working on is this IP NFT framework that actually uses NFTs to allow intellectual property licenses, patents, data sets to actually be held on chain. By attaching early-stage biopharma assets, like an R&D license for a small molecule, to an NFT, we can make those natively digital, discoverable, tradable, and fundable, and this really allows IP to enter Web 3. It can be held by DAO, can be tokenized, it could have a liquid market created around it, collateralized, borrowed against. Interestingly, every time this NFT, which in some cases is holding data, or a patent, is accessed, a record of this access can be transparently viewed; the history and the ownership is known and stored on chain.
Interestingly, you could program funding events into it. Every time somebody trades this NFT on or sells a license, a certain percent, for example, can go to the creator. This enables a new fundraising mechanism for early-stage research. This is a technical framework that combines things like federated data storage with access control.
For example, the owner of the NFT is the only one that could actually access data even for pre-patent IP. It’s a new free legal framework that utilizes sublicensing agreements to enable on chain entities to hold intellectual property. This is really exciting. This is, as far as I know, the first instance of real world biopharma IP actually being held by a decentralized autonomous organization. We’re really excited to be working on what I see as innovation in funding, governance, and legal.
Quickly, for those who are interested in this technical details, what is an IP NFT? How does it work? Basically, it contains a few different elements.
The first is a legal contract in which you have the identities of a couple of parties, their wallet addresses, the terms of a particular license, for example, or the details of a patent. You have a smart contract that has wallet addresses, signatures, and a hash to a metadata JSON. That metadata JSON that the smart contract references has information about the contract, for example, this legal contract, the therapeutic, the type of NFT and the industry that’s serving, and then also the actual encrypted IP patent or data set.
These cross reference each other. This is Ethereum, this is stored on a decentralized storage solution called Arweave, and together, this constitutes the actual IP NFT, which basically enables the DAO to hold, from a technology perspective within a smart contract, real-world intellectual property rights.
How can you get involved? Again, the exciting thing about DAOs is that these are open communities. VitaDAO is at a point now where it has quite a bit of funding, and its goal over the next couple of of years will be to deploy that capital into longevity projects that the community thinks is really interesting. You can join the community by joining Discord. It’s really easy to download, it’s easy to create an account, and the community is fully open.
Even if you don’t join the DAO, you can be a fly on the wall, you can see what’s happening, what people are talking about. The working groups are transparent, so you can see what’s going on on a day-to-day basis. If you’re interested in if you’re an expert, you can actually join the working groups, share your expertise, and you’ll be compensated for your help. We’re looking to grow the community, so it’s always great to have new people.
If you’re a researcher, you can apply for funding on our website. We’re, again, funding projects looking for anywhere between 50k to 500k in funding, but in some special cases, up to a million dollars. If you’re particularly ambitious, I would also suggest the builders to go out and create your own DAOs.
We have approached the funding problem in longevity through the lens of tackling the intellectual property component and bringing a decentralized community to get around that. You could create DAOs that are philanthropic purely. You could create DAOs that have a completely different incentive mechanism. You could create a DAO just to focus on rejuvenation biotechnologies; the design space is wide open, and there’s a lot of different things you can do to innovate in this space.
With that, I think I’ll talk quickly about a few ongoing challenges before wrapping up. DAOs come with a lot of challenges as well. I would say in terms of the things that have been quite successful, it’s things like attracting a large community, aligning people through incentives, quickly getting a lot of open-source contributors working on a single task or a number of tasks.
Lacking formalized leadership, or formalized managerial or hierarchical structures also comes with its own set of challenges and a very different way of working. In many cases, you have many part-time contributors and very few full-time contributors, organizationally, it can be quite challenging to know what to do when. These are all massive learning experiences for us.
I’m hoping in a year or two, we’ll be able to say quite confidently DAOs are very good at this, they’re not so good at that, and create design changes to be able to compensate for those things that DAOs are not so good at. For us, it’s things like simplifying our onboarding process and finding a very specific task for someone to work on quickly, creating a really strong culture and improving cultural practices, ideally by learning it at other DAOs.
One that I would want to give a shout out to is the Token Engineering Commons. It has an amazing culture that I’ve been totally blown away by. Creating this sense of family or community is really important.
Integrating our experiences in the Lean Startup into DAO practices. How can we be quicker, more agile with this large community of decentralized contributors? Bridging the worlds of crypto and biotech, which you can imagine comes with a number of challenges.
We hope that crypto continues to gain legitimacy. This is a vehicle for helping crypto gain legitimacy and building reputation in the longevity space that moves beyond crypto. These are things that I think we’ve made really good progress with so far but we’re excited to continue with.
With that, I’ll close my talk. Again, thank you so much for listening. If you have any interest in learning more, you could feel free to reach out to me directly or join the community on Discord. I’ll be chatting to some of you virtually online during the conference. Feel free to ask any questions; I’ll be happy to speak with you. Thanks so much.