Healthcare Incentives Have Gone Wrong. Can Crypto, DAOs, NFTs Fix Them

Going to the doctor’s office today does not always bring the word “care” to mind. Visits are often rushed, with endless phone calls and effort to access information online bookending an already de-personalized process. Transferring information across healthcare providers is a herculean task, one that is only really matched by the effort required to get the necessary referrals from one doctor for another.

For Paul Kohlhaas and Vincent Weisser at Molecule, these are all just symptoms of a broader problem: the extent to which profit has become an overly — if not the — deciding factor in medicine. With a high-level goal to cure diseases, they’re most interested in the question of how to fix a broken market, starting with addressing a lack of data liquidity. Ahead of speaking at next week’s SynBioBeta conference, they shared a few key insights about their big-picture thinking.

“Our thesis is that the best way to fix these problems is to involve patients as a platform to drive and fund research. So we think of Molecule as a Kickstarter-type marketplace for translational work for these communities,” explains Weisser, Chief Ecosystem Development Officer. In other words, to fix problems in the doctor’s office, Molecule wants to put patients in the driver’s seat in terms of the very data that enables them to be treated at all.

Molecule is not just a “version” of Kickstarter for biology. More definitively, it is a conglomerate of Decentralized Autonomous Organizations (more commonly referred to as DAOs) that is built around a cryptocurrency protocol that decentralizes funding and intellectual property ownership. By using this protocol and its instruments — specifically, IP-NFTs or intellectual property non-fungible tokens — to tokenize sponsored research agreements, Molecule aims to make these aspects of the research process more transferrable and liquid. “Both data and data science talent are illiquid, and this is a technological problem,” Weisser claims. “How do we find knowledge without giving up the ‘proprietary stuff’? By bringing data rooms from the paper age to the digital age is one part of this.” Instead of more centralized information sharing agreements, these IP-NFTs are designed to encourage participation and collaboration in a much larger environment with more liquidity baked in, without having to actually patent innovations along the way.

Kohlhaas, as Co-Founder and CEO of Molecule, cites his background in economics and interest in systems thinking and design as foundational to his understanding of problems stemming from centralizing authorities in terms of funding, replication, competition, and communication. “Incentives for medicines to be brought to market are not to cure but to treat people and build sustainable business models around medicine,” he argues. “So in response to that, we can attach IP rights to a research agreement with an NFT as a digital bearer of that asset so it’s easier to transact with IP, rather than needing to use an equity vehicle. Given how the system works, this is a mechanism for quicker funding and more valuable scientific assets to be easily transacted.”

This focus on intellectual property and funding is the bedrock for a variety of flourishing communities, aligned around specific incentives while coming from diverse backgrounds, to spin the flywheel of translation of intellectual property generation, for further funding to drive continued research. This platform approach aims to bring together patients, researchers, and investors alike to be able to own and govern IP through these tokens — taking back control from the disempowered doctor’s office visit.

Part of this exercise in governance includes being able to prioritize what kinds of research should be pursued, and one such overlooked area for Molecule is longevity research. “Treating aging is like a vaccine. It’s important to be open to new paradigms for treating diseases, and crypto-based communities are one step ahead of the medical establishment in being able to see where things could be going,” argues Weisser. “We might end up with cheaper drugs if you treat the root cause of disease as opposed to the fragmented diseases that you might get otherwise — for example, a lot of different cancers.”

Concretely within Molecule, this focus on longevity has taken the form of VitaDAO. Its membership includes people who contribute either funding or time in the form of work; in return, they receive governance tokens that allow for voting on proposed research projects, for example. Membership based on contributed work is one of the ways in which this “Bio DAO” differs from other investment DAOs, and the infrastructure is designed to prioritize people as patients over more traditional shareholders or other forms of stakeholders.

“Users have to participate in a trustless system,” says Kohlhaas. “This kind of work lowers the risks of systemic failure and fatal error by focusing on shared values and self-governance through token economics.” For Weisser and Kohlhaas alike, some of these changes to how humans interact with human health only herald future benefits from the larger Decentralized Science (or DeSci) movement. “Overall, what we’re trying to do is study what’s wrong with science funding and figure out how to fix it,” Weisser emphasizes. “It’s too bureaucratic, slow, and centralized, so we need to make it as quick, digital, easy, and non-bureaucratic as possible. Instead of having things owned centrally by one government body, it’s by a community that cares and wants to get things to market.”

Within the world of Molecule, the space for multiple communities to thrive is already taking form with various research DAOs. Using an accelerator-like set of best principles to build more efficiently in web3, bio.xyz has worked with Molecule to help with the launch of Bio DAOs around synthetic biology, hair loss, psychedelics, women’s health, and more. “This is not just a moral problem, it’s an economic problem,” Kohlhaas stresses. “I want to live in a Star Trek world. How do we get there? How do we get to abundance?” Molecule is certainly pointing the way towards that kind of future, one atom of community at a time.

Thank you to Aishani Aatresh for additional research and reporting on this article. I’m the founder of SynBioBeta and some of the companies I write about, including Molecule, are sponsors of the SynBioBeta conference and weekly digest.