TL;DR
- IP Tokens enable communities to fund research onchain, with successful commercialization creating revenue that flows back to early supporters
- DeSci projects have multiple tools to reward IP Token holders – like royalty tokens from licensing deals, token-to-equity paths, preferential access to funding rounds, and spinoff compound NFTs
- This creates a sustainable economic flywheel where each successful product incentivizes more community funding for the next scientific breakthrough, making decentralized science economically viable at scale
How DeSci projects can reward token holders
IP (intellectual property) Tokens offer an open, permissionless, decentralized way to fund scientific research onchain – and then what?
Onchain research strives to create marketable products. Commercialization leads to revenue, which creates opportunities for projects to return value to token holders who originally funded the project, encouraging further research.
As CerebrumDAO, pump.science's 73+ compounds, and Bio Protocol's AI-generated hypotheses progress toward commercialization, each success story demonstrates that supporting early-stage research can generate real returns.
This is the DeSci value flywheel – complete economic cycles where scientific breakthroughs fuel the next generation of discoveries, with value flowing back to those who believed from the beginning.
The DeSci value distribution toolkit
DeSci projects have a variety of unique mechanisms they can choose from to drive value for token holders.
Royalty tokens allow projects to tokenize revenue streams from licensing agreements. When a project licenses its IP for development, the project can tokenize those royalty streams into royalty tokens – digital representations of contractual rights to revenue percentages. These tokens can be airdropped to IPT holders who are members of the project or offered at preferential rates to them, sharing partnership income.
Token-to-equity pathways allow IPT holders to lock their tokens, complete an identity verification (“Know Your Customer” or “KYC”) process, and request to participate in the actual equity in a project's corporate entity in exchange for their governance work. Once token holders complete this process, they become shareholders with full economic rights, creating a spectrum of participation – casual holders can stay liquid with tokens, while committed contributors can become company shareholders.
Rights offerings for future funding rounds offer IPT holders another potential value mechanism. When projects raise funds from outside investors like venture capitalists, qualified token holders can get preferential access to purchase equity alongside VCs. This is a great opportunity for individual investors who made early commitments to the project to participate with institutional investors that may join the project later.
Spinoff compound NFTs offer early investors the opportunity to participate in secondary projects. When one line of research produces alternative applications, these derivative research projects can be tokenized as separate NFTs and offered first to qualified IPT holders. So, similar to how Bored Ape NFT holders were once given the first opportunity to mint Mutant Ape NFTs, early investors in a promising Alzheimer's research might also gain early access to invest in a spin-off brain health supplement.
The Sustainable DeSci Economy
These mechanisms – including royalty tokens, equity, rights offerings, and spinoff NFTs – create a comprehensive DeSci value distribution toolkit. Token-based value distribution from product sales completes the loop in DeSci economics: research funded by communities, developed into products, generating revenue that returns to supporters through multiple pathways. It's a model making decentralized science economically sustainable, where every successful product strengthens the incentive to fund the next breakthrough.
This is the DeSci value flywheel, and it’s accelerating.
