Do science, earn crypto: Coinbase CEO’s other startup sees record price rally

When the world was enthralled by the alien mummy hoax out of Mexico City a few months back, ResearchHub co-founder Patrick Joyce — alongside other ResearchHub insiders — quickly put up a total of 42,500 ResearchCoins (RSC) for anyone who would run tests on purported DNA samples of the “bodies.”

The crypto bounties, together worth $660 at the time but $7,400 today thanks to a recent 1,000% pump, were available days before local doctors ran lab tests on the supposed specimens. 

Those tests didn’t really say much. Just that the skeleton was complete and hadn’t been assembled by piecing together multiple remains.

On ResearchHub, however, someone found the DNA samples were “highly contaminated.” 

”Basically, these said ‘mummies’ have been exposed to so much environmental contamination, that finding actual genes belonging to these ‘aliens’ would be a tough ask,” the researcher said. 

The analysis didn’t exactly prove the mummies weren’t aliens, just that it may be impossible to tell at all. They were paid 8,000 RSC for those findings, worth $140 back then but now more than $1,100.

All this can solve science’s problem with gatekeepers, says ResearchHub, a startup co-founded by Brian Armstrong in 2020. The Coinbase CEO — who also serves as ResearchHub’s chief executive — has been selling off 2% of his Coinbase stake to fund ResearchHub alongside other initiatives, such as life extension unit NewLimit.

Scientific progress, as it stands, is nudged along by researchers who share their findings in papers, passing them onto scientific journals for review and, hopefully, publication. 

Those scientific journals are known to be incredibly profitable, mostly because they receive papers for free (and can even be paid to publish articles) while subscriptions can cost thousands of dollars per year. The process is slow, and in some cases, discriminatory and exploitative. 

ResearchHub wants to sidestep journals and overhaul the incentives of publishing science through an ERC-20 token and open source software sensibilities:

Pay academics crypto to review papers. Pay researchers for their work with upvotes and tips. Open crypto bounties to inspire researchers to direct their efforts on stuff that matters. Earn crypto for contributing to discussions that actually move forward science that matters.

“We think the incentives of scientific funding and publishing are broken, and that blockchain can help,” says ResearchHub.

The platform itself is pitched as a GitHub for scientists, though in presentation it’s more like Reddit. 

Users open discussions about different media. Instead of celebrity highlights from the Graham Norton Show, posts revolve around research papers, technical questions and even pop science content like the Huberman Lab podcast.

There is no equivalent to subreddits, instead topics are posted to “Hubs,” intended to be moderated sections devoted to particular topics — of which there are currently more than 62,000 — such as biology, computer science, psilocybin, entrepreneurship and geology.

ResearchHub users can earn small amounts of RSC for interactions like sharing research paper PDFs (as long as there’s no copyright) and posting comments in discussions. Users can also earn RSC by peer-reviewing scientific papers or through tips from other users.

Crypto bounties, like the alien mummy bounty, are however where ResearchHub really shines. Users post their analyses as replies in the thread. If the person who placed the bounty agrees their request has been fulfilled, they close the bounty and the website tallies the RSC to the user. The user can then withdraw those points as RSC, distributed by a ResearchHub Foundation hot wallet.

About half of the alien mummy bounties were paid out, while some commenters were in total tipped a few hundred RSC ($5 then, $56 today) for just participating in the thread.

“If you want someone to peer-review your new manuscript, place a peer review bounty on it,” ResearchHub says. “If you want a layman’s summary of a new paper you don’t understand, place a summary bounty on it. If you want help with a new method in your lab, create a question and place a RSC bounty on it.”

Users can also raise crypto to fund proposed studies via “preregistration,” which entails laying out plans to tackle specific research in a forum post before any science is done.

One post has garnered nearly 123,000 RSC ($21,600) in tips across two preregistrations to study whether playing different types of music to lettuce makes it grow faster, although significant chunks of that came directly from co-founder Joyce and other ResearchHub employees. RSC is of course up for grabs to eventually peer-review the findings.

“Activity on the platform has been increasing over time, but one of the most exciting and promising things happening on the platform is the peer reviews,” a ResearchHub Foundation core member told Blockworks. 

“We’re waiting on more data, but so far it’s really encouraging, in that we can drastically reduce the amount of time needed to make a peer review when we financially incentivize those reviews.”

Millions in ResearchCoin paid out over the years

ResearchHub itself doesn’t exist on a blockchain, DMs don’t need micropayments and it’s not censorship resistant or a prediction market (it’s a Squarespace site hosted by Amazon). Any blockchain, crypto or Web3 element here comes from the ERC-20 token alone.

ERC-20s are tailor-made cryptocurrencies (“programmable money”) issued on Ethereum. They’re minted for practically countless use-cases: Memecoins, stablecoins, capital raises, fractionalizing art ownership, KickStarter-style fundraising and even conceptual art.

In ResearchHub’s case, the platform is operated by a startup called ResearchHub, co-founded by CEO Armstrong and Joyce, a former medical student. The startup is backed by Replit CEO Amjad Masad, Y Combinator CEO Garry Tan and Vercel founder Guillermo Rauch among other tech superstars.

Pitchbook lists ResearchHub with a headquarters in Washington DC while Crunchbase says San Francisco. (ResearchHub did not return requests for comment).

ResearchCoin, on the other hand, is maintained by a separate entity, the ResearchHub Foundation, registered to the Cayman Islands, a popular choice for entities tied to DAOs.

Armstrong says ResearchCoin was actually created by the Foundation and his US-based startup decided to adopt the coin for use on its platform. He’s also promised to recuse himself from any potential discussions related to listing RSC on Coinbase.

There was no initial coin offering (ICO) for ResearchHub and the Foundation has not conducted a token sale, a core Foundation member told Blockworks. 

The first distributions went to users for their on-platform interactions, they said. RSC made its way to decentralized exchange Uniswap last year through a pool contract opened by an address tied to a Foundation core member, and those markets have determined its value. With this, the Foundation has acted as an RSC liquidity provider on Uniswap, which helps to keep spreads in check (and earns some yield).

The Foundation and its treasury are in part run by a DAO, currently with 37 members who vote on Foundation decisions. It has previously applied and won DAI grants through Gitcoin, which it has used to buy RSC to fund more research bounties on the platform.

RSC payments to users are doled out monthly through a Foundation hot wallet. On-chain data shows around 61 million RSC sent out to users and contributors over the three years of the token’s existence. 

At current prices, that’s more than $10 million in crypto paid out in the name of scientific progress, but the value of the tokens at time of distribution would be significantly lower.

Even if some of those funds ended up with ResearchHub insiders for their contributions to the platform, all that crypto represents is money that simply wouldn’t have gone to scientists and researchers if ResearchHub never existed.

The innovation of ERC-20s

Before ResearchHub, there were already a ton of platforms working to change science publishing for the better. 

Publons helps academics track and showcase their papers. Authorea supports collaboration on research papers, and functional and well-respected open repositories for preprint scientific papers already serve the scientific community well.

Even GitHub itself, after which ResearchHub says it’s modeled, hosts communities which together consume and discuss research papers. None of them have their own cryptocurrency.

There could be more fundamental concerns: A wildly successful ResearchHub would centralize scientific publishing — a field that’s already quite decentralized despite the gatekeeping journals — around the ResearchHub portal and its volatile cryptocurrency. Would that be good for science?

In any case, incentivizing scientific progress has always taken money. But dollars and euros tend to run out. The ResearchHub Foundation probably wouldn’t last long if it paid for user engagement in US dollars without a clear revenue stream or constant funding.

An ERC-20 token is really intended to fix that. ResearchHub Foundation minted 1 billion RSC which were totally worthless — until they hit Uniswap — which changed everything.

This is the key “innovation” that ERC-20 tokens provide: value generation. Once traders decided that RSC tokens were worth more than zero, ResearchHub was almost instantly bootstrapped (the startup, not the Foundation, separately raised $5 million earlier this year to continue developing the platform).

On paper, the Foundation’s treasury works out to be more than $140 million at current prices — compared to less than $12 million one month ago — money that can pay for a lot more user engagement moving forward. However, RSC markets are shallow, with CoinGecko reporting a 2% drop if about $8,000 RSC was sold at once.

The Foundation still controls more than 80% of the supply and says it will at most release 50 million RSC per year (about 6% of its current treasury). 

Whether the Foundation opened the first Uniswap liquidity pool probably doesn’t really matter, at some point a user surely would have. It’s still these kinds of tokenomics that allow crypto startups to sidestep traditional capital raises.

The ERC-20 perpetual innovation machine usually goes:

1. Create an ERC-20 token.
2. Build a platform.
3. Offer ways to earn and spend the token (giving it value).
4. Sell the token to fund growth (and pay contributors with it).
5. Embrace disruption.

ResearchHub is today somewhere between step 3 and step 4. 

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Granted, it’s Ethereum that gives ResearchCoin most of its powers. Anyone in the world can technically earn, send, receive and trade RSC through the Ethereum blockchain and Uniswap, they just need a smartphone and an internet connection. 

That’s revolutionary in and of itself, even if we’re desensitized to the whole thing by now.

Is this time different?

Blockchain tech, through an ERC-20 token and a platform known as Civil, was meant to save journalism in much the same way that ResearchHub wants to save science publishing. That is, fund good work and realign broken incentive systems once and for all (except Civil actually ran on smart contracts and even wrote immutable articles to the Ethereum blockchain).

Tokens were also meant to revolutionize dentistry, vending machines and even Iceland, but none of those proposed use cases have panned out, either.

ResearchHub and ResearchCoin are, fundamentally, token economy experiments. If they work, science would have another avenue for crowdfunding research which could impact the world in untold ways for the better.

But just like all the token economy plays that came before it, the future of ResearchHub relies heavily on whether markets for RSC rise or fall. 

At least right now, markets say they’re experiments worth conducting — for science.

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