How tokenization drives the new economy for science
Financial and reputational incentives, governance and other functions of tokens on DEIP
Token system on DEIP, a decentralized research platform, is a tool for interaction between the platform participants. What functions exactly do they perform and how do they help stimulate contribution to science on the platform? Artyom Ruseckiy, DEIP Chief Product Officer, will take you through the platform’s token model and answer these questions.
Tokens and tokenization
Tokenization is turning real-world assets into digital ones by issuing tokens that represent ownership of the asset. To a certain extent, tokenization is a new form of securitization, when a certain asset is turned into securities.
Imagine you own a $1 000 000 office building that you rent out, and you urgently need $40 000 for your business needs. Probably, you won’t be able to sell a part of the building promptly. However, what you can do is to tokenize it — to issue tokens equaling $40 000 that give their holders ownership rights for the building. It means that all token holders will be entitled to 4% of income you get from renting out — each proportionally to the amount of tokens they own.
Tokenizing an asset is fast and allows to get rid of bureaucratic friction. As most tokenization services are run on blockchain, this is also secure as ensures one’s ownership of a digital asset is immutable and can be proved.
Tokenization of research projects on the DEIP platform. What for?
Tokenization of research projects is an innovative tool for attracting financing, especially investments. Research projects don’t usually promise any direct return, so investors are naturally not motivated to invest in them. Tokenization and emission of the internal currency of the platform change the state of things.
The emission of the internal currency allows to reward the papers that were assessed to be of high scientific value.
Tokenization allows investors to buy Research tokens of these projects, thus becoming their co-owners and sharing a part of the reward they get.
Even so, research projects may still hardly promise any financial return. However, investors can now be guided by the pure scientific value of a project, as it promises them part of the income from the emission.
Apart from the Research tokens that stand for ownership of projects, there are some other types, each of them corresponds to a particular function of the platform: research group management, decentralized assessment of research papers, fundraising and reward distribution for contribution to science on the platform.
Let’s briefly have a look at each token introduced on DEIP.
Main roles — liquid currency of the platform, tokenization of new scientific knowledge
DEIP Token is the main currency of the DEIP internal economy, just like the US dollar for the US economy. It is also used to:
• reward scientists for their contribution of expertise
• finance projects published on the platform
• reward participants for the maintenance of its infrastructure.
DEIP Token is emitted after a piece of scientific knowledge created on the platform has been positively assessed. Thus, the emitted amount of this token corresponds to the amount of scientific knowledge created on the platform and tokenizes it.
When emitted, DEIP Token is distributed:
a) across disciplines
b) among 2 pools within each discipline — one to reward authors and owners of a research paper, the other one — its reviewers
c) from the pools, the token is distributed to a paper itself, and then to all people connected with the research — authors, reviewers and Research Token holders.
Main roles — measure of contribution of expertise, platform governance
Contribution of expertise is one of the major drivers of the DEIP economy. In return, participants with higher level of contribution can play a bigger role in platform governance. To reflect the level of contribution a certain member has made, we designed Expertise Tokens.
Expertise Token can not be bought or given, but only be earned by contributing to science: publishing a research paper or reviewing papers. A certain amount can be given to participants at registration, if they confirm their previous academic achievements. Each discipline has the Expertise Token of its own.
Expertise Tokens are the main tool of platform governance. It is delegated — meaning that scientists define rules and take decisions through special members who they delegate their governance power to. These members are called block producers and are elected by voting with Expertise Tokens.
How much storage space is available to a member also depends on how much Expertise Tokens this member owns. The bigger their number, the more storage capacity they can use.
Similarly to DEIP Token, Expertise Token is emitted in response to the creation of a new piece of scientific knowledge. It is distributed:
a) across disciplines
b) among two pools within each of them
c) to the paper and its authors and reviewers
Unlike DEIP Tokens, Expertise Tokens are not given to Research Token holders.
Main role — new monetization model of scientific journals
Any member of DEIP can create a scientific journal, that incorporates research papers published on the platform.
The default monetization model of journals looks like this: to publish a paper, a journal asks for a certain amount of its Research Tokens. Thus, after publishing, it becomes entitled to a part of the income a paper receives. This model naturally motivates journals to publish only reliable high-quality papers. However, this default model can be changed, a journal can set any other rules.
Scientific journals emit their own Journal Tokens that can be sold similarly to Research Tokens in order to attract additional funds. By default Journal Token holders are automatically entitled to a share of the income that a journal gets from publishing research papers.
Research Group Token
Main role — research group management
Research Group Tokens show the affiliation to a particular research group. These tokens are distributed among the group members and are used for:
• Managing the group and its research activity. Decisions related to the entire research group are taken by voting. The number of Research Group Tokens a member has defines his or her voting power.
• Distribution of reward. Once a paper published by a group receives Expertise Tokens, they are distributed among the authors proportionally to a number of Research Group Tokens each of them owns.
Main role — maintenance of infrastructure and network sustainability
DEIP Common token is shared to each new member of the platform and enables them to use all functionality for free. Technically, it is used to distribute the network throughput among DEIP participants. The amount of this token influences:
• how frequently they can conduct operations
• how much storage capacity researchers are assigned
This token can’t be transferred, but can be converted to and from the liquid DEIP Tokens.
Thus, the internal system of tokens is a tool for participants’ interaction. It also serves to provide financial and reputational incentives to encourage contribution to science as well maintain the sustainability of the network.