The co-founders of the decentralized science startup Ideosphere have shared their ambitious plan to redirect the speculative energy prevalent in crypto prediction markets towards financing early-stage scientific research.
Speaking at the Blockchain for Good Awards event in Copenhagen, Ideosphere co-founder and head of technology, Rei Jarram, highlighted that certain scientific research projects are deemed too risky for traditional investment channels. This observation, coupled with the significant volume of money flowing into crypto gambling platforms, prompted the founders to consider how to "kind of siphon some of that speculation away from gambling toward early-stage research."
Jarram identified prediction markets as an ideal mechanism for this endeavor, noting that "gamblers have a high risk appetite and early stage research and development is pretty risky."
She further explained that while talent and innovation are abundant, funding remains a significant bottleneck because traditional avenues perceive such projects as excessively risky. "The money is there," Jarram stated, "but if they can’t get the money, it’s probably because of an incentive issue," an issue Ideosphere aims to address.
“If you can kind of create prediction markets around early stage research, you can make those markets marketplace of ideas that will actually bring the money in. […] Researchers can put forward hypotheses that are working on traders can speculate on it, and the spread goes to the researcher.”
The project is currently in its nascent stages, with only front-end mockups available. Despite this, Ideosphere has already received a grant of 10,000 USDt (USDT) from the Blockchain for Good Alliance during the event.
Addressing Complexity in Decentralized Science
Like many decentralized science (DeSci) projects, Ideosphere's model presents complexities that are not immediately apparent. Without robust safeguards, a system relying on prediction markets could be susceptible to corruption and errors, potentially leading to the erroneous closure of markets.
Researchers may inadvertently make mistakes or arrive at incorrect conclusions. In a prediction market that resolves based on their findings, there could be an incentive to close the market in an unexpected manner or to engage in insider trading. The Ideosphere co-founders are developing countermeasures to mitigate these potential issues.
Rei explained that the platform is designed to incorporate a dispute system, potentially utilizing the UMA Protocol. In this system, if a user initiates a dispute and is proven correct, they would receive a financial reward, while incorrect disputants would incur a financial loss. This mechanism is intended to foster a form of crowdfunded peer review, a critical component of the scientific process where experts in a field evaluate research.
Decentralized Vetting and Market Mechanisms
To be eligible for funding, researchers will be required to secure a deposit and undergo a vetting process that includes user voting. They will also need to provide projections regarding the commercial viability of potential practical applications and estimated time-to-market for their research.
In addition to prediction markets, Ideosphere plans to introduce "discovery markets." Rei elaborated that the purpose of these markets will be to sift through potential research projects to "identify the most high-impact, feasible projects that could be funded with […] the smallest amount of funding."
She also mentioned that research projects will have access to crowdfunding on the platform, alongside funding derived from prediction market trading spreads. Rei added that "you need a lot of volume to generate substantial funding," and this avenue alone might be insufficient, which is why the platform aims to offer additional funding sources.