The letter B stands for blockchain, biodiversity, biomes, and biology: a few of the main ingredients in Swiss startup SimplexDNA’s proposed global biodiversity monitoring system.
What started out as a traditional eDNA services company -– spun off from the university, ETH Zürich -– has led to proposing a monitoring system that, to the startup’s knowledge, is the first in the world to use blockchain and be based in the planet’s waning diversity of animal and plant life.
The goal, as the startup’s recently published white paper reads, is to finally properly invest in biodiversity, which human survival is dependent on.
All organisms leave traces of themselves in an environment, and what SimplexDNA does is collect that genetic information, extracting DNA from particles and cells floating in water, whether it be a boreal forest’s pond, a tropical coral reef, or the coast of a vast Arctic lake. While SimplexDNA uses water sampling for its current services, eDNA can take samples from soil, ice cores, and even sewage.
eDNA is at the heart of the startup's system, but it's only one chamber. In the other beats one simple cryptocurrency: the Franklin. The blood running through it is the digital database, better known as blockchain. And the body, or rather the entire system, is what the startup calls the Proof of Life protocol.
“Each Franklin accounts for a particular location at a particular point in time, but for that location at that point in time, it includes all the life forms that have been detected at that moment,” SimplexDNA’s advising data scientist Luis Wyss explained.
According to Wyss who has a background in computational biology and the startup’s cofounder Elvira Mächler who has a P.h.D. in ecology and evolution, eDNA is useful for scientists conducting biodiversity research and companies looking to monitor their impact on nature.
SimplexDNA's method uses a syringe to filter the sample. After sequencing and processing, the technology spits out streams of biological alphabet soup: AAATTCGA, TTTCCCAA, GAGCTATC, revealing a hidden ecosystem of fish, frogs, foxes, fungi, plants, and the invisible microscopic world of phytoplankton all from just drops of water. In fact, a single eDNA sample collects most, if not all, of the thousands of species present at just one location.
In 1950 — 58 years before virtual currency was invented and over 30 years before the term biological diversity ever appeared in a publication — very little was known about the basics of DNA. The iconic double-helix structure that is infamous today was unbeknownst to much of the public or even the scientific community. That changed in 1952 when a chemist named Rosalind Franklin captured the first photograph of DNA’s structure, suggesting the double helix.
Known as Photo 51, this picture and her subsequent research on the DNA’s helical molecule would be integral to James Watson and Francis Crick discovering the structure of DNA strands two years later, ultimately shaping modern molecular biology and genetics.
In 1958, Franklin’s cutting-edge research on the DNA and RNA structure of viruses was cut short by her untimely death from cancer. However, in 2023 her legacy lives on as an eponym for SimplexDNA's virtual biodiversity token: the Franklin.
Since Rosalind Franklin’s time, leaps and bounds have been made in our understanding of DNA. While Franklin was concerned with grasping DNA from a human perspective, that same double helix has revealed so much about the creatures, ecosystems, and entire wildlife world beyond us in the short 24 years since the first eDNA study was conducted.
According to the team at SimplexDNA, eDNA can provide the scale needed to globally monitor biodiversity, whereas conventional methods like acoustics, remote sensing, and drones are costly, labor-intensive, terrestrial, and biased toward visible species you can see or hear.
The startup believes eDNA can supplement these methods, because as they write in their paper, “a full-stack of monitoring technologies is imperative for saving life on Earth.”
Due to a lack of global monitoring and investment, estimates on how much life there is on Earth vary widely, but many scientists agree the world is undergoing the Sixth Mass Extinction, whether we are losing 24 species a day as the Millennium Ecosystem Assessment estimates or 150 as the U.N. Convention on Biological Diversity concludes.
However, by combining eDNA with blockchain technology, SimplexDNA thinks it can tackle a number of unsolved problems in combating the biodiversity crisis.
The first problem is that biodiversity is drastically understudied. 93% of the Earth has never been surveyed. 80% of observations come from 10 countries with 37% of data from the US, leaving the tropics, the world’s most biodiverse regions, without the data needed to properly conduct conservation.
Each Franklin is minted with data from a specific location at a specific time. The data is put into a database for public use and as more tokens accumulate, the open-access database tracks relevant changes over time, measuring things like species richness. Aside from being useful for scientists, institutions, communities, and governments, Mächler says it moves biodiversity monitoring “from places where the money is to places where the biodiversity data needs to be collected.”
As shown in a 2021 paper published in the journal Ecography, the math is simple: the higher the national GDP, the better the sampling coverage. That’s why poorer countries, which also happen to be extremely biodiverse, occupy the least space in global biodiversity knowledge.
“This is the one thing we are trying to solve,” she told FootPrint Coalition, “The idea that you can have somebody paying for a sample taken somewhere else, and getting an investment on that would be very novel, and that's where I see blockchain as the tool to go [with] because there is trustability behind it.”
Going hand-in-hand with bolstering data, the team at SimplexDNA believes the Proof of Life protocol is also the perfect financial instrument for effectively investing in biodiversity monitoring and data needed for nature’s protection.
By purchasing Franklins, buyers pay for the costs of wider eDNA sampling, so that some of the trillions of dollars governing bodies and private investors are investing in climate change mitigation can go toward persevering natural assets in tropical and poorer regions that contribute multitudes to the global economy.
Biodiversity is moving to the top of mind for investors, and for good reason too: half of the global GDP is reliant on it. But for many investors, as well as companies dependent on natural resources, the biodiversity crisis remains a blind spot.
Over the next 10 years, the World Economic Forum (WEF) identifies biodiversity loss and ecosystem collapse as the fourth most pressing risk to the global economy, right behind #3 natural disasters and extreme weather events; #2, failure to adapt to climate change; and #1, failure to mitigate climate change. In fact, all of the risks revolve around natural resource shortages which the WEF says will happen by 2030 in their newest report.
Aside from the need to protect nature for nature’s sake, the economics of the problem is why the United Nations called for a monitoring and accounting system for biodiversity at the 15th Conference of the Parties on Biodiversity, or COP15. It’s why there is a renewed interest in conservation startups. And its why investors are channeling investment in biodiversity.
On top of that, as SimplexDNA puts it “banks are waking up to the importance of other species” besides humans, “and the risk of its change to their assets.”
The Dutch Central Bank, for example, estimates that biodiversity loss is a risk to 36% of its assets. The abundance of species has declined by nearly 70% over the last decade and if that isn’t enough to spark change from financial institutions, understanding nature as the world’s most valuable economic asset could.
As the startup points out in their white paper, philanthropies including Jeff Bezos’s Earth Fund, the Children’s Investment Fund, and the Walton, Ford, Bloomberg, and Packard foundations, have pledged to push billions of dollars a year into biodiversity.
But, one problem stands in the way: there is currently no reliable, scalable, and standardized method of monitoring, accounting for, and investing in nature. According to SimplexDNA, that method could be the Proof of Life protocol. “If we get to the point where we have enough samples,” Mächler said, “I think it opens up a new sector.”
With ushering in a new financial ecosystem, SimplexDNA also hopes their method, or even a method like it, can bring new jobs to poorer and tropical regions, which need the most monitoring, and thus need samplers. Wyss says they’re thinking of implementing it through an app where people can sign up to join the global monitoring system.
“It would work like a gig economy,” Wyss told FPC. “Someone who signs up accepts orders that come in, does the collection, sends the sample, and receives payment, either through cryptocurrency, which is, of course, for us the simplest to implement, or in any other case, some sort of fiat off-ramp,” he said referring to services that exchange fiat currencies like dollars, euros, and yen, for crypto.
“So there isn't the goal of creating a company where people across the globe are doing full-term jobs, but the idea is more to create some opportunities for technical entrepreneurship in remote areas or for project operators or regenerators that are already working with the forest or with the nature in this area to get this extra income from taking samples for us.”
In addition to the potential to create jobs and bolster biodiversity research, Wyss and Mächler also see the eDNA and blockchain combination as their main defense against the greenwashing carbon credits and carbon offsetting attempts have endured.
“There are other tokenized carbon credits out there, which still suffer from some issues, but the real advantage of the Franklin is that the measurements we make are independently verifiable,” Wyss said, “The data is public and on the blockchain. So it is impossible to lie about the progress you're making.”
Wyss and Mächler emphasize that the Franklin is not a biocredit, and while the UN thinks biodiversity credits can evade greenwashing, other experts warn against them.
“An important clarification and something that is often overlooked is that the Franklin is not a biodiversity credit or a biodiversity offset in the same way a carbon credit is a carbon offset,” Wyss said. Instead, the Franklin is simply a tokenized version of data.
However, Mächler notes that there are still important complexities that may make this type of accounting harder than carbon credits, despite their faults.
“What probably makes it easier with carbon credits is that there is this one unit that is accounted for,” she said. That unit is CO2. “But with biodiversity it's complex,” she goes on, “not even science has a read on what will be the number that we need for biodiversity. Is it species richness? Should we account for how abundant things are?” she asks, listing possible ways to account for improvements in biodiversity. “So in that sense, I think it makes it harder.”
That’s why the team ultimately decided to mint each Franklin with the locational point-in-time data.
“It [the data] doesn't say anything about the, whether it's good or bad because an increase of species richness is not always a good sign, depending on where we collect it. Like, is it invasive species that move in? Or is it [the change in species richness] due to climate change? So that's a question that has been always on our minds.”
Mächler and SimplexDNA’s other initial team members weren’t always sure if blockchain and biodiversity tokens were the way to go.
Mächler says, Kristy Deiner, who is another cofounder came up with the connection to blockchain early on, seeing it as a useful tool for financing. Most of the team at the time didn’t see how it could work and they established what Mächler calls a classical business model that has been running since their founding year in 2021, mostly providing payable eDNA services to governments and researchers.
Others leading in the eDNA services space include Naturemetrics which is launching an online platform for its data and Illumina which, is also steering its efforts toward medicine.
The usage of blockchain separates SimplexDNA.
In 2021, as Deiner and the startup’s board member, Jonathan Ledgard, began to develop the vision further and upon education and a lot of discussions, Mächler says she and the rest of the team finally saw the vision. “We realized, okay, there is a way forward.”
Upon building out the blockchain components, they brought Wyss on board who was the first employee.
“We started from a very vague idea of this token that is biodiversity related and has a positive impact into something that is maybe not implemented, maybe not widely used, but at least solid and sound in itself, with a clear plan on how things should go forward,” Wyss said. “So I think there's a lot of clarification in terms of concept that we can be proud of.”
This proof of concept is only the first draft, and Mächler says there could be multiple versions as they try to make the concept as good as possible.
For the blockchain, they are using a platform called Celo, which according to the company is carbon-negative and EVM-compatible blockchain. Ethereum Virtual Machine ,or EMV, is a common platform, and the compatibility makes it easier to build upon in Web3, Wyss says, referring to the blockchain-based web.
“But the interesting part behind the Celo blockchain is not necessarily just technology, but mostly the community that is behind it. Celo is really positioning itself to be the number one layer for the entire regenerative finance movement,” he said. According to Wyss at the Celo Climate Collective, there are a lot of projects similar to theirs in terms of climate change mitigation and social impact, but they mostly relate to carbon.
“To my knowledge, we are the first and only, or at least one of the first projects in Celo that is focusing exclusively on biodiversity.”
Considering the downfalls of carbon credits and wariness concerning biodiversity credits (though the Franklin is not a credit or offset) there are ethical concerns SimplexDNA is considering.
“With tokenization you always need to be very careful from an ethical perspective, because you can go wrong quite quite quickly,” Wyss said.
Given the conversations around biodiversity finance instruments and the services ecosystems and organisms provide such as whale, elephant, tree, and ocean carbon capture, there has been talk about “paying” nature for these services through conservation funding. However, that opens up a can of worms (or whales) with questions concerning the ownership of natural resources.
“I think it's a really an important question,” Wyss said, that would fall in the purview of a government regulatory body. For one, the open access system would have to blur the location of endangered and sensitive species for example, because of illegal hunters with ulterior motives, Wyss said.
“But I think there is a more general ethical problem that needs to be discussed in nature tokenization because the entire idea of the entire field is to account for all these services that are provided for us by nature, which are currently not accounted for, which we all consume for free, and which therefore are not valued,” he said. “So the idea behind all these tokenization projects is to change that.”
Aside from natural carbon sequestration, which is necessary to regulate the Earth’s temperature, nature provides “ecosystem services” like food, water, and even disease management.
“But the problem is if you change it in the wrong way,” Wyss said. “If tokenization suddenly means now you own a particular forest that provides you with carbon sequestration, oxygen, and clean air, and you think the thought to the end, this means that the person that owns this now can charge you to breathe.”
With a laugh, Wyss emphasized that it’s an “absurd thought,” but it’s something that needs to be considered in order to avoid it.
“I think that SimplexDNA really has found a nice way around it because we’re not actually monetizing or giving ownership over a particular species or biodiversity area to the token-holders. We just give them some rights on the data. And the data that we're generating is permitting a lot of regeneration projects to measure and quantify the positive impact that they're having and to generate revenue from people. For example, companies buying offsets in the future get revenue for their restoration efforts,” he explained.
Mächler adds that the hope is that samplers participating in the gig economy also receive a return on investment in addition to wages earned. Currently, the startup has a few implementation partners they work with which already have a network of people who are distributed all over the world, giving them an easy source to tap into for market research.
In terms of future implementation for a general global biodiversity monitoring and financing system, Wyss and Mächler are interested to see where talks go given the urgency of the issue and interest discussed at COP15. However, they are not the most optimistic given the lackluster outcomes of UN biodiversity conferences in the past.
“Like many of the ones [COPs] that have happened before, the crux is in the implementation,” Wyss said. “It will really depend to which extent countries actually stick to implementing what they promised. We provide these independent Web3 approaches, but it is clear that Web3 isn't gonna solve this problem by itself, and that there needs to be a very, very strong regulatory framework to make it happen. So it's hard for me to say that I’m more or less positive after COP15, but I would still say it remains to be seen.”
To that extent. Mächler agrees.
“I'm a really terrible person in that sense because I'm always very pessimistic about any of these outcomes,” she admits, “But nevertheless, I feel like it will get more urgent than ever, and there must be something happening whether it's going to be what we propose, or whether there's gonna be a very different schedule.”
“It's clear that the world realizes we need to financially accord our account for biodiversity,” she said, adding that the feedback they get is that eDNA and blockchain are “a lot of new technologies meshed together.”
“Criticism is right for some of these techniques, and I think it will be shown in the future, whether we actually can convince there is a way forward to make this trustful or not,” she said referring to their technique. “But I, of course, hope for the former.”