Owning Your DNA: A Web3 Approach to the Genetic Data Industry

By Sheldon Dearr, Technical Lead at Octopus Network, and Pandu Sastrowardoyo, CEO of DeBio

The modern economy is driven by data. In the same way fossil fuels and material resources powered the industrial revolution, data powers the digital revolution. Effectively capturing, analyzing, and leveraging data is the prime objective of every industry and every sector of the modern economy.

While the data economy has created unprecedented innovation and growth, the drive for data has also resulted in substantial misuse and exploitation. Although the primary narrative about data misuse centers on the misdeeds and greed of Silicon Valley’s largest companies, data exploitation has permeated every economic sector touched by the digital revolution. Biotech companies - and the healthcare industry more broadly - are just as emblematic of chronic data mismanagement as their Big Tech counterparts. 

No data or information is as foundational to humanity as our genetic data. Our genes inform our appearance, disposition, and - critically - our long term physical health. The innovations made in recent decades in the field of genetics have allowed scientists to uncover insights and develop processes ranging from identifying indicators of neurological diseases to tracing family lineage. All resulting in an improved understanding of both humanity’s genetic history and the factors shaping the health characteristics of our entire species.

Rightfully, the healthcare industry has placed substantial focus on extracting and processing information from DNA for the purpose of informing innovation and exploration across the entire spectrum of biological research. However, while the innovation driving the $12 billion genetic testing industry may be virtuous, the economics underpinning it have been structured for the benefit of corporations, and to the detriment of individuals. To understand the scale of this exploitation, it helps to understand genetic analysis.

Genetic analysis requires a DNA donor. While other types of medical material transfers such as blood or organ donations are structured in a way to compensate - or at least mitigate the cost to - the source individual, individuals typically pay for the extraction and analysis of their inherent genetic characteristics. Then, once the data is analyzed and processed, the genetic analysis companies can sell the insights to other biotech firms. The genetic industry is a rare case where companies charge fees to both the end consumers of the product and those who provide the inputs. 

Inherent in the concept of a free market is the idea that individuals are able to receive compensation for their property and the value it generates. However, the genetic industry runs completely counter to this narrative. Healthcare companies have a monetization structure that enables companies like 23andMe to receive eye-watering profits and market capitalizations from societies’ genetic material.

The unbalanced monetization system is only half of the story. Data sovereignty presents just as large an issue. Because of DNA’s unique identity characteristics, control of one’s DNA provides the holder with access to an unparalleled amount of personal information. The holders of DNA have immense responsibility to manage this data in a manner that protects the rights and privacy of the individual. Thus far, genetic data companies have failed to be responsible data stewards. Some companies have been accused of transferring data to governments and law enforcement agencies with proven records of abuse. While many have since reformed their practices, it is still dangerous to concentrate so much data in a singular location. As cyber threats from both state and non-state actors become increasingly sophisticated, the likelihood of a major data breach at a genetic processing company increases.

Under the current system, we - as individuals - are paying companies for the right to profit off of our own biological identity, while severely compromising the security of intrinsic biological data. Surely, there is a better way.

Thankfully, there is a singular solution to both the monetization and security problems posed by the status quo of the genetic industry model. Blockchain, the same tool transforming both the internet and finance, presents an opportunity for a better genetics industry. The Web3 model for data management is based on data encryption, decentralized ownership structures, and democratic governance models. Blockchain technology can serve as a basis for a truly democratized data marketplace with sovereign ownership rights and monetization structures.

So how would this look in practice? A network of individual labs, responsive to people and not beholden to corporations, would be able to test genetic samples on behalf of a patient and deliver the results to an encrypted wallet. Then, the owner of the wallet would - through the use of a private key - be able to grant access credentials to health insurance firms, biotech companies, governments, or any other entity the individual believes is deserving of their genetic information. Because control of the data and platform would be in the hands of individuals, people would be remunerated fairly and openly for sharing their genetic information.

How do we make these economics sustainable and scalable? It’s unlikely that companies would be willing to spend resources seeking information on a single patient. By pooling data based on user preferences for data controls, economies of scale can be effectively queried, yielding cost effective access to key data and individuals with just compensation.

These automated processes would benefit from decentralized computer systems, like a series of pre-programmed smart contracts. Rather than relying on an individual or entity, smart contracts can efficiently and transparently manage data and monetization. Additionally, automation increases user trust with lower operating costs.

Collectively blockchain technology, utilized in accordance with the guiding principles of data sovereignty, privacy, and fair market transactions, can be practically used to build a fairer data market, while providing genetic information - the foundational data of our species - the respect it deserves. Restoring public trust while building equitable value distribution models is difficult for businesses to do today, but Web3 applications are opening doors, enabling ownership and value transfer models fit for purpose in the digital age.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.