TLDR: Regulatory Stockholm Syndrome (State Symbiosis Trap)

• Mechanism: FDA/HIPAA compliance forces centralized oversight.
• Conflict: Collaborates with surveillance state for legitimacy.
• Example: ValleyDAO research funding framework.

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The "Regulatory Stockholm Syndrome" epitomizes a critical failure mode in decentralized science (DeSci) projects that seek legitimacy through collaboration with centralized regulatory frameworks, thereby recreating the very hierarchies they aim to dismantle. This trap emerges when DeSci initiatives, despite their decentralized ethos, consciously or inadvertently design systems that require adherence to state-enforced regulations like FDA clinical trial protocols or HIPAA compliance. Such dependencies reintroduce centralized gatekeepers—institutional review boards (IRBs), regulatory agencies, and legal systems—that directly contradict cypherpunks foundational principles of trustless autonomy. For instance, projects mandating FDA approval for therapeutic research implicitly endorse a system where state-appointed validators, not decentralized consensus, determine what constitutes "valid" science. This creates a perverse symbiosis: DeSci platforms gain short-term legitimacy by appeasing regulators, but in doing so, they legitimize and reinforce the centralized authority’s role as the ultimate arbiter of scientific truth.

This dynamic fundamentally undermines the cypherpunk values of permissionless innovation and anti-authoritarianism. By structuring research pipelines around regulatory compliance, DeSci projects inadvertently validate the state’s monopoly over scientific validity, replicating the same power imbalances that decentralized technologies were designed to obsolete. ValleyDAO’s approach exemplifies this tension: their research funding framework explicitly requires projects to "comply with all applicable regulatory requirements" for clinical trials, including IRB oversight and Good Clinical Practice (GCP) guidelines, as outlined in their Research Funding FAQs. While pragmatic for drug development, this strategy entrenches reliance on institutions like the FDA, whose centralized approval processes directly conflict with DeSci’s purported goal of democratizing science. The result is a Faustian bargain: DeSci gains temporary access to traditional research ecosystems but sacrifices its capacity to create truly decentralized alternatives. By conditioning progress on regulatory appeasement, these projects not only perpetuate the state’s role as scientific gatekeeper but also risk normalizing surveillance mechanisms (e.g., KYC-mandated trials) that erode the privacy and autonomy central to cypherpunk philosophy.

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