ARK • Disrupt

Advances in genomics are revolutionizing our understanding of neuropsychiatric and neurodegenerative disorders. As part of the PsychENCODE Consortium's efforts, technological discoveries spearheaded by companies like Pacific Biosciences (PACB) and 10x Genomics (TXG) are proving crucial to deciphering the complex genetic and molecular mechanisms underlying conditions like autism spectrum disorder (ASD), schizophrenia, and bipolar disorder.

PacBio’s long-read deep sequencing technology has enabled¹ researchers to surface more than 214,500 transcript isoforms, shedding light on their regulation and their impact not only on brain development but also on genetic risks for neuropsychiatric disorders. They have discovered that dysregulation of specific isoforms could be correlated with those disorders, an insight that could lead to novel therapeutic targets.

10x Genomics’ techniques have enabled scientists to profile gene expression and regulatory patterns at the single-cell level. Studies utilizing single-nucleus RNA-seq and ATAC-seq have mapped² gene expression in various brain cell types, revealing the vulnerabilities and transcriptional changes associated with disorders like schizophrenia and autism. Such granular data could help identify cell types impacted by disease-associated genes and variants, paving the way for precision medicine.

Collectively, PsychENCODE’s breakthroughs are delineating the genetic architecture of neuronal disorders and driving the development of targeted diagnostics and therapeutics. By linking genetic variants to specific cell types and understanding their regulatory mechanisms, these technologies are laying the groundwork for more personalized and effective treatments for neuropsychiatric conditions.

Moore’s Law suggests that a steady doubling of transistor density should occur every 18 months to two years, while Wright’s Law suggests that even mature technologies can continue to scale as cost declines reaccelerate.

For years, analysts have concluded that Moore’s Law is wrong or dead. And yet, thanks to AI, computing seems to have entered a supercycle.

During the past ten years, battery technology set an important precedent for this concept. After decades of cost declines, lithium-ion battery prices flattened until, against all expectations, Elon Musk harnessed consumer electronic batteries to produce electric vehicles (EVs) at scale. One long range electric vehicle incorporated more battery storage than thousands of smartphones, suggesting that even slow adoption of EVs could be enough to create a cumulative doubling of battery demand and activate the cost declines associated with Wright’s Law.³

As for semiconductors, perhaps transistors are not the right metric to track progress. As shown in the chart below, the combined decline in hardware and software costs could lower overall compute costs more rapidly than Moore’s Law would suggest.

*TFS-Days is a measure of compute required to train a model. Wright’s Law states that for every cumulative doubling of units produced, cost will fall by a constant percentage. Sources: ARK Investment Management LLC, 2024. This ARK analysis is based on a range of data sources as of Jan. 9, 2024, which are available upon request. Forecasts are inherently limited and cannot be relied upon. For informational purposes only and should not be considered investment advice or a recommendation to buy, sell, or hold any particular security. Past performance is not indicative of future results.

Last week, Amazon announced⁴ that the FAA approved its plans to fly drones beyond line of sight, a regulatory victory that, according to our research, could lower the price of drone delivery at scale to less than $1.⁵ According to Amazon, the FAA approval will allow it to expand its operations in College Station, Texas. This news follows Amazon’s decision in April to shutter⁶ its operations in California.

ARK’s research estimates⁷ that the market for last mile drone and robot delivery could transform the American shopping experience and generate ~$450 billion in delivery revenue in 2030.

At the tail end of the ICO (Initial Coin Offering) bubble⁸ in 2018, Telegram launched⁹ the Telegram Open Network (TON) blockchain, selling its native token, TON, to raise¹⁰ $1.7 billion USD. In October 2019, the U.S. Securities and Exchange Commission (SEC) deemed¹¹ the sale illegal and sued the company. In response, Telegram severed its relationship with the blockchain project. Nonetheless, popular with its users, the project continued as a community-led initiative called The Open Network.

Broader based interest in TON resurfaced in September 2023 when Telegram and TON jointly announced¹² their first self-custody wallet. Soon after, Pavel Durov, Telegram’s CEO, committed¹³ to integrating TON with the Telegram messaging app and offered ~30 million TON tokens in incentives for users, developers, and teams to build on TON. Pavel also announced that Telegram would share 50% of its ad revenue, paid in TON through its native blockchain, with content creators.

On April 19, 2024, Tether announced¹⁴ the native issuance of USDT on TON, creating a surge in total value locked (TVL) and user transactions, as shown below.

Source: Token Terminal as of June 2, 2024. Search Term: “Active (daily) Users.” https://tokenterminal.com/terminal/projects/the-open-network. DeFillama as of June 2, 2024. Search Term “Total Value Locked.” https://defillama.com/chain/TON. For informational purposes only and should not be considered investment advice or a recommendation to buy, sell, or hold any particular security or cryptocurrency. Past performance is not indicative of future results.

With its mobile-first approach, a large crypto-native user base, and direct distribution to more than 900 million users, Telegram could add substantial value to the crypto space. Despite TON’s nascency, Pantera Capital and other investors see tremendous potential in this DeFi ecosystem partnership. TON could benefit from meaningful network effects on Telegram as well as the scalability provided by its sharded blockchain design.

Are the pieces falling into place for a financialized, crypto-native super app, à la WeChat?