Is Web3 Tech Actually Improving Carbon Markets? | Web3Carbon Week #37
Discover more from Kuoka's Carbon Flippening
Is Web3 Tech Actually Improving Carbon Markets? | Web3Carbon Week #37
Friends,
+ According to a study, web3carbon has become “competitive” with legacy markets.
+ Flowcarbon discusses its next steps
+ 4 new projects in the kuoka repository,
+ more web3carbon news.
Is Web3 Tech Improving Carbon Markets?
A scientific paper suggests that the first projects have reached the level of being fully competitive with legacy markets, and even surpass certain capabilities of current centralized systems: The paper “Blockchain solutions for carbon markets are nearing maturity” was accepted for the July edition of One Earth Journal. The authors assessed the technology readiness level of 39 organizations developing blockchain solutions for carbon trading. 🐣 Toucan / 🍧 KlimaDAO came out on top in the “fully competitive” bracket. The paper also admits that the market is currently immature as most of the 39 solutions are at or before proof of concept.
Apart from the technology assessment results, the paper also published a handy diagram (see figure below) to better grasp web3’s opportunity in improving carbon markets. The main improvements that web3-based systems offer over traditional systems is (1.) they enable parties to trade in the absence of trust without a third-party intermediary (i.e. brokers). (2.) They are able to create immutable, transparent and public proof of retirements, and (3.) monitor, verify and report in (MRV) in a supposedly more transparent way.
After reading the paper that was celebrated by large parts of the ReFi community, I also need to address some shortcomings of this study: The sample of projects seems rather arbitrary. At least 12 out of the analyzed 39 projects are already inactive. On the other hand, many relatively active and important projects were left out of the sample (e.g. 👩🌾 Regen.network, 🌳 Moss, 🌲 Open Forest Protocol, 🚰 Flowcarbon,…). It cannot be avoided to be mentioned that three of the four authors are employed by Shell Global Solutions. Large global fossil fuel companies are not well known for beeing trustworthy sources for climate-related science. Though the authors make their affiliation very transparent, and claim that the study was commissioned, conducted, written, and submitted independently by the authors.
In-depth Flowcarbon Update
In May, two-way bridge🚰 Flowcarbon has raised a massive amount of $70M of capital from investors like a16z. On top of that, they raised even more capital from GNT token pre-sale. Since May, the ReFi world has not heard many relevant updates from Flowcarbon. Now Dana Gibber (CEO) and and Phil Fogel (Chief Blockchain Officer) sat down with John and Simar. In a 46 min episode with ReFi Podcast they went deep into the details what has been happening recently.
Jump directly to the most interesting parts:
Flowcarbon’s Centrifuge pool (20:10): The pool that directly invests in credits in the Corazón Verde Del Chaco Project has been launched and is already oversubscribed. It raised 865’000 DAI.
Two-way bridge and the GNT token launch (30:40): No (relevant) updates here. Flowcarbon is waiting for the registries (Goldstandard, Verra) to move forward in their respective tokenization efforts. Also Dana and Phil seemed to somehow not wanting to share a clear roadmap to the question when the token/bridge will be launched.
Future perspective for tokenized carbon (39:36): Towards the end, Phil presents a short and very concise vision on how Flowcarbon’s tokenized carbon can help to raise and deploy more financing to carbon removal projects in a more efficient way than today: By leveraging tools like mezzanine financing, carbon annuities, receiving interest payments in carbon credits, interoperability between carbon protocols, and many more interesting ideas. Some interesting ideas there.
Other Web3Carbon Project Updates
Kuoka.earth tracks the progress of the 100 most promising Web3Carbon projects. Here are some more updates from the last week:
🚜 Nori (Soil Carbon Sequestration) partners with Bayer’s ForGround Platform. ForGround is a digital platform that helps farmers to transition to regenerative farming. Connecting Bayer’s existing network of regenerative farms with Nori’s carbon removal marketplace increase the land area reachable with Nori’s marketplace by 1000%.
👩💻 Thallo (Carbon Credit Exchange):
In a blogpost, Thallo lays out its reasoning why they go multi-chain, but deploy on Polygon first, before Celo and XRP.
Verilog published a code audit for the Thallo two-way carbon bridge: No highly problematic issues were found, one mid- and some lower-prio issues where documented.
🌎 Solid.World DAO partners with 😐 Neutral Protocol (Derivatives for Tokenized Carbon) to add a set of new financing use cases for carbon project developers.
👩 Ecosapiens (Carbon-backed NFT Project) released Whitepaper v2 to explain its own vision for carbon-backed PFPs.
🐣 Toucan (Carbon Bridge) compiles a “Grand Unified Database” of all carbon attributes from existing ReFi projects. This will help to sync up carbon asset data mappings between different tokenization projects.
🥦 RefiDAO (ReFi Community) 156 ReFi founders were selected for ReFiDAO season two of Founder’s Circles
🍏 CO2.Storage (Storage for Environmental Assets) Filecoingreen announced CO2.Storage, a web3 data storage solution for carbon offsets.
Weekend Reads
Time Magazine: Why It's So Hard to Put a Price on Carbon: Time Magazine published a piece about the difficulties of putting a price on carbon. It lays out many of the challenges the voluntary but also the compliance market faces, such as quality issues, or permanence. Aside from giving an overview over many global carbon initiatives, also two web3carbon projects, 🌿 Earthbanc (Vertically Integrated Platform) and 🍧 KlimaDAO (Carbon Reserve Currency), are discussed.
Newly Added Projects to the Kuoka Repository:
💨 AirCarbon (Carbon Trading Exchange)
🍏 CO2.Storage (Storage for Environmental Assets)
🌏 Ceven (Environmental Governance Platform)
🍄 The AEternals (Carbon Backed NFT Project)