Adam Neumann wants to put carbon credits on the blockchain.
Controversial WeWork founder Adam Neumann recently launched a startup. Called Flowcarbon, it serves as a platform for selling tokenized carbon credits on the blockchain. As a reminder, Adam Neumann is the co-founder and former CEO of WeWork, which was later the subject of the television series WeCrashed. Today, he says he wants to fight climate change through crypto.
A turn that wants to be “green”
Adam Neumann is the co-founder and former CEO of co-working service provider WeWork. As a reminder, the management of WeWork dismissed him following the failure of its IPO attempt in 2019. Recently, the ex-CEO began a “pivot to crypto to reinvent itself”. It thus joins the movement of regenerative finance (ReFi). The latter seeks to leverage blockchain technology to solve environmental problems.
This is how he created a new company, Flowcarbon. On his websitethe company argues that, in its view, the current system of buying and selling carbon credits is built on a “opaque and fractured market infrastructure”. The carbon credits themselves would therefore have “little liquidity, accessibility and price transparency”. Indeed, the market for good to pollute endorses a reputation synonymous with opacity and scams. To make it clearer, the problem would be the market for carbon credits itself, and the solution, the facilitation of trade in these carbon credits. This is how Flowcarbon hopes to make this sector more “transparent, liquid and accessible”. And this, by transforming the vouchers in the form of tokens called Goddess Nature Token (GNT).
Concretely, the Flowcarbon protocol proposes to sell carbon credits in the form of tokens to companies seeking to reduce their carbon footprint. It is then possible to exchange the credits on cryptocurrency exchanges. In short, Flowcarbon is supposed to work through the creation of a new crypto token, called Goddess Nature Token, or GNT. These tokens would represent carbon credits, and Flowcarbon users seeking to trade carbon credits would do so by buying and selling these tokens. GNT’s underlying carbon credits are pre-certified by industry groups including Verra, Gold Standard, Climate Action Reserve and American Carbon Registry. They are then sold in bundles to businesses, the news agency explains. Reuters.
Note that the basic purpose of a carbon offset is to reduce carbon dioxide emissions. Carbon offsets generate carbon credits, and the two trade in units that represent one metric ton of carbon dioxide, recalls Vox.
A revealing fundraiser
The project is backed by $70 million from the crypto division of venture capital firm a16z.
Clearly, the fundraising was done through a combination of traditional venture capital and a token sale. General Catalyst, Samsung Next, 166 2nd, Sam and Ashley Levinson, RSE Ventures, and Allegory Labs participated alongside a16z in the seed round. And Fifth Wall, Box Group, and the Celo Foundation took part in the token sale. According Reuters, of the total funds raised in this round, $32 million came from venture capital firms and $38 million from the sale of Flowcarbon’s Goddess Nature Token (GNT), the crypto token on the Celo blockchain. backed by carbon credits. This fundraising proves that investors are still ready to bet on the WeWork entrepreneur’s projects, despite a big failure.
More beneficial credit sales
According to the supporters of the project, transacting these credits on the blockchain makes it easier for those who provide these credits to raise capital. And therefore, to increase transparency for buyers. In practice, carbon credit providers pay a 2% tokenization fee to Flowcarbon to sell their credits on the blockchain. Which is lower than the cost they would have to bear by selling these credits through traditional channels. This can reach 30% of the value of the project. Credit can also be isolated from the bundle and physically delivered to a token holder if the token holder wishes to sell it outside of the blockchain.
Citing data from McKinsey, a16z predicts the market for such credits could reach $50 billion by the end of the decade.
A paradoxical environmental objective
In reality, to have a lasting and traceable impact on a company’s or individual’s carbon footprint, carbon credits must actually withdraw from the market. For example, Google removes all the carbon offsets it buys from the market. The Californian giant is thus putting an end to the exchanges so that no one else can claim their benefits for the climate.
It should be noted, however, that Flowcarbon users also have the possibility of withdrawing their tokens. And therefore, to exchange them for classic carbon credits on the blockchain or to continue to exchange them. Thus, if a Flowcarbon user decides to continue to circulate carbon by trading their carbon credits, then they cannot claim to have offset their own emissions.
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Carbon credits and CO2 emission vouchers sold on the blockchain – Geeko
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