🌍 Making Sense of Web3 for Climate #6
Your 5-minute deep-dive into the web3 for climate intersection
Happy Monday founders, investors, and generally passionate humans.
Here’s your weekly news and snapshot from this burgeoning intersection:
Ecosystem Snapshot 🚀
🧱 Circularise — a startup profiled in one of our earlier newsletters — received funding from the E.U.’s innovation institute to trace the carbon footprint of imported rare-earth minerals.
💽 dClimate partnered with the University of Namibia to create a blockchain-based system that tracks the country’s emissions and green hydrogen production.
🌕 Nature’s Vault raised a seed round (undisclosed amount) to launch a token that pays to stop gold mining.
N.B. If Aera Force meets this startup in the future, I may include a larger deep-dive into their model. Reading their website, it is initially unclear how they ensure these offsets will last for multiple decades.
🏘️ Wanxiang Blockchain launched “Cube,” a monitoring system for the carbon footprint of smart buildings
N.B. They say the tamper-proof and traceable nature of the blockchain data will improve government policy and corporate efforts to decarbonize Chinese buildings.
♻️ Pólen, a South American startup that issues tokens for meeting recycling standards and raised an (undisclosed) seed round in December, announced that it had grown its revenue and team “300% YOY” since 2019.
🔆 AmazonasCoin, a carbon-backed token ($230M market cap) that rewards climate action projects, distributed >$70,000 of solar panels to a remote community in Brazil.
Events
None in particular next week — let me know if you notice any particularly good ones!
Article Summaries 🎓
Why are public goods often discussed in web3? by Alex Filotimo (8-minute read)
For web3 founders and investors, there have been increasingly regular discussions about web3’s ability to create, fund, and manage public goods more effectively.
We all learn in high school that street lamps and clean air are public goods but, specifically, public goods are both “non-rivalrous” and “non-excludable.” In some ways, fully decentralized currencies or Ethereum applications (which cannot be “shut down”) are now public goods.
Why do web3 folks care about public goods? In general, public goods — ranging from local playgrounds to certain areas of science — are underfunded because everyone benefits without needing to pay for its creation. Web3 (particularly distributed ownership and crowd coordination) allows for new ways to fund and manage them.
What does this mean for climate investors?
New funding methods mean that it’s suddenly attractive for entrepreneurs to create public goods (they could receive rewards for the initial creation, even if the public captures all its future value).
Supporting exceptional founders at early stages could offer profitable investment opportunities and facilitate the creation of giant, impactful public goods. These may involve companies in areas like:
Open source global climate data
New networks that improve climate coordination
Or ways of managing resources like fisheries or nature reserves.
At least, this is a fascinating topic to follow on Twitter. Gitcoin DAO’s community has funded dozens of new public goods using web3-enabled quadratic funding (what is quadratic funding? [video]).
Blockchain can help us beat climate change. Here's how | World Economic Forum (8-minute read)
Given the web3 ecosystem’s recent focus on carbon markets, here is an article from Chainlink Labs and the World Economic Forum discussing alternative blockchain-for-climate applications:
Incentivizing climate-friendly behavior
i.e., NetObjex offers hotels IoT devices to keep track of a guest’s water and energy consumption. Through oracles (data → blockchain), smart contracts calculate and reward guests for their usage.”
Rewarding farmers for improved practices
i.e., Nori, who recently raised $7M, or Cornell University’s Green World Campaign that automatically pays farmers when data from satellites show improved soil practices and tree cover
Decentralized energy grids
i.e., the Brooklyn Microgrid Project uses smart contracts to give consumers the ability to produce and trade solar electricity with their neighbors.
Additionally, some well-established companies like Powerledger or Energy Web and various distributed energy startups are emerging.
Hedging risk (blockchain insurance could automatically pay claims to farmers — including in developing countries)
i.e., “insurance projects like Arbol and Etherisc offer smart contract-powered crop insurance to farmers across the world. Using smart contracts, farmers can take out a policy on their small crop of land, set predefined conditions for contract execution (such as a certain amount of rainfall), and then rely on oracles to monitor weather patterns. If the oracle network reports a certain metric has been met, the farmer automatically gets a payout.”
The article states that most of these applications only became possible recently because they could not previously interact with real-world data previously. “... in recent years, 'oracles' – entities that connect real-world data with blockchains have become market-ready. As more and more environmental data sets – such as weather patterns or internet of things sensor readings – are fed onto blockchains, developers are beginning to produce a wide range of environmentally-conscious smart contract applications.”
Are you interested in purchasing crypto for the first time, what #ReFi is, or any specific web3 topics? (2-minute response)
Respond to this email. I’d love to include your questions in future newsletters — whether you’re a climate investor, an experienced blockchain engineer interested in climate change, or an Aera Force community member.
As I adapt these newsletters for you and this ecosystem over the coming months, feel free to hit reply with your feedback.
With love,
Alex Filotimo
Building web3 investment systems for a flourishing future
P.S. know a specific web climate company Aera Force should meet? Here’s our quick referral form.
This newsletter is for educational purposes only.