Welcome investors and founders,
🗞️ We are officially moving this newsletter to fortnightly Thursday (ET) format.
Below is your global ecosystem news and curated content to help you make sense of how web3 will drive impact at scale. 🔆📚
This edition also examines a consumer startup that could succeed where hundreds have failed. Why? Leveraging NFTs and a metaverse could create a viral product. And most importantly, their approach might avoid the inadvertent greenwashing of most consumer startups. How? Find out below.
Global Ecosystem News 🌊
Fundraises
None this week
Ecosystem News
🇨🇳 China Mobile launched an innovation laboratory and this white paper to support the blockchain-based data networks and carbon trading that “could provide critical infrastructure” for China’s net-zero plans (written in Mandarin).
🌲 Nemus, a Brazilian company with sustainable farms in the Amazon, sold NFTs to fund purchasing 2 million hectares of Amazon land.
(Writer’s note: It’s unclear whether this funding allows them to protect the land or simply enables the founder to purchase farmland under the guise of conservation.)
📈 Toucan Protocol, an Ethereum-based web3 carbon credit leader, announced that they would bridge their registry so it can operate on Celo’s mobile-first blockchain.
🌋 Regen Network, a “community governed ecological ledger” famous for its early web3 carbon credits, announced that 13,786 wallets hold their token at the protocol’s first anniversary.
Cheekily, the founder pointed out that it took two years for Bitcoin to grow past the 10,000 wallet mark.
Newly Launched Projects 🚀
🪨 Thallo is launching a carbon credit exchange to sell web3-based offsets to traditional businesses (Thallo will source its offsets from other projects like Regen Network and Open Forest Protocol).
Events
👩💻 ReFi DAO is hosting The Planet Positive NFT Hackathon on April 23rd.
Curated Articles 📚
You can think about blockchains as cities: this 6-minute article helps you consider alternatives to Ethereum through a new mental model. He compares each layer-one blockchain’s scaling strategy to cities’ policies to manage increasing populations. The article is hilarious, lucid, and concludes with his future predictions (including that no single blockchain will dominate web3; application-specific chains will remain niche, and digital infrastructure to bridge applications between blockchains will become as significant as the transport industry.
The IPCC report: things are urgent, action is still far too slow, but we have solutions to deploy immediately. Amidst warnings and projections, the IPCC’s most recent report shows hope. We could reduce billions of tons of CO2 while saving money now if we push the transition to some of the below technologies. The blue bars represent money-saving cost reductions, while the orange bars only require a $20-$50 carbon price to reach cost-parity.
Crypto’s efficiencies also help the oil and gas industry: PermianChain has built a product to increase funding and efficiency for oil exploration. Partly because of ESG-induced hesitancy to fund oil and gas projects, PermianChain tokenizes projects to allow crowdsourced financing and simplifies existing lending paperwork. PermianChain is further building a compelling business (if we ignore the societal cost of carbon) by offering stranded mines easy access to crypto-mining equipment.
Extra: Project Deep Dive 🪂
Occasionally, we will include an extra section to share industry investment insights or analyze longer-form articles and promising web3 projects. Today, we examine Cool Points Club’s web3 approach and the consumer action industry.
Cool Points Club — a new generation of consumer-climate subscriptions
Consumer “offsets” market history
Over the last thirty years of climate action, entrepreneurs have built hundreds of individual action and monthly offset businesses. Currently, Project Wren, Joro, and Patch are some traditional tech leaders. Web3 analogs to them have emerged via Moss and Nori (both of which had recent fundraises featured in this newsletter). Most, however, have failed — and none have yet reached the globally significant scale (with millions of consumers) they promised early on.
Reasons for the failures range from low trust in the offsets provided, the arguments that “carbon footprints” (a concept designed by oil giants) distract consumers away from meaningful climate action, and simply the startups’ failure to find messaging that resonates with a broad audience. Additionally, if the startups reach scale, there is not enough high-quality supply (a problem the web3 projects Regen Network and Open Forest Protocol are working to address).
What does Cool Points Club (CPC) offer?
CPC has two initial products. 1, Cool Gram is a simple $5 monthly subscription for individuals to remove carbon via their social media accounts (CoolGram.Club). 2, NFT rewards in their Islands of Cool metaverse. Using Ethereum-based smart contracts, they generate NFTs that fund a Digital Carbon Sponge™. Every purchase removes real-world carbon at mint and perpetually as the asset is resold (www.islandsofcool.club).
CPC is also launching the Cool Minter to allow other brands — via partnerships with the likes of Shopify Merchants — to leverage their Digital Carbon Sponge™ rewards.
Greenwashing and authentic climate impact
Cool Points Club has the same initial promise: “millions of people want to take climate action, but they don’t have a clear first step. We provide that.”
However, unlike many consumer subscription approaches, they have two differences to help them avoid inadvertent greenwashing:
1 - They ensure that their consumer messaging is not about carbon footprints.
Climate entrepreneurs often misunderstand the potential detriments of focusing consumers on their carbon footprints. Carbon footprints are attractive intuitively. However, over the last decade, psychologists have shown that footprints can distract people from the wide-scale economy-scale change needed, make consumers feel they’ve done enough, and shift the attention off industry decarbonization. Climate academics often exhaustedly tell individual offset startups that there’s a reason fossil fuel companies popularized the term.)
2 - They focus on carbon removals — with a portfolio of removal projects averaging around $400 per ton.
In doing so, they’re doing more than offering a token flow of consumer capital to offsets. They’re sparking cost reductions for the critical carbon removal industry by providing regular high-price demand. (Stripe Climate describes the importance of steady carbon removal demand here).
How CPC interfaces with web3:
Traditional offset companies offer consumers badges as rewards. Cool Points Club also offers these rewards for climate-friendly behavior. However, the NFT rewards’ ability to trade as products could independently attract users for its monetary value and uses in the metaverse.
Fashion brands might offer NFT clothes for consumers in other metaverses, which link back to CPC’s carbon-negative smart contracts.
Outside of rewards, CPC plans to purchase traceable carbon removal credits from web3-based exchanges (i.e., Regen Network or Senken).
Bottom-line
Using web3 rewards, Cool Points Club may finally build a consumer tool that can scale to millions of users. Additionally, like other responsible offset platforms (Project Wren being a classic example), CPC communicates that they offer “one small way to help” instead of presenting net-zero carbon footprints as a climate solution. As a result, climate academics could endorse their approach.
To subscribe or learn more: Cool Point Club’s methodology page has excellent details on their thinking. The founders speak on a podcast here. And, you could reach out to their co-founders on the about page.
If you have questions about the terms above (i.e., what is #ReFi), feedback, or article suggestions, we’ll happily reply to any direct emails.
With love,
Alex Filotimo and Aera Force’s contributors
Researching how web3 can drive impact for our 🌍
P.S. Whether you’re an experienced climate VC or a young artist, you’re welcome to contribute with your research, scouting, or capital to web3-climate investments in the Aera Force DAO.
This newsletter is for educational purposes only. While we strive for accurate and unbiased information, none of it is verified or intended to help as investment advice.