🌍 Web3 for Climate #9
Your deep dive into regenerative web3 startups w/ the Aera Force DAO
Happy Wednesday, investors, founders, and curious researchers,
We might start sharing these ecosystem insights fortnightly. If you prefer the curated readings or global fundraising section on a weekly cadence, let me know! 📩
Here’s your regular coverage of our burgeoning ecosystem:
Global Ecosystem News 🚀
🍋 Lemonade, a publicly listed insurtech unicorn, partnered with Chainlink and Avalanche to launch a DAO supporting African farmers with severe weather insurance.
⛓️ Chainlink launched an accelerator to help early web3 projects orient themselves for long-term relevance.
🌱 Kayrros, a climate analytics startup partnering with the French government, raised $44m in funding from investors, including French Tech Souveraineté, the European Investment Bank (EIB), and NewSpace Capital.
(Writer’s note: while not a web3 startup directly, their technology could soon integrate with web3-based weather or emission-data “oracles.”)
🌊 Diatom, a DAO focused on reducing plastic ocean waste, disbanded after a community vote to return investor funds.
🚢 SAP and Unilever successfully piloted blockchain technology to support deforestation-free palm oil.
🌴 Korea’s Forestry Service partnered with the Dunamu metaverse to plant two trees for every digital tree planted, attracting 20,339 people to their metaverse.
🌐 Deloitte acquired OCT Emissions Solutions to strengthen its “end-to-end data offering” for corporate decarbonization.
🔋 Umicore, a $10B battery materials corporation, partnered with the Re|Source initiative to create a transparent blockchain-based cobalt supply chain.
☁️ Context Labs partnered with Williams (NYSE: WMB), a Fortune 500 energy company, to track their natural gas emissions using blockchain.
🌏 Singapore’s MetaVerse Green Exchange and China’s Greenland Financial partnered to allow cross-border carbon credit trading.
🌱 Climate X, a climate risk analytics provider, raised a $5.4m Seed round from investors, including Voyagers Climate Tech Fund, Blue Impact Ventures, and Deloitte LLP.
(Writer’s note: this web2 startup is well-positioned to integrate with web3 companies or insurance providers like Lemonade)
Curated Insights 📚
1 - A semi-failed project: Diatom DAO’s vote to disband (6-minute read)
One month ago, Diatom announced their $1.95M raise and announced expert advisors like Fabien Cousteau in their quest to reduce ocean plastic pollution. However, after struggling to meet early expectations, the Diatom team released a proposal to change their working cadence and incorporate KYC (know your customer) forms for long-term legal compliance. The community decided (87.08%) to vote against the changes and refund their investments. So, the DAO sent back the remaining capital and disbanded.
This vote highlights the power of aligned DAO stakeholders, the speed of change in web3, and some challenges for open-sourced founders when building strong communities:
2 - How a New Digital Dollar Could Shake the US Financial System | WIRED (10-minute read)
The article covers Biden’s recent executive order for federal agencies to share their concerns regarding a United States Central Bank Digital Currency (CBDC) and develop strategies for interfacing with the blockchain industry. This article discusses privacy and censorship concerns, that 100 countries are already “exploring or piloting” CBDCs, and that the White House is focused on proof of stake (low energy) blockchain approaches. The US wants to play a leading role in this industry to “avoid systemic risk” and capitalize upon opportunities like “improved climate financing”.
What is a CBDC? This video explains it better than the article. Any US CBDC would effectively play the role of digital cash. Instead of online payments as debits or credits, the currency you hold is a direct liability of the central bank.
3 - Will today’s booming carbon market be able to avoid a bust? | Catalyst Podcast (54-minute listen)
Climate VC Shayle Kann and Bloomberg New Energy Finance’s Nat Bullard hosted this wide-ranging conversation covering the history of carbon credit markets, as well as their predictions, hopes, and concerns for emerging startups.
Interesting notes from the discussion:
Most startups focus on the voluntary market, which recently reached $1B however we forget the $851B compliance market currently operates efficiently (encouraging behavior change without double counting or trust issues).
They wanted every investor to know the “huge difference between $5-$25 offsets and >$100 long-term offsets.”
Shayle wants to see a cap on the voluntary market’s emissions to “create a more efficient market where every corporation has to directly decide between reducing their emissions and purchasing carbon removals”).
Bloomberg’s researchers recently predicted that the voluntary market could become “widely oversupplied and pretty much useless” if carbon credits like avoided forestry emissions proliferate.
They both agreed the industry is exciting, with lots of promise for startups — including new financial vehicles and specialized funds or ETFs. However, they offered a provocative warning: “Is tech solving carbon markets’ problems, or are carbon markets solving tech’s problems?”
(Writer’s note: as we’ve discussed in prior newsletters, many emerging entrepreneurs seek areas to apply web3 rather than problems to solve. For founders and investment groups amidst this wild west, we must ensure that web3 is a tool to solve a problem rather than a solution seeking an application.)
Want to read more on web3 carbon markets?
Climate Tech VC published this industry deep-dive into voluntary markets in February.
As always, if you have questions about any terms above or article suggestions, please drop me a line.
Studying web3 venture investments for a flourishing future
P.S. Whether you’re an experienced climate VC or a young artist, you’re welcome to drive investments for our planet (with your research, scouting, or capital) in the Aera Force DAO.
This newsletter is for educational purposes only. The figures quoted may not be accurate, and you should not use this content as investment advice.