Aligning economic incentives and positive environmental impacts with a deflationary protocol.
WHITEPAPER
WHITEPAPER
Overview
This brief overview of the whitepaper is meant to provide information on the ecoToken, which is the utility token of the ecoSystem.
The goal of the ecoSystem is to expand and transform the environmental credit space into an open and freely traded market. The ecoSystem aims to expand the environmental credit market by acting as a launchpad for environmental projects.
The ecoSystem would provide funding to be paid back to the funders in cash or environmental credits created by the projects.
These credits minted into the ecoSystem, will create an open market in which individuals and corporations can easily and transparently offset their carbon emissions or other environmental impacts. The ecoSystem aims to extend beyond carbon credits and provide other environmental offsets such as water and habitat credits.
The Challenge
Humans have an impact on the environment; whether it’s the effects of a changing climate, polluted water or diminished habitat. Although people are conscious that their choices affect the environment, many are left wondering how they as an individual can make a viable difference.
Many individuals and corporations wish to make a positive impact but cannot find a straightforward way to do so. It is often the most popularized methods of individual carbon reduction have vast unseen consequences where much of the perceived gain is lost. Meanwhile, those causing significant environmental stresses do not have an incentive to change their habits.
The ecoSystem uses crowdfunding to pursue projects that will make a significant environmental impact and make it easy for people to help alleviate their environmental impact.
What is the Answer?
Carbon Credits or Carbon Offset Programs are a step in the right direction. They attempt to quantify the environmental costs attached to the actions we take as we live our lives. They then provide a system whereby those concerned about their carbon footprint can determine what contribution their business or individual action may have had and determine a tangible way to compensate for that activity.
By creating a market based on verified carbon reduction, the most efficient technology will be the most profitable, thereby encouraging and incentivizing innovation through free-market principles. This market will help encourage alternatives to Brazilian rainforest destruction, promote new carbon reduction programs and develop innovative farmland methane emission solutions. With the introduction of carbon credits, individuals and corporations can offset their emissions by taking part in small or large-scale operations that would otherwise not be pursued. For example, deforestation is a major contributing factor towards global warming, yet there is virtually nothing an individual can do to combat that. However, if individuals were to offset their emissions through forest restoration carbon credits, their small collective contributions could have a considerable impact. Similarly by providing landholders with an incentive not to deforest their land, they could make more sustainable choices.
The goal of the ecoSystem is to create a profitable and sustainable way to bring about signif-icant environmental change. We aim to create demand for carbon credits by giving individ-uals the ability to easily fund environmental remediation projects and offset their emissions. Individuals doing this will be rewarded for their actions both in ecoTokens and non-fungible tokens (NFTs). The ecoSystem also aims to allow individuals and corporations to safely store carbon credits on the blockchain for future use or resale. This increases carbon credit demand and allows for further innovation in the space.
Many investments are now shifting to environmentally friendly companies (Appendix IV), most of which have been shown to be strictly marketing or “greenwashing” and have not yet made significant changes. We aim to change this trend by showing transparent tangible improvements for each project completed.
Carbon Credits
There are two markets to choose from within the carbon marketplace: regulated and voluntary. Governments are now mandating (regulating) that companies offset their emissions over a certain threshold by purchasing carbon credits.
The Canadian government is an excellent example of this by charging $40 CAD per tonne of emissions over this threshold. Companies can either pay the tax or purchase regulated carbon credits to offset the cost. The Canadian federal government has mandated that the carbon tax increase to $50 CAD in April 2022 and increase by $15 per year, until reaching $170 per tonne in 2030.
Similar policies are being mandated around the world.
Businesses that need to reduce this regulatory burden are looking to mitigate costs through certified carbon reduction projects. It is estimated that credits inside Canada are currently selling at an average discount of 15% off the government price.
At this rate, a $40 Carbon Credit purchased in 2021 would appreciate 425% by 2030.
For crypto investors, that may not be an exciting return for an extended period. However, the ecoSystem plans to take this holding opportunity to the general public by offering secure and stable regulated credits as NFTs.
Voluntary carbon credits tend to sell for much less than regulated credits. A recent report on voluntary credits showed that the price range of RADD+ credits, the UN-based system, was between $5.92-13.05 per credit (Global Carbon Offsets Report | Carbon Credit Prices | OPIS, 2021). Figure 1.03 shows the number of annual credits issued and planted (retired) between 2007-2019, which shows an increasing trend in voluntary emission offsets. Planting a carbon credit means that the credit has been used and is no longer tradable or redeemable but has gone to offset the carbon for the purchaser.
The trend is evident on the adoption of carbon credits in the voluntary credit space. A recent report estimated the overall carbon market to be worth $272 Billion USD as of 2020 and estimates it will only continue to increase until 2030 due to increased government regulation. The voluntary carbon market has been moving at an incredible rate. Over the past ten years, awareness and demand of the carbon space, has increased at an average of 76% per annum, supply has only increased at a rate of 22%. If this trend continues it is estimated that demand will surpass supply by the end of 2021. The ecoSystem intends to bring balance by increasing the demand for carbon credits while simultaneously increasing supply.
ecoSolution
The ecoSystem plans to play a significant role in the carbon credit market particularly by providing a method for individuals to easily offset their carbon emissions. The average North American for instance, emits roughly 15 tonnes of carbon into the atmosphere per year. Even if a small portion of the population begins to offset their emissions, it will significantly impact our environment.
To acknowledge the contributions of individuals and businesses in making the environment healthier, we will issue collectable NFTs that can be shared on social media and resold on the secondary market. This gives the user a token proving their contribution while providing valuable marketing for the ecoSystem.
The ecoSystem will provide tiered rewards for higher carbon emission offsets. This system allows organizations that want an opportunity to display their NFT on their company website and demonstrate that they are a leader in the ecoSystem.
The carbon credit market has also been plagued with security issues and the “double spending” of carbon credits. Carbon credit fraud is concerning for companies because they could have their credits revoked and thus must pay the taxes on top of the credits they thought they had purchased. Blockchain and NFT issuance solves this problem. The ecoSystem offers fully backed verified carbon credits via NFT for all regulated credits through tokens. Using NFTs and tokenization, carbon credits can be secured and thus solve the double-spending problem.
The ecoSystem seeks to take the carbon credit model one step further by putting a price on the other environmental impacts we make. For instance, Consider how flushing your toilet draws water from a stressed aquifer and then sends the effluent to an overburdened sewage treatment plant.
Another scenario is a conscientious family who understands that buying a larger home in a new development or a cottage at the lake has habitat impacts. In each of these scenarios, it’s challenging to find an easy way to offset these impacts. The ecoSystem solves this problem by selecting quality projects that individual donors can subscribe to that reflect their concern for the environmental footprint their choices have made.
The ecoSystem will have a fully backed pooled account for the voluntary tokens whether the contributor wishes to enhance air, water, or habitat. We will create a multifaceted market by offering:
- Government-mandated greenhouse gas reductions backed by NFTs.
- Tokenized carbon credits.
- Voluntary offset credits for individuals to offset their carbon emissions.
- Offset rewards minted on the Solana blockchain and sharable through social media.
- Voluntary Water Credit tokens.
- Voluntary Habitat Credit tokens.
- Funding for eco-friendly projects that otherwise may not be undertaken with previously unavailable economic rewards.
- Leaderboards for environmental contributors with NFT rewards.
The ecoSystem creates a robust yet flexible method for making significant environmental impacts by introducing a digital currency backed by the assets generated through its projects. Through the ecoSystem, volunteers can fund their initiatives; innovators can source the R&D capital they need to bring their technology to market while providing those who contribute to these efforts with a reward for doing so.
The ecoSystem will be able to generate these various environmental credits through the launchpad portion of the ecoSystem. We aim to create a sustainable cycle that is positive for the environment, businesses and all users. Users are able to fund the projects they feel to be important, projects are able to realize a new revenue source in the generation of environmental credits, individuals and organizations are able to easily help the environment and be recognized for it, and in turn this cycle pays back the original project funders a reward. The main road block for environmental remediation projects is both a lack of funding and a viable business model. We aim to change both of those factors and in so doing we hope to see a flood of new innovation in the space.
ecoToken
The ecoToken is the utility token of the ecoSystem. It gives holders the ability to choose which projects will be pursued and to receive a share of the output from that project for their support. The ecoToken is also a deflationary token; 1% of all proceeds coming back from funded projects and the sale of carbon credits will be used to purchase and burn ecoTokens. This allows holders to participate in the overall success and adoption of the ecoSystem by simply holding ecoTokens. There are three main actions those with ecoTokens can take in relation to the ecoSystem:
- ecoPlanters: Those who “plant” their ecoTokens towards a project or action are committing their ecoTokens or fiat currency with no guaranteed return. Planters are vital to the ecoSystem to ensure projects can get the funding they need. As a reward for playing a critical role, they will be the most heavily rewarded upon the successful completion of a project. ecoPlanters will receive more rewards than ecoStakers.
- ecoStakers: Those who “stake” their ecoTokens towards a project, lock their ecoTokens into a smart contract for a specified amount of time. Once that period of time has ended, ecoStakers will be able to claim their ecoTokens along with any rewards they have gained throughout the project’s lifecycle. ecoRewards are not as high for ecoStakers but their ecoTokens are guaranteed to be refunded after the locked period. A general ecoSystem staking pool will also be available where holders can stake their tokens to the overall network and earn rewards on all projects carried out in the ecoSystem.
- ecoHolders: Those who hold or save their ecoTokens for the long term. Doing so allows ecoHolders to take advantage of the ecoSystem’s deflationary protocol. ecoHolders can always purchase environmental credits with their ecoTokens. The ecoSystem will constantly be looking for ways to transition produced voluntary carbon credits into compulsory carbon credits which would likely result in a significant price increase for ecoHolders.
NOAH Water Technologies, an early adopter of the ecoSystem, has agreed to partner with us to solve significant environmental issues. NOAH’s involvement means we can launch our token with viable projects immediatly.
Along with NOAH’s projects, the ecoSystem team will evaluate other viable projects. We will advance projects that we believe will make significant contributions to the environment through a vetting process. The holders of the ecoTokens can then elect to support individual projects or allow the ecoToken board to determine how best to add value to the planet and the digital currency.
ecoToken
Inside or Outside the ecoSystem
Holders can choose to have their ecoTokens reside inside or outside the ecoSystem. Those outside the ecoSystem can freely trade their token without restrictions. These holders aren’t entitled to any of the ecoRewards that can accrue to those who have their tokens within the ecoSystem but they do still benefit from the deflationary protocols.
Holders within the ecoSystem can utilize their ecoTokens in various ways to benefit the environment or generate more rewards.
ecoStaking
ecoStakers stake their ecoTokens to the ecoSystem Vault, at a Hold Period of their choice. After the Hold Period ends, the user can claim the tokens by transferring them to their crypto wallet, along with any ecoRewards that have accumulated. Claiming tokens removes them from the ecoSystem and they will no longer accrue ecoRewards. Alternatively, the holder can keep their tokens staked and continue to receive rewards based on the return agreed to when staked initially. Holders may also wish to stake any released tokens into other projects. In this case, a new hold would be placed on them.
At the conclusion of the Stake Period, the hold on ecoToken sales is lifted; however, the holder can elect to keep their tokens staked in the ecoSystem Vault Wallet to continue receiving rewards. After the hold period, ecoRewards will accrue based on the last percentage staked until tokens are claimed.
Chart 1.01
Staking Hold Period (Months) and Percent of User’s Pool Share Returned
| Months | Return | Months | Return | Months | Return |
|---|---|---|---|---|---|
| 1 | 15% | 7 | 45% | 13 | 75% |
| 2 | 20% | 8 | 50% | 14 | 80% |
| 3 | 25% | 9 | 65% | 15 | 85% |
| 4 | 30% | 10 | 60% | 16 | 90% |
| 5 | 35% | 11 | 75% | 17 | 95% |
| 6 | 40% | 13 | 70% | 18 | 100% |
- Donation: We will be promoting initiatives that have no commercial value but can significantly contribute to the planet’s overall health. Money committed to these projects should be seen as pure donations; the benefits accrued take the form of a healthier world.
The tokens once allocated are considered “planted” and taken out of the ecoSystem. NFT’s will be attached to these projects, and the contributors will be acknowledged on our website. NFTs will still be provided to donators. - Research & Development: Funding recipients will pledge to return some of any money generated by developing their technology back to the ecoSystem. These returns may take the form of a residual on an IP license or future carbon credtis to be given back to funders. ecoTokens allocated to these projects may be “staked” or “planted.” NFTs from the project will still be provided to contributors.
Staking ecoTokens to a specific project (ecoStaking) entitles the holder to receive ecoRewards based on any return the project yields. ecoRewards are distributed as ecoTokens and can be claimed by stakers. Alternatively, they can reinvest them into other worthy projects and can continue receiving ecoRewards. ecoStakers retain ownership of their ecoTokens; however, while staked they are held and cannot be sold. - These are projects where quantifiable amounts of Greenhouse Gas reductions have already been made or can be anticipated through the sponsorship of the ecoSystem. Carbon credits will be Generated with a set amount given back to funders.
In some cases the return to the ecoSystem will come in the form of Carbon Credits, and used as part of the ecoRewards program. In order to help projects succeed we will work with them to create protocols to enable the production of environmental credits.
