Flowcarbon and Solid World, two blockchain-based companies that are building the on-chain infrastructure for carbon markets, announce their partnership that will make carbon credits broadly accessible to investors. New sources of capital are essential in order to meet the anticipated $50-100B demand for carbon offsets by 2030. By building a liquid forward carbon market, investors will be able to invest in carbon credits as an asset class, providing immediate capital for carbon project developers.
“Flowcarbon is continuing to push forward innovations to get capital into the hands of carbon project developers and identify gaps in the current market,” said Philip Fogel, Chief Blockchain Strategist for Flowcarbon.
“Right now market participation is hindered by how it’s structured. Carbon is an untapped financial asset that needs a formal marketplace to enable transacting, blockchain’s framework makes it possible to quickly scale this infrastructure.”
The Solid World and Flowcarbon partnership will create the foundation for a system that is similar to what crop farmers have relied on for centuries. Solid World is solving the problem of derisking forward carbon credits and providing infrastructure for investors to fund new projects in a capital efficient way, whereas Flowcarbon is creating a liquid market for credits once they are issued. Once credits are issued that have been previously funded by investors, they can be bridged to Flowcarbon’s infrastructure and used for financial transactions.
“Investors can choose to sell forward carbon credits from their books when the market looks attractive or leverage them as collateral in a non-custodial way to fund other projects,” explains Solid World founder Stenver Jerkku. “Our on-chain system provides investors new options previously unavailable in the traditional carbon markets and minimizes risk of non-delivery because forward carbon credits on our infrastructure go through rigorous due diligence.”
The infrastructure will provide clear price signals and path to liquidity needed by both investors and carbon project developers. Flowcarbon is also actively doing pre-purchasing and will be able to use Solid World DAO's infrastructure to gain liquidity and leverage their positions. By participating, investors will be able to use their investment in forward carbon contracts for financial transactions or as collateral at any time.
"Solid World DAO is doing something important by helping to start new carbon projects by making forward deals liquid and transparent in the voluntary carbon market,” said Fogel. “They are also opening up the DeFi world for the forward market. We see great potential in this mission and are eager to help them achieve this goal!"
Solid World Dao will be able to bring even more liquidity into blockchain carbon markets by making it possible for new projects to enter the space.
“The Flowcarbon 2-way bridge token pools will massively speed up web3 adoption for carbon credits for institutions,” said Jerkku. “We can't wait to collaborate on setting up certified credit pools with flow and bridge Solid World DAO forward credits to Flowcarbon pools once they get certified."
Flowcarbon is a pioneering climate technology company that brings carbon offsets onto the blockchain. Its mission is to make carbon markets accessible and transparent, enabling billions of dollars to be invested directly into projects that combat climate change. Founded by a team of experienced entrepreneurs with collective expertise in carbon, sustainability, and blockchain technology, and backed by some of the biggest investors in the world, flowcarbon is committed to driving real impact for people, biodiversity, and the planet.
Solid World DAO is building the world's first blockchain infrastructure for forward credits that's designed for institutions. The infrastructure will facilitate funding of new carbon projects and provide a path to liquidity for forward credits. This path to liquidity will provide clear and fair market prices to new carbon projects, while helping institutions become capital efficient. Solid World DAO will derisk forward carbon credits and make it possible to use them as collateral, while allowing users to trade many different types of forward carbon credits.