Adam Neumann’s project, Flowcarbon, to add a voluntary carbon market to the blockchain has been paused to wait for markets to stabilize. The venture raised $70 million in the month of May from a group of investors, including a16z.
Of the $70 million, $38 million came from a private presale of Flowcarbon’s Goddess Nature Tokens (GNT). It’s backed by a bundle of certified carbon offset credits. Dana Gibber, the co-founder, said the token launch which was to come about in June-end has been shelved indefinitely.
Tokens and Carbon Credits
Flowcarbon is part of a small group of companies offering cryptocurrency-backed carbon credits. According to experts, carbon credit represents a metric ton of carbon dioxide removed or prevented from entering the atmosphere. It’s purchased through brokers or directly from the developers of carbon projects. Toucan Protocol and KlimaDAO are doing the same. They convert the credits into crypto tokens, whereby they can be traded on the blockchain and then burned. They can also be permanently removed from circulation when the owner wants to nullify their emissions.
Guy Turner, CEO of Trove Research, says if people are buying the tokens because they see it as a money-making machine, then it’s “unhealthy”. Of the 23 million carbon credits that moved to crypto networks in the six months to March, as per KlimaDAO data, under 2% have been used to offset emissions. It should be noted that Verra – the world’s largest carbon offset registry – banned the use of its credits in May to back new digital tokens. It said the practice was causing confusion about the climate benefits of offsets.