New Approach to Voluntary Carbon Market Transactions to increase transparency

okay hello everybody it's cathaline from it clu here and uh today I'm happy to be here to present the third um um pro project actually the second project but is the third session of ethereum T tank and today we have here CO2 angels that will present your project as you know they are the founders so they are happy to be here to get feed feedback from us and um we are here the contributors that will give them feedback and learn how they do their business so let's start David please hi I'm David and here is my partner Eric and we are very pleased to be around such smart and technically skilled people and hopefully by the end of this conversation we can have uh overview of what we lack mainly because of course I think we lack of a lot of stuff but also what we are doing good right now because I'm I have hope that there are some things that we found out which are really interesting and I'm really excited to share mainly the problem that we found out which is not really told in the news or anything in the world and also the solution that we tackled which combines so many technological fields that are advancing such as Ai blockchain and satellite data so yeah uh should we start with the presentation I think and then maybe we can have a discussion we have prepared the presentation in like a pitch style which we are used to so if if that's okay we can start share screening and giving a presentation then we can have a more casual conversation with us would you like to do that okay let me get out my presentation okay like this and let's just share it can everybody see the screen if I can have some feedback yeah looks good for me all right then I will start by presenting it hi I'm Eric our project is called CO2 angels and it's it goal is call and its goal is to cleanse the carbon Market but first let's see how carbon credit works on the voluntary Market here we have a company and a green project the company needs carbon credits in order to achieve net zero emissions while the project gets money in exchange seems like a pretty simple process right right until you take a closer look and realize that over 80% of projects do not achieve their claimed offset goals but why exactly does that happen the answer is a short one because of Fraud and inefficient methods so this is a problem because project worth up to 11 billion overlap with already protected Forest which are equivalently 85% of UK size what wordss in this Washington Post that we found online 39 of these are certified by Major carbon offset registry called Vera but why does this happen so the main things are limited technology outdated transaction system which work mainly on web to and a lack of methodologies to monitor projects and also verify them before registering them allow fraud to try so here comes our idea CO2 Angels powered by Copernicus ecosystem and AI to measure factors like aerosol indexes and vegetation quality we create our own system backed by blockchain to provide transparency we are basically pioneers and created the first blockchain enable carbon offset registry along with that we we want to create our own Global coin but why choose us with us there's no need for a middleman such as the one used in current web to Solutions also we focus on ones who have been shown in research papers that provide more actual carbon sequestration while driving the cost of credits down as always having a smart contract in place we facilitate the purchase of caral credits faster and we make it more accessible to medium or size small-sized companies who don't have access to private Market with high entry barriers this unique combination of AIP with processed satellite data offers a risk-free environment a away from penalties and publish image problem that can arise from frul projects but enough talk let's see how the demo works so we are leveraging AI driven reports powered by the Copernicus ecosystem and while we do that we offer actionable insights I guess something happened David your your audio cut you're muted and please can you hear me now yes but uh please R sure sure again sure I think my internet went down but I haven't got anything I think you see it right now yeah okay so back to the presentation what I was going to say is that we deliver an in-house carbon rating employing latest monitoring methods such as offset achievement ratio and offer GEOS spatial analytics by having our own coin we ensure a transparent Ledger that ensures and securely stores transactions so Eric you can go on yes we see great potential in this area as the market quadruple between 2020 and 2022 and is projected to reach around $40 billion by 2030 our business model is mainly B2B but we also Envision b2g collaborations in the future and our revenue streams are transaction fees and premium subscriptions our customers fall into these two big categories but we start by start by targeting medium to small-sized companies following the Net Zero Trend and for project creators we'll Target NGS and even though we have some competition we differentiate through transparency and data quality our goals are ambitious but byor means achievable as we started by getting in touch with blockchain experts we aim to acquire a team of researchers with collaborations with BBU University by the end of the year then by 2025 we'll get in touch with Copernicus and Esa through Rosa in order to implement CO2 m by 2027 we aim to wrap up legal talks in order to have our own registry and by 2030 become the new standard on the carbon Market this is our team which is more than capable of making that happen and this is our contact information with the QR to our platform thank you and let's shape a brighter future for our planet yes uh thank you so much for letting us present this quick overview of what we are doing and now I'm mainly open to questions that we have that you possibly have regarding the solution problem or whatever in this presentation so we can start and dig down in areas which you can help us yeah that was definitely the fastest presentation I participated but it was nice I understood what are you doing I'm curious how are you combining the actually what what is meaning for you like the AI part combined with blockchain combined with satellites how you how you see together as so as technical road map let's say as a technical road map well first of all uh the MVP that we currently have which I recommend checking you on the app but you have right now it's private but you can see in the video it's basically simulated we won't try to implement the satellite and Ai and blockchain till we have validation for our customers but once we have validation from uh possible Nos and also small companies that would like to invest in carbon projects we aim to do that like by the end of the year then the main thing that we do like we said with the research that we have at BBU is to create basically a methodology of how we can actually process the satellite data and what info we need for that and after we have the required information and how we can set up a AI model to basically process all those things and give us such simple things as a carbon rating we look to set up a ecosystem on the blockchain we can which can facilitate all of this uh if you like we can take a closer look at the blockchain part which isn't right now a prior the priority right now for the blockchain is to find a sufficiently good architecture that can hold this kind of data while also providing as much transparency to the user because right now as you can see in the presentation the problem is that there's not enough transparency of who buys carbon credits of uh what is the actual amount of carbon credits then buy like in the paper I have shown you from Washington post there's a really nice statistic that actually 30% of those 11 billion dollar don't know where they come from which is so interesting because it has some amount of money also uh regarding the actual carbon sequestration because there's not enough methodologies from the scientific part of view projects are basically monitored by the eye like you could go and have some statistic made before you Val register your project on even like a really big register like Vera and nobody says anything like this project in Brazil there's like a really nice conversation with the local people some guys from Germany just come they don't really speak Portuguese and they just ask people oh are you uh is this Forest being protected from deforestation like that's not actually monitoring you you how can you measure CO2 sequestration so to answer your question and to conclude uh we see this as an integration of researchers on the methodology side while having all of this data processed by a big Ai and machine Learning System and to ensure the transpar transp transparency we want to store the project on our registry on the blockchain so we actually there is a Marketplace on the internet on in the hard world that you can see everything like you can query up what is the status of this project what is the CO2 sequestration for the last three months because you can't really do that it's so private and actually it's really hard to even get to these kind of Market okay so as I understood through you said through presentation that you are planning to do to build your own ledger so you're not planning to use not planning to use an ordinary blockchain like something that is already working and you're I mean for example for your MVP what are you planning to use okay you said you want to have some AI you want to have some blockchain but for example for MVP um like what's your goal as technical on the technical side Maybe here the presentation wasn't clear enough we did say that we want to create our own Ledger but that means that we don't um want to accept projects that are registered on other ledgers like Vera which is a registry or there's also gold standard uh but that doesn't mean that we won't use the blockchain system that are currently provided to us so if you want to delve deeper in this blockchain system architecture kind what we want is to create our coin like have a global coin which people can access and also put it on you could on the the decentralized exchanges and use that as our main vehicle for people to enter our Market but here is a problem that we found out is that it's interesting one carbon credit means one uh tone of sequestered carbon but each project has a different price for that carbon which is so interesting because it means that we can't have that Global coin represent each each project in our Marketplace so we are now researching anding in different ideas such as having uh each project have its own nftd and have a let's say monthly uh deliver a batch of nfts uh that are basically the the price for that nft is given by the quality which is processed by AI system and satellite data also there's uh another option which would be to create uh semi fungible tokens but that's I we I think it's a more not that easy to implement but it I think it drives the cost down like the gas fees but mainly the thing is have a global coin to make it easy for everyone to enter the market to have provide liquidity to everybody else that enters that market while having some specialized coin either each project has its own coin each project has its own nfts or sfts what does it mean for you each project so each company have its own token that is H at different price it's not the Global Market at this point that have the same price for I I don't I don't really understand Works can I interrupt interrupt a bit please so uh David uh I think we did not get how carbon credits work today so if you could explain uh this to us because from the so what's carbon credit why this system exist and uh how does it work what's the who are the users or the stakeholders or people who interact with the the current system either it's automated or not it's not important so we we have to first understand uh your business right so you and the features that you develop okay so let's let's take it really simple basically and let's leave the blockchain uh part aside for a moment yeah I think the presentation does this Justice here but we can explain it more in depth so basically there's like a carbon credit comp there's a company that's emitting carbon right and there's this problem that uh if a carbon emits company uh the climate change and environment it all goes down now in order to solve this uh people have come up with this idea okay if we can't reduce our emission of carbon through our infrastructure and so on because I think there's like around of 80% of the global infrastructure emitting carbon people have come up with the idea okay let's invest in project that are offsetting carbon so that we achieve like ID would be a net zero balance so because of this they have it have been developed like two markets there's like the compliance market and also the voluntary Market the compliance Market is basically really really regularized and it's laws and it's uh a mandatory one the biggest one is the European trading system which is I think around from 2005 and this one is like a cap and trade market basically each company that is in this ecosystem receives a number of credits if you're a company that um uses the uh the credits and above that limit then you can have to trade with other companies to get back to your liit now we don't mess with the compliance Market because we don't don't have anything to do with that the problem is with the voluntary carbon Market because right now more and more companies are trying to achieve Net Zero in order to offset all those climate changes so in the voluntary carbon Market the problem is that there's a lot of fraud because of no regularization so basically projects that are creating carbon credits have to be registered somewhere and have to have a lot of certificate cuts and so forth is everything correct uh have you understood what I'm saying so far about there's like a company that wants to offset their emissions and there's like a project that can provide that now the thing is a company that is creating these project have multiple projects so the thing with the uh token is that it's a token for each project because the company can create multiple project like I said is everything clear so far uh so far yes and how is it going so far for the current system can you give an specific example uh not necessarily naming a company but some specific example where you could U show or demonstrate that the system is not functioning or um yes what's going wrong exactly I can even show you there's a cool Washington Post uh about that we presenting carbon Cowboys I think I which basically I have to connect I'll do it really quick the thing is that companies such as Netflix or even air friends or like Spotify invest in these kinds of projects off that's a shame I can't really connect okay I I still can present about this things so this is a carbon project in Brazil there are different kinds of carbon project they can be those that avoid the creation of carbon they can be the those that actually eliminate carbon from the asori and also they can be project that reduce carbon most of the project on the market are actually those that avoid because those are really easy to implement like you just say okay I take this area of a forest and I say I protect it from those that want to cut down the trees and this is what they did in Brazil they actually took uh considerable size like uh you can see here in the presentation they took actually 80% of the UK size in the Brazil Amazon forest and they said we protect this part so that uh in the future when someone wants to cut down the trees the cbond uh is the carbon is seested by the trees that are being planted there now the problem with this is that here you can see that that that size overlaps with already protected for like those are basically reservations and nobody could tell the difference because there's no reglementation nobody said okay this part is your this part is mine and those that are buying this carbon credits because there's no uh transparency or what the project does is basically just a page a description like you can go and donate to it and there's no like data okay we just seested this amount this amount this amount this amount and we have these statistics there's nothing like that it's just like a description the amount of money and you just go and buy it if you want and the thing here so let's say let's say that that I uh I have a company that uh produces uh or that a polluting company and I want to buy some carbon credits to offset my pollution my the question is how much should uh how can I know how much to buy to get to a zero uh offset right and uh who who do I buy it from uh I can where does the where does the money go basically the money goes to the project that you're funding the carbon offset project that you're funding and trans okay so so that means that means that the the first the first step is Okay I uh I have to pick there there is an initial step of picking some carbon offsetting company correct and and then then that's the only company that I can buy uh carbon credits from right not necessarily not necessarily you can invest in multiple project like have a portfolio let's say you are a big company like Coca-Cola have a lot of factories you can have a select a portol Olio but that portfolio is now because it's in web too it's measured by banks by Brokers and you go on this marketplaces not by your you you go to someone else which is an expert in this domain and they select basically best project okay got it got it so so now uh how how how do do I know how much carbon credits should I buy just to be becom zero carbon well that depends on how much carbon you're emitting okay who's who establishes that who establishes that how much carbon I'm emitting as a company is there an authority that does that or uh so basically I if you are in the European trading system they monitor your carbon emissions because they have to be the credit amounts and usually this information we we don't provide the services to access those information we don't work with that it's not our problem our problem is not to find out how much carbon you need right now our problem is that if you need carbon from somewhere you should get it from where the carbon actually happens because right now with the current market situation the thing that's going to happen is you get by 2050 and everybody says we are n zero emissions but actually nobody's n zero emission because all the car projects are actually fraud okay how how are those uh projects fraud okay you describe the example with the from Brazil what other broads are there or basically if this is uh is this the place where you want to apply and enable more transparency I can provide you other examples if you want sorry um the thing is that fraud happens in the first place like we see here the funding allocated to protect forest was allocated to protect already protected forests which is straight up fraud but another thing very that is very common on this carbon Market is that projects are overestimated by a lot and that's due to lack of methodologies to estimate how well the project is going to do and lack of monitoring how well the project does the way it works is that before the project project there are some calculations Made Simple calculations with a pen and paper most often and there are not implemented so many Advanced tool like tools like satellite monitoring and such to see how the project does and also companies that invest in these projects do not get updates on how the project is going to give you another concrete example uh project carbon project in Africa which aim to replace inefficient cook stoves with uh sensors and electric ones in order to lower the carbon emission for from those cook stes um took place and it had overestimations for up to eight times after one of our competitors the guys from gold Stander came in and they implemented their own sensor in the kitchens to track carbon emissions they constantly asked the people that had implemented these cook stoves through questionaries how is it going any difficulties was this implemented here to be more precise they implemented their own methodology to track how this project is going and if the money is properly allocated it went down to only two times an overestimation from eight so the thing is people don't really pay attention where the funds go and most often they don't have the tools to see how well the project does and we offer that okay got it so so so you are addressing [Music] multiple uh multiple problems so far I think uh about inefficiency just one question to be clear for me like who is allowing this uh people that are overestimating to transform their like their projects in credits so I I see here the biggest problem okay so as you said about Amazon who is allowing them to fraud because as I as I see this is the biggest problem even more than transparency yes uh fraud happens most often at the highest levels like where the big money is and the thing that's common there is that first of all is the lack of awareness to the problem the word is not spread around enough and second of all there are often times when the penalty for committing fraud is actually cheaper if you have that money like if you are the biggest companies but for our Target the medium and small siiz companies it's not that rentable to make that fraud happen or to to appeal to such methods and the other things that what we offer and might attract the bigger companies later on is that they're also risking their image most often they blame the project provider in our example with the carbon Cowboys this was Vera Vera is also one of our competitors which has their own ecosystem for regulating the voluntary carbon Market they have um uh companies the opportunity to buy green project and such and maybe they have some other interests when cooperating with such large companies that led to fraud I could give you another example um which have which we have researched it's about the company shell regarding this question is it worth for them to actually be okay with projects that are fraudulent and the answer was yes they there was like an even article saying that uh your mic cut off until David comes back I would have some some other question uh not sure if hears me but this thing as far as I know it's that big that there is an ESG index if I'm not wrong on the stock markets in the USA and the E stands for environmental and basically a lot of investors look at these kind of uh metrics before investing in certain companies also in the United States there is an agency I think it's called Environmental Protection or something like that agency that uh regulates and looks over the the big emission guys to call it like like this in Europe I know there is also a um this kind of agency not sure if you're I believe it's called yeah ETS okay so uh that one and I know that in Romania we also have some uh tools to track how the deforestation is going to if you see I don't know a big truck filled with wood on the roads you can check if they are legal or not and stuff like this uh I know I saw some documentaries from an O NGO on this part not sure if you're aware of it I found it's called sual because you are also you also saying you are also saying about uh satellite images and I was curious if you do integrate with some all for example for Romania or other things like this because there are some tracking uh websites and mechanisms for this and I know this is a big Market yes for sure we are not limitating ourselves to satellite tracking uh even though it is useful for tracking Especial deforestation which is the most common green project topic and also track heat zones we also a to have our own methodologies that is first of all to go back to Forest and vegetation actually analyze the ground in which the vegetation is growing and the type of plants that are going to offset this carbon to have more precise estimation that's not related to satellites and one recommendation we received from our mentors is to use drones to monitor bigger projects that take place okay and how do you how do you monitor the grounds I mean that means you have to put some sensors on every ground basically and that requires a lot of ground work so you basically need to travel or have someone at the spot in order to to put those sensors right yeah but not necessarily you can also analyze ground samples in a lab and then get your estimations from there which is still way more accurate than what is already happening okay and given because I started with the previous question because I know how the I know I'm I'm quite aware of how big the market this Market is of carbon emissions and I wanted to ask if so I'm a company and I want to buy some uh CO2 whatever right carbon credit right in order for me to get to the uh etss for them to reduce my carbon emissions don't I need something to prove that I bought the carbon credits so you're the marketplace if I understood right and how do you provide or how should I trust your Marketplace that the carbon credits that you're selling are valid um that comes from our customers on the other side which are the project providers which are projects that already preferably have a history of these kinds of transactions and um the step of building credibility will take sometime as well and the proof will come through certain certifications once we get our methodologies approved okay so basically you're requiring the uh carbon credit sellers to provide you with some documents right based on their country and legislation and stuff like this so if we want to go this route of having uh credibility on the market the main thing that we're trying to focus is get into the you European ecosystem and uh basically have a patent on our methodology because that's our selling point in terms of being able to say okay this carbon credit is actually uh worth it's money because if everything is transparent and the data from the satellite is accurate because it's provided by the European Union through the Copernicus ecosystem then by yes the project need to provide uh certain data and files and reports and so forth but it's our job to verify and monitor them through our systems which will required the legal authorization and other things from the EUR European Union okay that that makes perfect sense and uh how much do you think it will get to on board such a carbon credit seller for example if we start you start today with whatever project how much time you think it takes as uh in before I'm able able to sell on on your Marketplace basically um assuming we have first we have to like I said we have to have our tools approved and methodologies and assuming we would have those already implemented we estimated the process to get in talks with the European associations and so on around two or three years that's what we estimated until now but our lead on that is to get in touch with uh rosin which is here in Romania and through the Heaton that we presented our idea last month we have some leads to get in contact with those people and then get in contact with the European institutions okay thank you any other question anybody yeah any other question we are open oh Alex you have question or okay I you have muted microphone sorry so let's let's say that we have in place the processes through which you can um authenticate the the green projects and uh that they are let's say the Bal tokens or whatever they they uh they sell on the marketplace is authentic let's let's take that part away and move to the uh transaction system what what's the problem with the transaction system now I I know maybe you have specified this in the presentation but uh it was a bit quick and brief and uh could you explain a bit again how how it works now where they transact what what do they transa if I give you uh money uh for your project what do you receive in exchange exactly is it a certificate what's how exactly does it work yes um to begin with your first question the issue with the current transaction system is that 80 to 90% of transactions are completed by Bank transfers or cash which is very can be a times slow inaccessible if we talk about different currencies and most often when a company is looking for a green project and they want to implement this project and fund it they also need a broker which was specified in the presentation as a middleman which can also present additional fees to that and also when you have a blockchain transac transaction you also automatically have way more credibility and access to the history of these transactions and for the next question and to add on that I'll pass it to David because he's more knowledgeable in the blockchain area so like Eric said the problem is that you can't really Trace how the transactions work like you can see from 11 billion dollar in the Amazon Project 30% you don't know where it comes and you can't see uh which part of the the money that has been invested has been invested in good credit because uh usually um this credits uh are released in like batches I think for now some have like yearly and with the thing is that when I you I give you money for your project to invest in your green project you give me the credit but you also give me the certificate so that in the future uh I if I have those carbon credits I can burn them which basically means that uh those credits have been used and I have equivalent that amount of carbon with the amount that I have emitted and the system that we want to create which has its benefits is that it's more accessible because right now we did a lot of research of where are the market we it's so hard to actually find the market if you're just people searching the internet and you there's no traceability everything is just covered in Shadows and also it's a lot to even get into such a market it's like a market in abudhabi I think and you have to enter some exorbitant amount of money just to actually enter and see the projects and um what we want to provide is actually the possibility for everyone to be able to see that what happens in such a market even for the regular people since if you want to go on the blockchain and have our own CL coin which means that you don't need to actually be company that needs offsetting because if it's a coin that is going to be traded on exchanges and so forth even regular people can invest it and it's it would be really good to be able to see everything and have more transparency to the market if it makes sense I think you Derek sorry to sum up I said said we bring transparency we a to lower transaction fees and also bring standardization to the market that's a lot of stuff that you want to handle so so where where do you start what's your first what's your minimum viable product what's your first Market because uh it seems to be complex um first of all because there there is no standard um they would probably want to go to one region where it is more clear where it's easier to start uh you said about uh the Romanian Authority that takes uh care of this and you want to implement something in there um what's your first product basically you show the demo but I I I think the video was either interrupted or it was very short or it was not clear can you can you go again through the uh through your demo through your UI yes we can go again to the demo so the UI is showing our first Target are going to be first of all project providers in order to have transaction on your platform you need the product you need project providers and we'll start with NGS we also have leads on that and then learning small to medium siiz comp companies that's the beginning on the business part now to the demo so here it is so basically the thing would be that you go here and you can see a diff we can see different information about the project we have taken this real example about certain carpatian Forest conservation project done by an NGO and the thing would be you can you can have the information how the project is going like um which we have as a unique selling point would be that using satellite data and AI we can deliver as you can see in the demo uh for now we have considered like monthly reports and um with the monthly report we could uh Drive the market in a certain direction which the goal would be to have like a reward system for the project that are actually doing good for the community and are actually doing carbon sequestration and as you can see here uh we have provided this percentage which is uh the offset achievement ratio there's a really cool research paper uh done last year which was the first one that did a uh crosssectional review of the whole literature on the carbon credit and they analyzed all the methodologies that are being used and they have found out that this metric offset achievement ratio was the best one of estimating the success of this project which is in short it means that we have a initial assessment of how the project is going to go and then we have an assessment during the project and also at the end and the ratio of what was the initial assessment and the ongoing and final assessment and using this you you can drive the prices of each carbon project and here we have used um machine learning and AI to try and do a l classification because the goal would be to if you go into the details if you basically know on average the amount and you can see also on this graph let me go again here on this graph the goal would be to have uh the amount of trees planted viewed from the satellite which those that were being reported but also those that were being expected because if you take this reforestation project if you have the number of actual trees that are being planted you can know the amount of CO2 that is seested can actually have the difference which would dve the price upward down and to also answer that question where we're going to start we want to start really narrow because there lot I think D has connection issues again um can you hear us apologize no problem sorry I think my network has gone down no problem try again okay so like I said the idea would be using this satellite data to provide the basic thing which be the carbon rating and the thing with the carbon rating is that it takes other factors into consideration to predict uh also the how the project is going right now but the future like here we simulating the thing is that the project uh has additionality which means that actually is doing carbon sequestration at the rate it says it's going to do but also we said that it could risk like stock performance du to Lander because this is also a problem like in the Amazon there's also the problem which land is to belongs to whom and also the thing is that uh this project are not focused only on doing carbon sequestration since there are environmental project they focus on having impact to everything around and we have to also take this into account like the social the economic and all the uh development goals that we could have and I try to simulate all of this and here we I really like to be able to have this to the public and everybody be able to see in real time how the project is going like you can see different indices this one is basically the the vegetation one and it's from satellite and have a a really cool overview of everything and at the end uh what we want to do here I said also that the carbon credits are sold in batches in years and basically this thing is the main flow and our the other unique selling point would be this one have like a public blockchain Ledger which you can see uh the transactions that are being made this would be like the main user flow that we want to focus to uh to to the companies that are trying to buy carbon credit be able to go see the project how it's going uh see the report the report kind of thing is that uh in order to have a viable business model we we thought about having a subscription based where you can have additional information and tools but the thing is that we have to research what kind of uh information are valuable and the main driver here is that you can see ev every small company can go here and buy there's no need for a broker there's no need for a middle band and every each information that is General can be available to everyone this will be our MVP that I would like to implement the back end into after we have validated each and every feature with uh NGS and small companies that want to invest in us okay cool and uh so so that means that uh the let's say centralized points are the entities that allow uh allow um minting tokens and the entities that allow burning tokens right in this case it would be you or your project because you want to standardize um um okay and then there's another aspect that uh okay if I buy credits can I use them in my country in my um jurisdiction that would be another question so probably there's also compatibility of the both sides of the marketplace right but yes yes so it's a probably it's best to find the smallest uh area to start the project in and to laun MVP in there um okay I I I think I finally got got it but uh okay so do you have question you had some questions about how to implement the blockchain transaction part you say something about the fungibility of the tokens that you're not sure that tokens should be fible or non fible so probably we can answer these kind of questions now so yeah thank you so much for being able to and going to be able to answer those the question that we mainly have is that let's go into a little bit more technical we need basically two main smart contracts we need one for the register and have the logic from for uh using the satellite data to verify the project able to put it on the registry on the blockchain and also have a smart contract for the transaction now there is a tricky part because uh in order to enhance our product we want to implement for contracts so basically buying uh carbon credits at the price of today and then uh getting them in the future but but still at the price if you know the project is going to go well based on the satellite data you get so there's like a lot of logic of enabling credits if the uh if there's like a for contract and then there's also the logic of burning the credits because we need to basically equivalent a carbon credit with a coin but like I said there's the issue that one carbon credit has different price for each project so my first question would be as an overview what do you think would be an optimal solution from your perspective regarding the coin and nfts should we have like a global coin like I said and then nfts for each project should we have just one coin for each project should we have just one coin for everything that's our issue right now because if I find the solution to this then I can think more in depth of how can I make the logic behind it okay I I'll try to answer it so um probably it's the easiest way to in order to know on a market in general in order to not get into liquidity problems because if you have every project has its own coin uh then you get into the situation where there's no not enough liquidity uh for a certain project or at least for small projects and uh the easy or the best way or the ideal way it would be to go with something that's fible fible meaning that one token from one project values just as much as one token from whatever other project right uh but to do that uh you can you should find the smallest unit that's that allows you to make the tokens fible right maybe um I know quantity of CO2 emitted or or um whatever whatever thing that's more more close to the natural way that uh carbon emission works and uh then if even if other projects have uh different credits depending on the jurisdiction or or whatever maybe they they just do this credits by by themselves and you can equivalate those credits to your tokens and work with your base token I think so it might work yes but uh but before but before going deeper into that my question is why not use dollars or whatever Euros or whatever other Fiat money like we said uh if we do this then what differentiates are from the marketplaces that do the same um that's well you you can still have you can still have uh uh traceability you can still have um whatever transparency that level that you want to work to work towards you can just use I know stable coin like you know stable coins out there the scheme we also aim to have standardization okay and that's what such coin would bring okay might be easier easier to start with the fiat currency as you said though yes of course because uh for every blockchain project that is launched the first question is in this kind of sessions is why do you need a token no the first question is do you need blockchain right can you do this with the database do need blockchain the thing that go ahead the thing is that with the blockchain by having a registry we basically have all the data that should be publicly available about the project independent from us like we don't even have to exist basically and everybody can make a query and see Project X how is doing this mom how he doing and if as long as that's true but as long as uh The Entity that emits or that means tokens and burn tokens uh is some someone that's not you right so as long as your if your project is on uh let's say runs a deploys a smart contract and every transaction goes to the smart contract but you as an a centralized entity Emit and burn tokens depending on the data that you have on whatever activity then you're still centralized okay you can um so let's challenge a bit these decisions MH yes so so you're you're still a centralized point right in this case you are probably right yeah and and after after that maybe let's try and reduce it because the the problem is very interesting because it might make sense because you're kind of creating something or you could create some that something that looks very much like a let's say CO2 primitive and primitive is usually uh let's say an Financial instrument right can be called is called the Primitive like I know options Futures uh whatever whatever basic Financial instrument even a token is a primitive so you create this uh primitive identifyed and then you can leverage various other um other protocols that there are on the blockchain like for example you don't need to create your the marketplace yourself you can use whatever uh decentralized exchange for trading you do not need to um to uh address the issue with the forward contracts because there are uh different uh financial instruments for that that there uh you have Futures you have U um options and other uh instruments that you you could reuse and uh this way you would just limit uh the focus on creating that primitive which is if I see a carbon credit or your let's say carbon credit is mitted by your project or um Meed by your project I can be assured as a user or just as a supervisor that that carbon credit is uh consistent with reality and that it is usable by whoever uh wants to buy it whoever is the buyer of the of the credit so because otherwise the problem is very big and it's very it spans across various so starting from sensors to uh transaction systems to I don't know integrating with different regulators and so on so it's very very broad let's say so what I'm understanding from your answer is that should we try and delegate certain services that yes of course the use of course so um you you can provide the user interface but in the in the back end you can use whatever other open protocols there are for trading for um I don't know exchanging value and so on but that's that's probably a more deeper problem that's that's uh based I made a lot of assumptions but then because I'm not sure that I got the entire scope in of your project into my head but I'm trying to also start the discussion here I I understand your point is the the first motivation that we had of using blockchain was that like we said even if let's say you have certain methodology put in place like Vera or gold Stander there's usually the possibility that if those yeah today internet is not your friend yeah he's reconnecting shortly to finish his point0 we apologize again for that no no no issues no problem Bas on friendly space based on your propose for them to like have just one token I was thinking that and here maybe Eric can help me so if I'm based in Romania and I need credits I can buy credits from everywhere in the world to be on zero trans transmission carbon like it's a global carbon carbon credits are sort of globalized the term as we know for so there is legislation globally like no that's the problem because there's no legislation globally like the term is global but everyone interprets it in its own way I think right yeah like the way the projects work like we said in Brazil there's no legislation for this kind of project they probably don't even know this kind of project exist because they're not at the stage that they should care about this project so the the problem here with the you you can buy from everywhere but you're not sure how everything goes and like I said before I went off is that by using blockchain we ensure that the information we store there is immutably and we can't change it so there's no uh there can be no accusation and everything can be verified so there's the goal would be to have like zero fraud since everything can be traced as long as you do not hold ownership to the contracts or to change data because even if you have the smart contracts on the blockchain you can uh depending on how you write it you can change and do whatever you want in there after it's launched right so this is place where you want to figure out how how do I know that I cannot be uh know the quote from um from Google don't be evil how can I ensure someone that I cannot be evil meaning even if I want to be evil I cannot be able that's basically the principle of um that that we're looking towards so so yeah probably there's a bit of thought on work to be put in here but um this should be the idea because otherwise you can as just as well use the simple database it works faster uh it's a lot cheaper uh you can provide transparency by putting an a user interface in there and um make it open to whoever wants to access your website the data through your website right uh and in this uh in this case because otherwise if you still want to go the blockchain way uh I would uh uh first have to make sure that you cannot temper with the data on the blockchain in order to get some value from it right because even if you can uh temper with it or you can um I know yourself could be corruptible in this way then okay some of the blockchain but it doesn't serve too much value right it's still data so that's that's why I think like your propos Alex with just one single token and be the centralized Authority who it's setting everything up U it's maybe in my opinion like not the best solution as I see I see it an Open Marketplace where everybody is tokenized its own project and oh carbon as you said so for example for me if like there is a marketpl with 100 projects each of the projects have its own token maybe I will not buy as as you said if you have just one token I don't know from where where I buy but I will have um if I have one token for each project I have the power to directly buy the project that I'm interested in for example if I'm from Romania I can buy for three projects from Europe that I trust them and I don't need any Authority like they they don't need any Authority yes okay true but you don't know what you're buying so let's say I'm the project I'm emitting tokens how how do you verify that I have emitted the correct number let's say I have planted a tree but I have emitted three time more tokens than someone else uh who has planted the same tree but uh so you you know what I means so that's one of the that's actually one of the problems that the guys presented so the fact that there are multiple tokens that it doesn't solve the the authenticity of them yeah that's true but I don't see it like really solvable I mean it might be that there are different other mechanisms so yeah so like I see the trust like really important for example yeah so there's a frust issue in here yeah exactly and that's why maybe if I at least have the possibility to buy from the projects from Europe maybe for me it's still more trustable than from the other part and we'll still have a Marketplace for that that is decentralized yeah I agree here but what I wanted to add and I think I don't know if has been mentioned so far is that uh yes they could be fraud from the side of the provider but also can there can be fraud on the one that buys like it's a really usual thing since you can't monitor what you do with those those credits like you can double count them you can basically use that credit twice before you actually burn it and nobody can tell that because nobody knows what to do with that credit and by having each credit being monitored on the blockchain there's like how would you double count that that's the issue and the thing is the company doesn't need to to burn those it it can stay there but once they do burn those we know that they have been burned yeah so you are saying that the blockchain is solving the double spending problem yeah so okay so if if that's that's the kind of FR that happens often then yes so this side of it can be sold yes so double counting meaning um double counting that I sell the same uh same credits to to different companies for example that's one double double counting when you sell the credits but also let's say I'm Coca-Cola and I buy uh let's say one credit I can use it five times before I actually say in the legislation that I burn yeah and nobody can verify that why nobody verifies this I I mean for me I don't understand how this works it sounds like a project for high school at Global level like who checking these guys because on the voluntary market like I said there's no like government it's not it's not about the government the government cares only about the compliant Market but the thing is that more and more Pro companies they don't achieve their uh offset goals by going to the compliant market and also the compliant Market is the as big in Europe in the USA it's like there's there's only like in one state like in California it has just been implemented in the last 10 years and let's not even talk about uh Asia I think in Asia they just started like in the last five years in China to implement like a global trading system of carbon that but again that's compliant the the whole problem of voluntary carbon Market is because if you just want to create a project and you're really good with the reports and with the files you can actually create a project in Amazon and nobody would care you just go to Vera you pay the money and you created the project because that's what they care about they care about to get their fees and they don't care about what actually happens like this research paper that we have found out this is why we chose to pchas to pursue NGO is that is an interesting statistic like on the reforestation side a company that wanted to sell credits actually had the 20% offet achievement ratio which is like really low like 100% would be that you deliver what you said to deliver 20% like not nearly half but NGS had like a 40% yeah sounds it sounds yeah like an awful situation um I think so so because we're we're getting we we'll have to wrap up easily here so um I think what you could do is first okay you don't try to solve the problem from the G from in one step because it's uh first of all the problem is uh trying to connect to Worlds which is the physical world and the let's say the virtual or onchain world uh when whatever project tries to do that uh has uh centralized points and points of failure okay so so it's basically not possible to to do it perfectly it is possible to solve this problem perfectly when you have assets and actors that are all in one place or let's say in one blockchain then you can do that but when you try to connect the Two Worlds or multiple worlds it's basically impossible because of the of all the gateways that you have are centralized points of failure uh the but uh try try to uh do the architecture in a very simple way so first establish the roles okay so I have uh uh the company and um that um in the U the company the broker call it call it just by rules it doesn't mean it has to be an external broker you can be the broker uh so who me the tokens who burns the tokens and uh who's uh how do you hold them accountable for minting and burning token if I have minted the a token or carbon credit token that means that I have I promise that I will have I will have to plant a tree or do some um carbon what was the ter carbon sequestration right MH so so that's another point then now if I after I buy the Tok so the problem with the transactions are not a not a problem at all on blockchain but um on the other end if I um buy the credit and I want to to burn it because I have polluted so uh the centralized point in there is the uh person or the entity that actually burns the token because someone has to verify right that that amount of uh the correct amount has been burn and so so that would be probably the the first uh the first step to have a diagram or something like that there shouldn't be too many centralized points um and then um um probably in another step later try to address them one by one and try to find a solution one by one and um I think that's about it for me so we can help you with that I I know so maybe if you if we still get in touch of that we can could also go to a white board or or just to yeah we would appreciate that sketch something on napkin and discuss it in more detail because it's very interesting yes there is a market in there and um yes it can get better or more transparent and more Fair even if not perfectly at least some points can be alleviated yeah that was the main thing is because the market is so bad like even a little bit of help would do massive adjustments and nobody nobody took any action for like the last 25 years from how long this thing is has been going and only in the past five or six years company have started to realize and to go back to your point uh my question would be then should we try to First solve the problems that don't involve blockchain and then try to integrate them with blockchain and because to me now it sounds way easier to actually make it work without blockchain and then add blockchain on top of it rather than build everything from blockchain and then put things on top of it you can analyze it in so again it's a trust trust issue if you can minimize trust or to create trustless which is a term that we we use in our space lot so how can I trust that that carbon credit is authentic and or that whatever action regarding that carbo credit is actually happening in real life yes yeah so so probably the blockchain side is the easiest in this case so or or design it in the in the way let's say you're the marketplace you have built it on top of a normal centralized database assume that you're are a correct non-c corruptable entity how do you ensure that the other guys don't screw you up or screw your system [Music] or start from from this kind of a set of assumptions and then because if you can get to to that if you can get to a high percentage of certainty that others do not abuse your system then you can uh look forward to implement it on chain and then it then it will make sense MH mhm yes and and about the business model I think don't shouldn't care a lot that that this point because if your Marketplace you can um already so so so where there are transactions there are fees that you can um you can charge and it wouldn't be a problem for someone to yeah so I guess the business model is not initially there here mhm mhm so and you can design a lot of them and there are so so many templates or or so many models that are already floating around you can pick or Inspire yourself from from other places so to just conclude what you said the main thing we should focus on today and onwards is to make uh an design or a white paper something more technical of how we can tell the difference between fake and real carbon credits fake and real actions yes and fake and real actions related to credits because the credits themselves are fake right so the they are either paper they they do not represent the fact so so they're not a certif even a certificate is a paper right so it's actions related to that paper are they authentic or not mhm okay got it and whatever systems there are yeah so so so there are also there are also some mechanisms in blockchains that can help but I think so from the top of my mind you could uh as mechanisms as um let's see um some kind of staking or so that you so there is this action of [Music] U never mind so so I'll I'll better leave this for for later so okay there are probably other mechanism on blockchain that that they can also adjust or or add a bit to your but it's it's first real life problem of making sure that you have authentic system MH so first fix the real life issue then see how you can integrate it in the which one yeah seems like a really good advice so I'm really GL we got to do this presentation oh we can talk afterwards to so design the system centralized doesn't matter about the blockchain think about how okay how assuming that we are 100% Fair how is the other actors in the system uh hold the accountable to be fairh and if you have achieved a certain amount of uh or let's say given degree of certainty then you can just take your side and convert it to onchain stuff then you you'll have even more incorrupt incorruptibility of your system got it great cool thanks a lot for your presentation thank you very much for the question and feedback as well and we are glad we had the opportunity to do this yeah for being here so I think this is this was the final discussion on this ethereum thing Tang we are waiting you all to tomorrow at our hangout and beer and that's all byebye bye by good night bye everyone thanks for joining