ReFi Singapore launch highlights: Why should Web3 care about impact?

Shihan Fang
8 min readFeb 28, 2024

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Prakash Somosundrum, CEO of Enjinstarter and Co-founder of AYA Foundation chats about ReFi and bringing tech innovation into the carbon market.

WeFie from the launch of ReFi Singapore on 16 Feb 2024.

Prakash Somosundrum may be your quintessential crypto bro. He sold his first company, an ad agency in 2011, and then began dabbling in cryptocurrencies to some success. He turned $100 into $10,000 after investing in the Ethereum ICO (initial coin offering), spent it all on partying, and hung out with Vitalik Buterin when he moved into town.

Sometime in 2021, he co-founded a Web3 launchpad called Enjinstarter, focusing on gaming, entertainment, and metaverse projects. He subsequently raised US$5.5 million through a virtual launch in the middle of Covid.

The Enjinstarter token (EJS) “did phenomenally well for our investors” is how he describes Enjinstarter, which is now invested in about 80 businesses.

In 2023, last year, Somosundrum co-founded another launchpad, AYA Foundation. This time he’s focused on carbon financing and impact.

I was curious to find out if it was because he grew a conscience, or whether he sensed a new market opportunity. Turns out, it’s both.

This post showcases the highlights from Prakash’s AMA at the ReFi Singapore launch on 16 Feb 2024. Listen to the entire discussion on Regen Supply. The audio recording isn’t great, apologies. Will do better next time!

Han: First question, is crypto bro an accurate way of describing you?

Somosundrum: Actually I’m not crypto bro enough, I wish I was. We talked about airdrops earlier. I’ve been passively collecting tokens, but I’m not actively hunting or farming a lot of it. However, my team is making a whole lot of money doing this degen stuff.

My focus with AYA Foundation now is to bring blockchain innovation and even AI to solve the trust issue in green financing. We also want to help project developers in the Global South raise capital through crowdfunding.

We’re targeting projects in Southeast Asia, in South Asia, in Africa, and hopefully in South America someday.

Audience: How much of your work with AYA translates to making a profit, and how much of this translates into making impact? Which do you get more joy from?

Somosundrum: We’re a commercial entity, so we have to make money. On top of that, we’re venture-funded by a Singapore-based fund, True Global Ventures. They invested $5 million in our Series A.

So for us, the projects have to deliver value. But that doesn’t mean it’s purely commercial. We’ve started to measure the real-world impact of the projects that we’re investing in. It could be in terms of the carbon that’s been sequestrated or the impact that they’ve delivered in terms of helping indigenous people, and so on..

Dr Simon from Handprint found a way to quantify impact. As an alternative to a unicorn in the startup space, the guys at Handprint came up with the notion of a phoenix startup. A phoenix startup is commercially viable, is based on a sustainable business model, and you can measure the impact that they’re delivering in the real world.

In a nutshell, we look for companies that have a triple bottom line: commercially viable, needs to be great for the planet and needs to have a great purpose.

Han: So I just want to note that the growth model for a typical Web3 business versus an impact business, is very, very different. What you’re saying is for a Web3 business, you’re looking for a unicorn. For an impact business, you are looking for a phoenix. Are your investors on board with the Phoenix methodology?

Somosumdrum: Well, it takes a lot of education. Our approach is to bring a whole lot of storytelling into it. So I’ll give you an example. There’s a small country called Palau. When I first travelled to Palau, I had to take what is known as the Palau Pledge. Literally, it’s a chop on your passport. It’s a full page that you actually pledge: when you visit the country, you’re not going to take anything that’s not given to you. And the only thing that you leave behind is footprints on the sand. That was the impact that it left with me, that this small country is very, very honoured to protect its natural resources.

We shot a documentary of Palau that was released at COP28 in Dubai last year, which kind of helped a whole lot more people to understand the value of the work that Palau was doing, and increased exposure for them.

We’re speaking to them about a whole range of ocean conservation related stuff. And a lot of this is now going to come with a sovereign guarantee or a sovereign backing, which means that the quality of the carbon goods that comes out from Palau is going to be worth a lot more.

Han: So I understand the importance of storytelling and market perception. But we’re talking about the phoenix model as something that is concrete and measurable. It’s very easy to measure a unicorn on a balance sheet, it’s just profit and loss. But how do you translate the concept of a phoenix into a balance sheet?

Somosundrum: This is where we see carbon credits coming in. There’s book value associated with it because it’s a speculative asset. Eventually there’s also going to be biodiversity credits where the work that you’re doing is measured not just about the carbon sequestration but also the impact that you’re delivering to the ecosystem. This impact on means indigenous species, indigenous people living there, and the value that we’re creating in terms of jobs in wildlife protection.

A lot of this is soon going to be recognized on the books because carbon credits will now have a value. It’s going to be traded in an open market. It’s going to be traded on an exchange. And companies will now look to acquire these things to offset their carbon footprint.

Through this there’s going to be a new economic layer that’s going to be created.

Han: To summarise, are you basically saying that carbon credits will be sort of a proxy for impact on the balance sheet?

Somosundrum: Especially now that carbon tax is going to become mandatory. It’s going to be a key part of a balance sheet discussion. You know at the end of the day, we still encourage companies to first look at their supply chain and find ways to reduce their footprint.

But for whatever that they can’t, they will need to buy and offset their carbon footprint.

And that’s where carbon credits become an asset class that a lot more people are actually going to participate in. I don’t think it’s going to hit retail very soon. But eventually it’s going to be the case when even retail will start getting a lot more conscious and start maybe offsetting their air travel so that they become carbon neutral personally.

Han: Traditionally for a carbon credit project to get off the ground to get a Verra credit, you need a lot of money about capital and a large part of the $30 carbon credit that you’re buying goes to the certification process. So what’s your take on that?

(Read this interview with Dr Lahiru Wijedasa from BirdLife International for details on costing to issue Verra carbon credits. Verra is the dominant carbon credit standard globally)

Somosundrum: For impact to happen at scale, we cannot expect every single project to issue a Verra credit. When we looked at the Verra certification process and the entire ecosystem, one of the most shocking things that we discovered was that everything is being done analog. This was based on two partners that we actually visited in Indonesia.

That’s when we felt that this entire space is ready for disruption because we saw the advent of AI and digital MRV solutions plus blockchain. There’s even scope for predictive technologies to show that there’s potential for desertification or encroachment.

Unfortunately, a lot of the current buyers today still have a bias towards Verra and Gold Standard. It’s going to take some time, but we feel that the blockchain powered ecosystems are eventually going to win. And that’s what we’re trying to do, investing, incubating, and also accelerating.

Han: Are you going to make your own standard or use something that’s already out there?

Somosundrum: Yeah, definitely not. We see ourselves more as a consolidator, working with the best practices out there, making it very inclusive, and also offering it to project developers as a one-stop solution. They come to us and we introduce them to the right verification company, the right digital MRV solution.

Where we want to be focused on is the crowdfunding aspect. A lot of these project developers that we meet struggle with upfront funding. They’ve got their own challenges and they have to pay anything from $60,000 to $200,000 to Verra to get certified so they can generate carbon credits after two years. It’s a big challenge.

But this is where we bring in investors who either provide advanced financing, the guys that are creating futures contracts, and introduce the technological innovation that is coming into this space.

Audience: Do you have an idea of the top three problems that you think the developers should tackle in Southeast Asia?

I think carbon is definitely one tier, we’ve been looking at biochar. Circular economy is another big area of interest for us. We’ve also been speaking to people who are looking at improving the quality of the soil.

But in the end, Southeast Asia is where some of the biggest carbon sinks are available. Indonesia is one of the biggest, and holds 30 % of the world’s carbon reserves. Finding ways to protect some of that with nature-based solutions is a great proposition–there’s a whole lot of money to be made there.

Of course, the challenge will be in ascertaining additionality when creating these carbon assets. But there’s a whole lot of other new methodologies that are coming up and we feel that we’re sitting on a green goal mine.

Are there any learnings from Enjinstarter that you could apply to AYA Foundation?

From an Enjinstarter perspective it’s a full-on bull market now. The fact that Bitcoin hit $50,000 during Chinese New Year is a big sign for us. I’ve been in this space since 2014 and every year between January and February, Bitcoin would drop, because the Chinese would sell. Then after Chinese New Year the Chinese would come back and buy.

But this was the first time in a long time that we saw Bitcoin really running up while the Chinese were still in their Golden Week. And this all started because Bitcoin ETFs got approved in January. Once Bitcoin does well, all the other coins will do well.

One of the big narratives that we’ve been investing in for a long time has been gaming, and bringing gamification into the real world impact space.

Here’s an example. Today, there are no real incentives for us to recycle.

One of the first companies that we’re incubating under AYA is called UCO. It’s a UAE-based company run by Europeans, but their main focus is Southeast Asia. UCO operates in rural markets and incentivises youth to collect used cooking oil by rewarding them with tokens. It’s a model that provides employment.

UCO then consolidates this used cooking oil, and exports it to markets where there’s refining work that’s done. For example, biodiesel, there’s a whole range of that.

But there needs to be an incentive. If there’s no incentive, there’s no reason why these guys will do it. They’re probably going to be pouring that oil into the gutter. And this is where we feel a Web3 model solves that problem.

Follow ReFi Singapore and Regen Supply on LinkedIn for the latest updates.

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Shihan Fang

This is the official Medium page of Han. Follow the podcast on Spotify for more interviews with the people behind the latest climate innovations.