Kolektivo
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Kolektivo

Converting Corporate Demand to Regenerative Finance

Modeling Ecological Token Potential with Curaçao’s Coral Reefs

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Together with Astral Protocol, Kolektivo is building an Impact Map to create a competitive yet common interface for green financiers to seek yield. Stakers will look for those territories where environmental asset revenues — conservation and regeneration based credits and offsets — are the most lucrative. The Impact Map’s grand vision is to become a Planetary staking layer for the Biosphere unlocking the USD trillions of value of all ecosystem services.
The planetary boundaries detailed by Rockström and Steffen (2009) remind us that excess carbon is only one of many other threats brought by the Anthropocene — threats which only a diversity of ecosystem services can adequately respond to. Source: Wikipedia

Kolektivo’s Ecological Token Thesis

Adapted from McKinsey Sustainability (2020)
  • On one hand, estimations around the value of the sum of planetary ecosystem services land in the trillions of dollars.
  • On the other hand, for most existing ecosystem service markets, prices are fixed by centralized actors. To make a long story short: a typical environmental credit or offset tends to be set and purchased at a certain fixed price, and does not float in an open market — i.e. there is no orderbook. There’s a lot of very good reasons for this, such as the huge diversity of offsets and credits that exist. With each environmental asset having its own unique vintage, it’s hard to design liquid markets capable of achieving price discovery for each individual asset.
The Kolektivo Framework ultimately aims to produce green money — money backed by the preservation and regeneration of the environment. But to do so, it needs to support the production of ecological assets — which we can think of as green collaterals that correspond to and back green money.

Staking for Environmental Assets: The Corporate Demand Funnel

Modeling the Impact

  1. For one year of protection of 1km² of coral reef in Curaçao, biodiversity credits are allocated in line with the principles of OpenEarth conservation credits. Note that these credits should reflect the richness of the biodiversity, number of marine habitats included, vulnerability, and endemism of the species..
  2. The credits are sold. It is difficult to estimate an exact price, but by looking at past or existing projects, we can provide a brief analogy. For example, in the case of Voluntary Biodiversity Credit in Columbia, each biodiversity credit — costing $30 — corresponds to 30 years of conservation for 10m² in the Bosque de Niebla forest (or simply: $1/year/10m²). If we apply this same valuation to our reefs, this amounts to $100k/year/km² for conserved coral reefs. (Note that in this step we do not apply any operations cost to credit/offset issuance, in order to keep our hypothetical scenario simple).
  3. Now, onwards to our staking model: assume 1 Reef Ecological Token (REF) is sharded per m² of reef — our 1km² area of ​​coral reefs amounts to 1m REF. Assume that 50% of the 1m REF are staked for one year, and that the other 50% are staked for 6 months.
  4. Credit revenues are redistributed to the stakers based on their conviction scores, or [quantity of Ecological Tokens staked x length of time staking]. The first cohort of stakers, who have staked 500k tokens for a year, enjoy 66% of the credit revenues, or $66,666; the second the remainder of rewards ($33,333).

Conclusion

Learn More …

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