THE WORLD’S FIRST FULLY ON-CHAIN CARBON CREDIT PREPARES TO LAUNCH ON NEAR PROTOCOL
TL;DR Open Forest Protocol (OFP), one of the first projects to start building on NEAR Protocol back in 2020, is preparing to launch the world’s first on-chain carbon credit in the coming months. After years of research and development, OFP’s original validation and asset issuance system, is set to issue its first Afforestation / Reforestation carbon credit, from a carbon development project based out of Lithuania. This marks a fundamental upgrade for the Voluntary Carbon Market, and the value proposition of blockchain, as OFP pursues its mission of increasing supply of the often convoluted world of voluntary carbon credits.
With full data visibility into the uploaded data, verification by network validators, and the methodology used to issue the credit, OFP pioneers a novel approach to ‘upgrading’ the visibility and verifiability of what a carbon credit represents. A new era for carbon credits is poised for takeoff: OFP is opening the doors for any country, business, or entity to confidently and transparently tap into the world of carbon credits.
With more than 70 projects onboarded to the platform, and over 90 in the pipeline, on-chain carbon is gearing up for a big 2024 through Open Forest Protocol, powered by NEAR Protocol!
What are Carbon Credits?
Carbon credits, often seen as one of the most promising tools in the fight against climate change, offer a unique path towards sustainability. According to the Taskforce on Scaling Voluntary Carbon Markets and Mckinsey, demand for carbon credits could increase by a factor of 15 or more, with a projected $30-$50B market size by 2030. These tradable certificates represent reductions in greenhouse gas emissions and provide businesses and individuals with a chance to offset their carbon footprint after having reduced the maximum of their emissions. Each carbon credit represents a tradable certificate or permit that signifies the reduction or removal of one metric tonne of carbon dioxide (CO2) or an equivalent amount of other greenhouse gasses from the atmosphere.
Corporate sustainability has surged in recent years, with the number of companies committing to net zero emissions rising from 500 in 2019 to over 1400 in 2021. Major corporations such as Apple, Microsoft, Stripe, and Shopify and Nike have established intense carbon reduction goals, driving the rise of the voluntary carbon market.
Today’s Voluntary Carbon Markets have serious vulnerabilities that make them a liability in the fight for a green future. Existing carbon credits often grapple with issues related to transparency and credibility, which, in turn, undermine the trust and confidence of investors and projects alike. Navigating the market to identify reputable suppliers and projects that align with sustainability objectives poses additional challenges for buyers.
OFP aims to not only rectify the issues that the current state of carbon credits face, but to open the doors for any country, business, or entity to confidently and transparently tap into the world of carbon credits.
OFP Carbon Credit: Upgrading Quality and Verifiability in the Voluntary Carbon Market
OFP’s approach to carbon credits presents a unique opportunity to streamline the complicated process of carbon finance. Using a decentralized MRV (Measurement, Reporting, and Verification) architecture for carbon sequestration accounting, OFP offers a range of quality of life improvements to the process: All data is uploaded directly from the field, using a geo-located mobile app inside of specified sample plots. This data is then publicly validated by a network. Upon successful validation, data is processed through a public methodology from which assets are generated by the protocol which can be offset or sold directly on-chain without relying on intermediaries.
https://explorer.openforestprotocol.org/
https://explorer.openforestprotocol.org/
This process establishes the parameters for the world’s first ‘data backed carbon credit’: Once a credit has been created, all data pertaining to its measurement, verification, and methodology, are forever visible on-chain. From the moment the project starts, to the exact time from which the credit is offset.
When comparing OFP to legacy systems, there are significant advantages and improvements that organizations can benefit from. Here’s a breakdown of the key differences:
Importantly, OFP represents open-source infrastructure that is available for whitelabel by new entrants and legacy VCM players alike. While the first credits originate from OFP’s Novel Afforestation / Reforestation Vertical, any future white label provider can leverage the system for issuing ‘data-backed’ credits. This means, Mangroves, Agroforestry, Improved Forest Management, and even Urban Forest Credits, are not far off: A much needed upgrade for Voluntary Carbon Credits is well on its way.
Introducing Open Carbon Credits (OCC)
So what is an OCC? As a stand in for the Open Carbon Credit (OCC), it represents the quantified sequestration of carbon emissions achieved by projects that engage in effective carbon capture and storage initiatives. One OCC is equal to one tonne of carbon sequestered. Unlike traditional carbon credits, OCCs are natively created on-chain and offer greater transparency. The OCC’s inherent transparency guarantees its authenticity and reliability, as it is directly linked to the project’s performance data.
A Visual Representation of the OFP Validation Process.
Holders can view the credit’s project ID it was generated from, beyond the amount of quantified carbon emissions. OCCs can be traded on exchanges or used to offset carbon emissions, offering users a new way to participate in sustainability efforts.
An example of the OPN wallet holding OCC’s segregated by project. Notice the Offset function in the top bar of the wallet enables any holder of the OCC to offset their credits directly in the wallet.
What Does Moving Carbon On-Chain Really Mean? The Impact of the World’s First Data-Backed Carbon Credit
By providing a transparent, accessible, data-backed, and high-integrity solution, OFP upgrades what companies and governments can rely upon as a ‘quality carbon asset’. With blockchain guaranteeing the origination, verification, issuance, and offset of every environmental asset created on Open Forest Protocol, a new threshold for integrity has been created for the Voluntary Carbon Market (VCM). With more than 70 projects onboarded to the platform, and over 90 in the pipeline, on-chain carbon is gearing up for a big 2024 through Open Forest Protocol, on NEAR Protocol!
And while this is only beginning with Reforestation credits, OFP’s white label strategy allows for any legacy verifier, or disruptive startup to leverage the infrastructure for issuing their own asset. In a world where blockchain has traditionally been scorned as environmentally unfriendly, OFP’s first on-chain carbon credit, takes a first big step in greening the image of crypto, and demonstrating a powerful real world use case for the technology.
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