Zero Carbon Project inspired by Ethereum Blockchain smart contracts
Zero Carbon Project was inspired by the revolutionary innovation of Ethereum blockchain’s smart contracts. We were excited by the prospect of being able to use smart contracts to leverage a new source of value by tokenising the future utility value of a service.
We have used smart contracts to design an Energis token economy which captures the future utility value provided by our Zero Carbon Market service. We use these valuable Energis token as a meaningful reward for our consumers to switch to zero carbon energy acting as a catalyst to tackle climate change. The economic interests of individuals are aligned with societal goals and with inter-generational interests.
Smart contracts are used to tokenise the future value by creating a ‘trustless’ arrangement which does not require trust between parties now or in the future. The trustless nature of smart contracts come from their qualities of immutability, transparency and security. Immutability is achieved by deploying code on the blockchain so that it can never be changed. The contract is transparent as anyone can review the code to understand the rules. Security is underpinned by cryptography.
Something special and revolutionary is created by combing these smart contracts with digital currencies underpinned by the distributed ledger and cryptography.
Energis token economics
The Energis token economics have been devised so that energy suppliers who win consumers through the Zero Carbon Market must pay transaction fees using Energis tokens. Up to 70% of these are then recycled as rewards to our consumers for switching to zero carbon energy. Consumers or Energis owners can sell their tokens to energy suppliers who must purchase them to pay the Market transaction fees. As the consumer base increases, the internal demand for Energis tokens increases, constrained by a fixed supply, thereby driving value into the Energis token.
Energis token sellers determine a fair offer price by assessing the future number of consumers using the Zero Carbon Market and the utility value (or benefit) they will derive. This forward-looking assessment is no doubt subjective, but the wisdom of crowds can have the effect of determining optimal value. Sellers will compete to offer their Energis tokens at their preferred price and energy suppliers will pay because they are not exposed to higher prices. Energy suppliers are not exposed because their transaction fees are charged using USD0.01/kWh, so at higher prices they can buy less Energis tokens to cover the transaction fee.
Energy suppliers are not exposed to the competitive valuation dynamics which are driven by game theory between the sellers and owners of Energis tokens. If an Energis token owner sells at an unreasonably high price, then the other Energis token owners’ value is diluted. So, in theory the other Energis token owners have an economic incentive to undercut this high offer price, until an equilibrium fair token price is reached.
This is the Energis economy and this is how the future utility value of a service can be tokenised.
Energis smart contract infrastructure
The Energis token economy is enabled by three smart contracts. The first smart contract will be deployed on the blockchain to receive transaction fees as Energis tokens. The contract then recycles up to 70% of the transaction fees back to consumers through a reward pool. The remaining tokens are sent to a payments contract.
The second smart contract is the reward pool which is a simple contract that stores the Energis tokens securely. This is set up initially with 72 million Energis tokens (30% of the total) and will be topped up with its share of the Energis tokens received as transaction fees.
The third smart contract will be deployed with the code required to distribute the rewards to consumers’ wallet addresses, based on the reward rules detailed in Section 8 the Whitepaper www.zerocarbonproject.com/white-paper/ .
Utility tokens versus Equity
For private investors looking to purchase utility tokens as a form of investment, it is interesting to compare their choice to an investment in equities. The value of both forms of investment will primarily be determined by the expected number of customers in the future, which will always be uncertain. Never the less, the market will reach a consensus through the wisdom of crowds.
With equity, the value release mechanism is through residual cashflows, so todays value will be determined based on the net present value of expected future cashflows. With tokens, however, the value release mechanism will be the utility received by all customers, as they will pay for tokens up to this value, in order to use the service.
With equity a successful start up business may take several years to reach a liquidity event for an investor to exit. With utility tokens, however, there is deep liquidity available immediately due to the constant global market for utility tokens across crypto exchanges. Tokens can also be used to purchase the service being offered.
