Flowcarbon Refunds Investors After Canceling Token Launch

Flowcarbon, a blockchain-based carbon credit score platform co-founded by former WeWork CEO Adam Neumann, has begun refunding buyers following the failure to launch its anticipated “Goddess Nature Token” (GNT). The choice comes after greater than a yr of delays attributed to difficult market circumstances and resistance from carbon registries.

Challenges in Tokenization

Flowcarbon aimed to revolutionize the carbon credit score market by tokenizing carbon credit, making them extra accessible to a wider vary of buyers. Every GNT was designed to be backed 1:1 by carbon credit, which characterize a metric ton of carbon dioxide both faraway from or prevented from coming into the environment. Nonetheless, the venture confronted vital hurdles.

In November 2021, Verra, a number one carbon registry, cautioned towards tokenizing retired carbon credit on account of issues about double-counting the credit’ worth. This was adopted by Verra’s full ban on the tokenization of retired credit in Could 2022, a transfer geared toward stopping fraud and making certain environmental integrity. These regulatory challenges have had a chilling impact on Flowcarbon’s plans, contributing to the repeated delays of the GNT launch.

Market Situations and Investor Sentiment

The voluntary carbon market, which noticed substantial progress to roughly $2 billion in 2021, has been below scrutiny. Investigations into the standard of carbon credit revealed that some initiatives had exaggerated their environmental advantages, resulting in a decline within the worth of carbon credit. As launch dates for the GNT token continued to be postponed all through 2022, investor frustration mounted.

Flowcarbon had initially raised $70 million in funding, together with $38 million via the sale of its deliberate token, from high-profile buyers resembling Andreessen Horowitz, Basic Catalyst, and Samsung NEXT. Regardless of the preliminary enthusiasm, investor confidence waned as market volatility persevered.

Refund Course of Particulars

In latest weeks, Flowcarbon has quietly initiated the refund course of for GNT purchasers. A spokesperson for the corporate confirmed that refunds have been being issued below normal phrases on account of business delays. Buyers have been required to signal waivers of claims towards Flowcarbon and its associates, together with confidentiality agreements concerning the refund course of. This strategy has raised issues amongst some buyers, significantly given the venture’s high-profile nature.

Flowcarbon’s CEO, Dana Gibber, indicated that the corporate stays dedicated to its mission of integrating blockchain know-how with environmental sustainability, regardless of the setback with GNT. The corporate continues to discover alternatives throughout the carbon finance sector, though the specifics of its present initiatives are nonetheless unclear.

Future Outlook for Flowcarbon

Regardless of the challenges confronted by Flowcarbon, the broader carbon credit score market is predicted to expertise vital progress. Analysts at McKinsey forecast that demand for carbon credit may improve by an element of 15 or extra by 2030, doubtlessly reaching a market valuation of over $50 billion. Nonetheless, the difficulties encountered by Flowcarbon spotlight the complexities concerned in tokenizing carbon credit, with issues about regulatory uncertainties and market volatility remaining vital boundaries.

As of September 2024, the mixed market cap of power and environment-related tokens stands at roughly $186 million, with nearly all of this market dominated by Powerledger’s POWR and Vitality Internet’s EWT tokens.

Flowcarbon’s expertise serves as a cautionary story for different firms trying to navigate the intersection of blockchain know-how and environmental finance, underscoring the necessity for cautious consideration of regulatory frameworks and market dynamics.

Picture supply: Shutterstock