Concept
The Goddess Nature Token (GNT) was the first bundle token of voluntary carbon standards issued by Flowcarbon. The issuance process can be attributed to Two-Way Bridge tokenization and included the following steps:
Minting GCO2 Tokens
The GCO2 token is an ERC-20-compatible token that represents the verified removal or reduction of one tonne of carbon dioxide equivalent. To mint GCO2 tokens, one must hold an account with a voluntary carbon credit registry and a Celo account connected to a compatible wallet. After submitting a tokenization request, Flowcarbon verifies the data with the registry and transfers the carbon credits to a bankruptcy-remote special purpose vehicle (SPV). A unique token is minted, detailing the specifics of the carbon credits—such as the project name, symbol, methodology, credit type, and vintage. The GCO2 tokens are then transferred to the original credit owner’s account.
Bundle GNT
Bundle GNTs can be created by depositing GCO2 tokens into a bundle contract. A one-to-one ratio applies—if 50 GCO2 tokens are deposited, 50 bundle tokens will be created. These bundle tokens can be withdrawn, retired, or redeemed at any time. The GNT bundle followed strict criteria:
- The project must adhere to a nature-based methodology.
- It must have a vintage period of five years, inclusive of the current year.
- It must be backed by credits from market-recognized standards.
At the time of issuing the GNT in May, 2022, Verra prohibitted creating, marketing, or transacting instruments related to Verified Carbon Units (VCUs) or instruments that have a VCU as their underlying asset (“related instruments”) without Verra’s express written consent. Similar prohibitions were imposed by Gold Standard, American Carbon Registry (ACR), and the Climate Action Reserve.
Blockchain Technologies
Flowcarbon aimed to use a decentralized application (dApp) for tokenization operations and process the transactions on the CELO blockchain.
Team, Investments, Marketing, and Community
Flowcarbon was co-founded by Adam Neumann, Rebekah Neumann, Dana Gibber (CEO), Phil Fogel, and Caroline Klatt.
In May 2022, Flowcarbon raised $32 million from venture capital firms and $38 million from the sale of its Goddess Nature Token (GNT). The funding round was led by a16z crypto, with participants including General Catalyst, Samsung Next, Invesco Private Capital, and others.
As of now, Flowcarbon is in the process of returning the $38 million raised from the GNT token sale.
Current Investment Attractiveness
GNT is not considered investment-attractive because it was initially sold to institutional investors and never entered the public market. Currently, the funds raised from the token are being returned to investors.
Areas for Improvement
There is very little information on how the GNT token was actually implemented. There is no public blockchain address where these tokens were issued, nor is there any information about the selected carbon standard.
Indeed, in 2022, carbon tokens were somewhat of a hype, although even then there were doubts about their applicability due to restrictions imposed by leading standards. There was hope, however, that a tokenization procedure would be developed, as the leading standards had initiated public consultations on the matter. But time has shown that these consultations did not progress further, and the price and demand for carbon credits dropped due to a series of scandals.
Therefore, it is understandable that the circumstances under which the funds for GNT were raised have changed significantly, leading Flowcarbon to make the decision to return the investors’ money.
