Today, as part of our presence at Davos, we’re excited to share that Solid World is launching on mainnet in late 2023 to enable carbon forwarding on Hedera, in turn helping us scale the Voluntary Carbon Markets (VCMs) and accelerate the growth of carbon projects.
One of the biggest challenges currently facing VCMs is that it can take carbon projects up to 5–10 years to actually get certified and generate revenue. During this time, projects need to spend capital to run operations. Alongside this, there are risks that a project may fail and be unable to deliver the credits. These risks need to be assessed, and it is easier to determine that a project will succeed as it gets closer to completion.
Solid World solves these funding problems by providing risk analysis for new carbon projects as a public good and helping projects that meet their standards receive funding. Solid World also enables institutions to scale their carbon financing through diversified and lower-risk carbon financing pools.
Leveraging the highly scalable carbon-negative Hedera network, Solid World is providing the infrastructure that will make it possible to issue and trade forward carbon credits in a public market that is fully transparent with clear price signals.
Carbon forwards are financial instruments that allow a buyer to lock in the price of carbon credits at a future date. They are typically used by project developers in the carbon market as a way to hedge against price fluctuations and generate funding for their projects. Carbon forwards can also be purchased by financiers looking to make a profit by trading them over-the-counter (OTC).
The unique Web3 platform created by Solid World lowers risk in carbon financing through the creation of diversified carbon forward liquidity pools, in turn bringing a market price to different types of carbon projects for the first time. This means that blue carbon projects that enhance the ability of coastal and marine ecosystems and other project categories like agriculture and reforestation projects will each be in their own individual pools with their own prices.
By leveraging the Hedera Guardian dMRV framework, these liquidity pools will offer improved data auditability for project delivery, transparent prices, and deeper, 24/7 liquidity.
For the first time, investors and carbon projects will be able to look at the market rate to easily estimate what their forward credits should be worth. In addition to this increased transparency and price clarity, Solid World and the Hedera Guardian also make forward credits more liquid for investors, as they can buy or sell them at any time they want. These highly liquid pools are enabled by liquidity providers on automated market makers (AMMs).
Alongside this, this Web3 infrastructure enables composability, meaning that other Hedera ecosystem projects such as Evercity, which enable efficient digital issuance of carbon forwards, are able to build on top of the Solid World protocol and tap into its liquidity.
“We appreciate how The HBAR Foundation have made the planet a priority in the development of their network, committing to building out a fully featured ecosystem to transform sustainability markets. We look forward to working with a team that is at the forefront of the green Web3 movement.” Solid World Co-Founder Stenver Jerkku said.
About The HBAR Foundation
The HBAR Foundation supports the creation of Web3 communities built on the Hedera network, by empowering and funding the builders developing these communities. The Foundation’s six funds - focused on the Crypto Economy, Metaverse, Sustainability, Fintech, Privacy, and Female Founders - each support communities within those areas, and the interconnectedness enables applications to participate as part of a larger ecosystem.
The collective power of these funds enables entrepreneurs, developers, and enterprises of all sizes to tackle some of the world’s largest problems, and create and control their own economies, all built on the Hedera public network. Whether you’re building something new or migrating an existing EVM-based application and community, the HBAR Foundation is here to support you. For additional information, please visit https://hbarfoundation.org.
About Solid World DAO
Solid World is derisking climate financing by offering diversified ways to finance carbon projects. Carbon projects are used by corporates to reach net-zero emissions.
A big wave of sustainability commitments globally is driven by strong investor pressure. A growing number of companies like Google and Shell are looking to invest in carbon projects instead of buying and offsetting carbon credits. This allows them to reach net zero balance sheets without capital loss.
Solid World enables corporations and investors to scale their carbon investments to diversified and derisked carbon financing pools. It offers guaranteed delivery, transparent prices, 24/7 liquidity, and immediate buyers and sellers. Projects are subject to rigorous due diligence (ex-Bezero team) and are certified by reputed registries, including Verra.