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From YouTube: FlowCarbon - Phil Fogel
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A
Good
morning,
everyone
how's
everyone
doing
good,
so
I'm
phil
fogle,
I'm
the
chief
blockchain
officer
or
chief
crypto
guy
for
fun
at
flow
carbon.
I've
been
in
the
blockchain
space
for
about
10
years
and
about
five
years
ago,
got
into
the
impact
in
blockchain
space
and
have
sort
of
never
looked
back
and
have
sort
of
gotten
deep
into
the
carbon
markets,
and
I'm
really
excited
to
tell
you
about
what
flow
carbon
is
building.
A
But
before
we
do
that,
just
a
very
quick.
I
think
at
this
point,
everyone
here
has
had
a
bunch
of
overviews
into
the
voluntary
carbon
market.
I
think
we
spend
a
lot
of
time
in
the
last
few
days
talking
about
carbon
and
where
carbon
fits
into
the
blockchain
space,
but
just
to
do
a
quick
refresh
for
those
who
haven't
seen
it.
I
always
start
every
presentation
with
the
question:
how
voluntary
is
the
voluntary
carbon
market
and
the
answer
that
we've
started
really
getting
to?
A
So
thousands
of
corporates
have
made
commitments
over
the
last
24
months
and
really
what's
ended
up
happening
is.
Is
that
you
see
you
know
a
tremendous
increase
in
the
buying
of
carbon
credits
and
companies
who
use
carbon
credits
and
nature-based
solutions.
Sorry
make
that
slide.
Go
interesting.
Okay,
anyway,
major
based
solutions
can
make
up
30
of
the
solution
to
the
volunteer
to
the
carbon
crisis
and
keeping
the
planet
cool
and
the
net
zero
commitments
that
companies
are
making.
Basically,
the
way
they
work.
Is
you
want
companies
to
reduce
their
emissions?
A
A
If
you
look
at
this
chart,
what
you're
seeing
is
the
path
to
net
zero
for
some
of
the
largest
companies
in
the
united
states
and
the
commitments
that
they've
made
to
get
there
and
how
they're
going
to
get
there,
and
so
it's
basically
over
the
course
of
several
decades
they're
going
to
reduce
their
emissions
down
to
zero.
And
then,
if
you
look
over
here,
the
way
that
that
actually
gets
achieved
is
the
gross
emissions
go
down.
But
offsetting
also
goes
down
as
well,
and
there
is
a
delta.
A
So,
as
I
said,
nature-based
solutions
can
be
about
30
of
the
solution
and
nature-based
solutions
come
from
a
whole
realm
of
different
things.
That,
basically,
are
credits
that
can
be
issued
today.
These
are
credits
that
we
know
how
to
create.
There
are
methodologies
that
are
that
exist
for
them
and
are
very
easy
to
sort
of
implement
across
the
globe
by
either
not
cutting
down
trees,
planting
nutrients,
regenerative
farming
practices
etc.
A
Expectation,
sorry,
so
how
do
they
get
created?
Nature-Based
solutions
get
created
by
projects
that
do
things
co2
gets
quantified
sort
of.
If
you
were
here
for
the
hedera
talk,
basically
the
same
way
that
they're
doing
everything
is
now
done
today
by
ngos,
then
those
project
components,
sell
the
credits
and
then
corporates
buy
them
to
retire
them.
A
You're
seeing
this
market,
which
was
a
300
million
dollar
market
a
few
years
ago,
increased
to
being
a
10
billion
dollar
market
today
on
its
way
to
being
hundred
billion
dollar
market
and
really
go
beyond
that
credits
in
the
nature
based
space
were
trading
at
three
four
five
bucks
a
little
over
a
year
ago,
they're
now
trading
at
anywhere
from
10
to
15,
to
20
a
credit,
and
those
numbers
are
going
to
continue
to
move
up
because,
especially
as
more
corporates
make
commitments
and
buy
more
offsets
and
the
supply
takes
more
time
to
come
online
right
think
about.
A
So
what
does
the
market
look
like
today?
The
challenge
is
that
the
market
is
severely
broken
for
buying
carbon
offsets
right
today.
If
you
want
to
buy
a
carbon
offset,
you
have
to
basically
go
from
the
producer
of
the
carbon
offset,
which
is
a
project
that
creates
them
to
the
environment,
to
corporate
you
basically
navigate
a
web
and
a
maze
of
consultants
and
brokers
and
non-standardized
contracts
and
lots
of
different,
fragmented
exchanges.
Almost
all
transactions
take
place
over
the
counter
and
it
takes
weeks
and
months
to
settle
transactions,
so
the
intermediaries
they.
Basically.
A
This
is
minimizing
cash
flows
to
projects
right
at
the
end
of
the
day.
The
projects
are
the
ones
that
are
most
mis-served
by
this
market,
because
they're,
the
ones
that
are
actually
getting
they're
selling
their
credits
much
cheaper
than
they
need
to
be
because
the
brokers
are
taking
a
big
spread.
On
top
of
it,
there's
no
price
transparency
because
of
the
otc
market.
No
one
really
knows
what
credits
are
trading
at,
and
so,
even
when
credits
do
trade
on
public
markets
or
are
reported,
it's
a
small
subset
of
what
actually
takes
place.
A
So
you
don't
know
when,
for
example,
microsoft
or
another
big
company
goes
out
and
buys
a
specific
project.
You
don't
actually
know
what
they
paid.
For
that
project,
and
so
the
market
has
no
way
of
validating
and
smaller
companies
have
no
way
of
knowing
what
the
true
price
is,
there's
no
access
for
retail
institutional
investors
and
even
small
and
medium-sized
businesses
are
often
cut
out
of
this
market
because
it's
so
complicated
to
work
on
this.
If
you
think
about
the
microsoft
microsoft
has
is
a
one
of
the
leaders
in
sustainability
and
but
in
offsetting.
A
Microsoft
has
a
team
of
over
40
people
that
buy
offsets
and
do
research
and
project
level
research
into
different
projects
that
do
offsetting
the
largest
issuer
of
carbon
credits.
Vera
an
ngo
has
less
staff
than
that,
and
so,
if
you
think
about
being
a
small
company
that
wants
to
do
this,
you
can't
go
and
afford
to
hire
a
team
of
even
one
or
two
people
to
do
this
kind
of
research.
A
So
what
is
the
solution
for
this
is
right
now
it
takes
weeks
to
months
to
buy
credits.
There's
counterparty
risk
along
the
way,
because
you
don't
know
who
you're
dealing
with
and
you're
dealing
with
non-standard
contracts.
We
bought
some
credits
the
other
day
that
we
actually
placed
the
order
to
buy
them
three
months
ago
and
just
received
the
paperwork
to
sign
off
on
it,
and
it
involved
two
count:
two
different
counterparties,
one
of
which
they
they
sent
the
contract
over
in
portuguese,
and
so
it
was
actually
a.
How
do
we
deal
with
that?
A
How
does
it
anyone
who's?
Not
a
specialist
in
this
market,
deal
with
contracts
like
that,
and
then
there
are
transaction
costs
that
are
really
high
developers,
there's
a
huge
broker
commissions,
and
so
the
process
that
we're
creating
is
to
basically
build
out
a
marketplace
and
to
build
out
an
infrastructure
layer
that
enables
marketplaces
to
bring
these
credits
online
onto
blockchain
and
to
basically
reduce
all
of
these
frictions.
A
So
how
do
we
do
this?
We
basically
create
a
system
that
treats
us
very
similar
to
the
way
circle
works
for
stable
dollars
right.
So
basically,
what
happens
is
we
have
an
open
protocol
whereby
projects
can
deposit
anyone
with
carbon
credits
can
deposit
their
carbon
credits
into
a
bankruptcy
remote
spv
that
bankruptcy,
remote
spv
will
then
issue
a
carbon
token
that
carbon
token
is
linked
back
directly
to
the
project
or
to
the
thing
that
you
just
deposited
the
way
that
this
works.
A
If
you
want
to
think
about
an
analogy,
is
it
works
the
same
way,
a
dry
cleaning
or
laundry
receipt
works?
When
you
drop
your
dry
cleaning
off,
they
give
you
a
little
slip
with
a
number
on
it
that
you
then
own,
and
that
basically
says
that
you
have
a
legal
right
to
go
pick
up
your
dry
cleaning,
but
you
can
also
pass
that
dry
cleaning
receipt
to
somebody
else
and
they
can
pick
up
that
exact
piece
of
dry
cleaning.
That
is
the
legal
structure
that
works
the
same
way
for
this
token.
A
So
when
you
have
the
token
you
have
a
claim
on
something
very
specific
when
you
have
the
project
specific
token,
but
then
we
go
one
step
further,
because
when
you
have
these
project
specific
tokens,
it's
very
difficult
still
to
find
price
discovery,
because
there
are
so
many
of
them
and
sometimes
the
volumes
are
very
limited.
And
so
you
don't
really
know
exactly
what
the
price
should
be
for
that
token.
A
So
what
we
do,
then,
is
we
create
bundle,
tokens
and
we'll
talk
about
our
first
bundle.
Token,
what
that
looks
like
in
a
minute,
but
those
bundle
tokens
basically
are
as
if
you
took
those
dry-cleaning
receipts
that
you
were
just
issued
and
you
stick
them
into
a
gumball
machine
and
you're
issued
a
token
that
you
can
then
use
to
put
into
the
gumball
machine
and
crank
it
and
get
something
back
out.
But
it's
not
something
specific.
A
However,
you
can
always
take
the
bundle
token
and
use
it
for
its
utility,
which
is
to
retire
it
basically
to
basically
claim
the
offset
or
you
can
redeem
it
and
go
back
off
chain
or
you
can
unwrap
it
and
you
can
actually
pay
a
fee
to
basically
open
the
gumball
machine
up
at
the
top.
Stick
your
hand
in
and
pick
out
the
exact
dry
cleaning
receipt
that
you
want
to
take
out
of
the
gumball
machine.
A
So
the
benefit
of
all
of
this
is:
it
creates
two
points
of
arbitrage
on
chain
right.
This
is
what
we
call
a
two-way
bridge
and
the
two-way
bridge
basically
creates
market
efficiency
between
the
on-chain
and
off-chain
market
for
carbon
credits.
I
think
at
this
point
everyone
here
probably
believes
that
all
carbon
should
trade
on
chain,
but
that's
not
that's,
going
to
take
a
whole,
that's
going
to
take
a
while
before
that
actually
ends
up
happening.
A
So
in
the
meantime,
we
have
to
create
a
system
where
the
on-chain
and
off-chain
markets
can
interact
together
and
create
efficiency
and
price
discovery,
and
because
you
can
bring
credits
on
chain
and
then
take
them
back
off
chain.
You
create
these
arbitrage
opportunities
that
will
keep
the
price
relatively
stable.
A
So
how
does
it
work
if,
back
as
I
said,
all
the
our
credits
are
backed
one
for
one
with
actual
carbon
credits.
They
are
live,
unretired
credits
and
they're
deposited
into
this
bankruptcy,
remote
spv,
and
so
how
is
it
designed?
It
was
designed
specifically
for
investors
as
well
as
offsetters.
The
goal
of
the
gnt
design
is
that
it
has
a
five-year
rolling
shelf
life,
which
means
that
credits
can
be
deposited
into
it
from
the
last
five
years.
A
But
after
that
cutoff
point
you
can't
deposit
anymore,
meaning
that
at
the
end
of
this
year
you
could
no
longer
deposit
a
2017
credit
into
it.
You
can
only
deposit,
a
2018
credit
into
it
and
when
you
retire
the
credits,
it
actually
retires,
the
oldest
vintage
out
first,
and
so
what
this
does
is.
It
creates
a
mechanism
where
you
can
lock
in
a
price
today
for
this
quality
of
credit
and
hold
it
for
a
period
of
time
and
offset
it
later.
A
This
also
works
really
well
for
the
investor
community
that
which
we're
trying
to
encourage
to
bring
capital
into
this
community
so
that
we
can
bring
send
money
directly
back
to
projects
because
remember
the
system
that
we're
designing
is
intended
to
push
as
much
money
to
projects
as
possible
and
so
the
more
capital
that
comes
into
the
system.
The
more
of
that
money
that
can
go
back
to
projects
because
projects
can
sell
their
credit,
sell
their
off
put
for
higher
prices
and
then
go
and
do
continue
to
do
more.
Planet-Saving
work
at
the
offsetter
level.
A
For
those
of
you
who
don't
know
what
how
a
forward
contract
works
is
when
a
project
is
closer
to
issuing
but
has
not
yet
issued
its
credits,
they
oftentimes
will
go
out
and
say
great.
I
want
to
sell
my
credits
now,
so
I
continue
to
fund
the
work
that
I
need
to
do
and
lock
in
a
price
today,
and
so
what
we
do
is
we
go
out.
A
We
buy
a
pool
of
these
contracts
that
are
basically
promises
to
deliver
credits
later
at
a
fixed
price
or
an
agreed
upon
price,
and
we
put
them
into
a
pool
and
we
tranched
them
and
what
the
tranching
does
is.
It
basically
allows
different
sets
of
investors
to
come
into
the
product,
come
into
the
investment
with
different
layers
of
risk.
So
at
the
top
of
the
stack
is
a
senior
and
that
senior
is
basically
paid
a
fixed
rate
of
return.
You
can
think
of
it
almost
like
they're
issuing
a
bond.
A
They
pay
they're,
basically
buying
the
debt
of
this
pool,
and
then
there's
a
junior
and
the
junior
has
equity-like
characteristics
so
that
they
actually
can
have
potentially
much
higher
upside,
but
the
junior
will
always
eat
the
first
losses
so
that
if,
for
some
reason
the
credits,
don't
issue
or
the
carbon
markets
go
down
and
you
don't
get
as
much
money
out
of
the
carbon
credits,
as
you
thought
you
would.
The
senior
is
protected
and
gets
their
rate
of
return
before
the
junior
gets
paid.
A
Anything
and
all
of
this
is
done
on
change
using
a
protocol
called
centrifuge
that
basically
automates
the
waterfall
of
the
cash
flows,
so
that
there's
absolute
protection
for
the
investors
that
when
the
cash
is
distributed,
it's
distributed
correctly
to
the
different
tranches
in
the
pools,
and
so
this
is
actually
a
relatively
large
innovation.
Because
this
does
not
this
kind
of
project.
Finance
does
not
exist
today
for
carbon
projects
in
any
capacity
right
now.
A
The
senior
tranche
of
this
is
actually
a
very
good
investment
for
stable
coins,
and
so
we
are
working
with
the
likes
of
maker,
dow,
the
cello
reserve
and
lots
of
other
stable
coin
issuers
to
talk
about
how
they
can
take
the
senior
tranche,
lend
against
it
and
put
it
into
their
reserves,
put
it
onto
their
balance
sheet
as
a
senior
asset.
That
is
a
very
good,
stable
asset
that
they
can
earn
a
yield
on.