Natural Capital is an asset class that makes up the natural wealth that surrounds us, often encompassed in the form of tropical forests with vast timber, botanical, mineral, water and biodiversity value. Our global economic system prices the derivative components of this asset class in the form of extracted commodities (gold, coal, timber) or as a “converted asset” (forests converted to sugar, palm oil, cacao or coffee plantation). All of these have clear pricing mechanisms on commodity exchanges across the globe. As an aggregated asset class, however, standing Natural Capital cannot be easily bought or sold in the marketplace. We can buy its derivative processed commodities, but it’s virtually impossible to purchase Natural Capital in its totality. When otherwise potentially valuable assets lack a pricing mechanism, access or liquidity, they tend to be undervalued. Such is the case with Natural Capital, which is grossly undervalued and yet is a rapidly diminishing asset. We currently consume Natural Capital at a rate 1.7 times the Earth’s replacement capacity. That suggests that the convergence of the supply and demand curves are about to reach an inflection point that will dramatically change the pricing of Natural Capital. Its virtually unavoidable. Provided with a transparent pricing mechanism and liquidity, the enormous potential of Natural Capital as an asset class can be unlocked – and therefore preserved. TGR tokens provide that pricing mechanism and liquidity. Key Elements of the TGR Token:
- The TGR token is backed by a Verified Triple Gold REDD+ Considered the highest quality of environmental conservation credit, each REDD+ credit represents approximately 1m2 of high conservation value (HCV), high carbon stock (HCS), biodiverse tropical forest, 1 metric tonne of verified greenhouse gas emissions reductions, plus quantifiable positive social impacts against verified baselines.
Independent Certification & Registration
- The Triple Gold REDD+ Credits behind the TGR tokens are independently certified under one or more rigorous international standards:
- Verified Carbon Standard
- Climate, Community & Biodiversity Alliance Standard
- American Carbon Standard (ACR)
- ISO 14064-2
- Gold Standard
- Plan Vivo
- VER+ Standard
and registered with one or more of the following internationally recognized Registries:
- IHS Markit Registry
- ACR Registry
- APX Registry
- If token holders have an approved Registry account, TGR tokens may be exchanged for the underlying Triple Gold REDD+ Credits by sending them to a designated “burn address” that will have additional functionality allowing for instructions regarding the Registry account to which the underlying assets should be transferred. This will be carried individually upon request.
- Those token holders that do not have an approved Registry account, and wish to donate the credit to a charitable cause or to apply the credit to their personal environmental footprint, may instruct the Foundation to “retire” the credit on their behalf, by sending the TGR to a distinct “burn address” at which time the TGR will be burned. Tokens sent to this burn address will be accumulated and burned and the underlying credits will be retired in aggregate on a monthly basis.
- The supply of TGR tokens will both increase and decrease. As more Triple Gold environmental assets are acquired, more TGR asset backed tokens will be created. As these underlying assets are redeemed/consumed (usually by large corporations applying them to meet their carbon neutral and/or sustainability targets), TGR tokens will be burned.
- Consequently, TGR tokens will be authored under the ERC20 token standard with the additional functionality of increasing/decreasing supply under protocols consistent with documentation found in EIP621–https://github.com/ethereum/EIPs/pull/621.
- The Triple Gold REDD+ Credits behind the TGR tokens are independently certified under one or more rigorous international standards:
- TGR provide additional utility to the underlying Triple Gold REDD+ Credits by:
- providing a clear pricing mechanism for the Natural Capital represented by the Triple Gold REDD+ Credits which will result in additional liquidity and;
- facilitating the integration of the Natural Capital represented by the Triple Gold REDD+ Credits into corporate supply-chains as a tool for offsetting the embedded environmental impacts.
TGR Token Use
With a global consumption rate of natural resources nearly twice the production rate, no individual or company can reduce their environmental impact to zero. Therefore, the only way to for corporations to achieve truly sustainable-supply-chains is to embed environmental replacement costs into their current supply-chains as a means of mitigating those unavoidable impacts.
The environmental impacts of a candy bar, for example, are rather easy to measure. We have the protocols and methodologies for measuring the biomass loss and water sequestration capacity loss and greenhouse gas emissions resulting from the conversion of a biodiverse tropical forests into cacao, palm oil and sugar plantations. We even have the tools for replacing those losses. They come in the form of a special type of “environmental mitigation credit” called a REDD+ credit, which contains quantifiable greenhouse gas emissions reductions, and quantifiable biomass & biodiversity replacements and even quantifiable positive social impacts, all against measurable baselines. All of these belong to “Natural Capital” asset class.
But, these two disparate asset classes – commodities with adverse environmental impacts and natural capital assets – are immiscible, even though they share a common unit of measure.
In the example of the candy bar, a Food & Ag or Fast-Moving Consumer Goods company may purchase the palm oil from its subsidiary in Southeast Asia, the cacao from another subsidiary in Africa and the sugar from yet another subsidiary in Brazil.
If the company is truly committed to a sustainable supply chain, their finance department might likely purchase the environmental replacement offset credits from their headquarters in Europe. The commodities might then all be shipped to a factory in the U.S. So, linking and tracing all of these disparate commodities and environmental replacement offsets through a complex supply chain, across distinct financial boundaries (different balance sheets), becomes an administrative, accounting, technological, and cost prohibitive undertaking.
And that’s where blockchain technology and TGR tokens come in – providing the tools that facilitate true, sustainable-supply-chains. By onboarding these natural capital assets onto the blockchain, they can be embedded, transferred and traced through a complex supply chain more easily. And, as the commodities themselves become tokenized and more commodity settlements begin to take place on the blockchain, we will finally have a tool to emulsify commodities and their resulting environmental impacts with environmental replacements using quantifiable common units of measure.
The Veridium VRD Token
The Veridium Ecosystem will be deploying an additional smart contract on the Ethereum blockchain for the purpose of creating VRD Tokens (VRD) and will be delivering VRD at no cost to the Ethereum wallets of TGR holders who acquire TGR pursuant to the Distribution Terms and Conditions. VRD will be based on the ERC20 token standard and are intended to have the functionality set out in this Whitepaper. VRD are utility tokens to be used in the Veridium Ecosystem. VRD are neither securities or commodities.
At the time of distribution of TGR, each contributor who acquires TGR will receive 100 VRD for each TGR so acquired. The Veridium Ecosystem is providing VRD to the initial TGR holders at no cost to the TGR holders. The total number of VRD are fixed. After the VRD are delivered, no additional VRD will be created in the future.
Key Elements of VRD
In the event that in the future other types of environmental mitigation tokens (NatCap Tokens) are deployed on the Veridium Ecosystem, a certain percentage of such NatCap Tokens will be made available to holders of VRD will be given a first opportunity to acquire such NatCap Tokens in accordance with the distribution terms then applicable for such NatCap Tokens.
If and when NatCap Tokens are on boarded to the Veridium Ecosystem, up to 5% of the total number of such NatCap Tokens will be allocated by the Veridium Foundation to a VRD Exchange Pool for VRD holders. Once the price and distribution terms for a future NatCap Token have been determined, VRD holders will be given an opportunity to exchange VRD tokens for such NatCap Tokens. The number of NatCap Tokens delivered to each VRD holder participating in the exchange will be determined on a pro rata basis according to the aggregate number of VRD surrendered by all participating VRD holders according to the following formula:
Where NC = the total number of NatCap tokens placed in the Exchange Pool and V represents the VRD tokens surrendered by distinct VRD token holders.
- 600,000 NatCap Tokens are placed in Exchange Pool
- VRD Token Holder 1 surrenders 100,000 VRD
- VRD Token Holder 2 surrenders 200,000 VRD
- VRD Token Holder 3 surrenders 100,000 VRD
600,000 ÷ 400,000 = 1.5 NC/VRD
x 100,000 = 150,000 NC Tokens (for VRD Token Holder 1)
- VRD Token Holder 1 receives 25% of the pool or 150,000 NatCap tokens in exchange for 100,000 VRD tokens
- VRD Token Holder 2 receives 50% of the pool or 300,000 NatCap tokens in exchange for 200,000 VRD tokens
- VRD Token Holder 3 receives 25% of the pool or 150,000 NatCap tokens in exchange for 100,000 VRD tokens
VRD surrendered in the exchange will be burned resulting in a permanent reduction in the supply of VRD.
VRD Token Utility Example
Both the TGR and the VRD tokens are being authored by ConsenSys AG, the world’s largest blockchain design studio, and will be audited by the Hosho Group (www.hosho.io).
The Big Picture
By leveraging the full potential of blockchain technology, we can connect the dots along the full value-chain from our stores of natural capital to our retail stores. Only then will we have transitioned to a truly sustainable economy.
To put this in perspective, the aggregated supply-chains of the Fortune 500 have a value of approximately $10 trillion USD. Creating quantifiable, blockchain based sustainable-supply-chain-solutions based on quantified (tokenized) natural capital assets like the TGR, would create a conservation super-fund of $100 billion USD per year – a liquidity pool for Natural Capital many times greater than the aggregated annual budgets of all the world’s environmental groups combined.
Q: Will there be markets for TGR tokens beyond the Veridium Marketplace or the various crypto-exchanges?
A: Yes. For over a decade, the co-founders of Veridium have worked with some of the world’s largest corporations on environmental mitigation strategies and offsets. Veridium Labs Ltd will continue this work, specifically using Veridium’s tokenized environmental assets as the most effective and efficient tool for addressing these sustainable supply-chain demands.
Q: Will TGR and VRD tokens be traded on decentralized exchanges.
A: We are confident that, with the co-founding partners, many of whom were co-founders of Etherium, together with Brian Kelly, and our collaboration partners at ConsenSys, the Veridium tokens will be listed on major de-centralized exchanges in the near future.
Q: Are the underlying environmental assets (credits) 3rd party certified?
A: Yes. All TGR tokens are backed by a Triple Gold rated REDD+ credit, which has been verified by independent auditors to meet the Triple Gold rating under one or more international standards such as the VCS, ACR and ISO 14064-2. All TGR tokens, regardless of Standard must be additionally, CCB Triple Gold verified however.
Q: Can the TGR tokens be redeemed for the underlying environmental assets (credits)?
A: The underlying environmental assets are verified and conveyed in the form of the Triple Gold REDD+ credits. These credits may be redeemed by institutional buyers that hold an international Registry account such as the HIS Markit, APX or ACR Registries.
Veridium has exercised extreme legal diligence in the lead-up to our launch. This diligence includes significant expenditures with several law firms around the globe to evaluate the implications of our structure, token launch, and operations. In the United States, we have engaged Sullivan & Worcester. In Canada, where the Veridium Foundation is legally incorporated, we have engaged Blake, Cassels & Graydon. In Hong Kong, we have engaged TMF and Capital Solutions. Due to the retrospective nature of regulatory action, Veridium can make no guarantees regarding the legality of the Veridium Ecosystem or launch or of the TGR or VRD in any given jurisdiction. PLEASE SEE IMPORTANT INFORMATION FOR POTENTIAL CONTRIBUTORS AT THE END OF THIS WHITEPAPER.
Underlying Triple Gold REDD+ Credits: Contributors acquiring TGR are hereby notified that notwithstanding anything in this Whitepaper or the Distribution Terms and Conditions to the contrary, access to and use of the IHS Markit’s Registry (the “Registry”) in connection with any underlying Triple Gold REDD+ Credits shall be in accordance with the Registry terms and conditions. Potential TGR holders acknowledge that certain Triple Gold REDD+ Credits are provided through the Registry and in acquiring TGR will be required to agree to comply with any restriction or condition imposed by the Registry with respect to the Triple Gold REDD+ Credits. As part of such compliance, TGR holders may be required to enter into a separate agreement with IHS Markit in order to use the Registry. Registry restrictions are provided at: MER_Terms_and_Conditions_Account_Guidelines.pdf. Such Registry restrictions may be updated or revised from time to time by IHS Markit in its discretion.