Katalyst.Earth uses NFTs to fund carbon sequestration

Katalyst.Earth is a climate tech start-up using NFTs to fund carbon removal projects, with a plan to bring carbon credits on-chain.

Digital Nation Australia spoke to co-founder and CEO of Katalyst.Earth, Mitchell Board about the organisation’s business model and roadmap.

According to Board, “Our business is at the intersection of both digital and sustainable transformation. We’re actually building a two-sided blockchain-based marketplace that’s accelerating climate impact projects.”

The core purpose of the business is to reverse climate change through decarbonisation.

“The latest IPCC report (the Intergovernmental Panel for Climate Change) showed that we're going to overshoot the targets to avoid massive climatic impacts. We need to be removing at least 10 gigatons of carbon per annum and to be protecting the earth’s remaining ecosystems,” he said.

Katalyst.Earth is currently in phase 1 of its roadmap, undertaking its first pilot project.

“We're actually planting 5,000 trees on a farm and that's being funded through the sale of 100 NFTs. Those NFTs are actually the avatar type NFTs, which are called a PFP (Profile Picture),” he said.

In the second half of this year, the organisation will start phase two which calls on the business to partner with environmental project developers and fund their developments through NFT sales.

“They do things like plant trees or work with farmers to implement regenerative agricultural practices. So those are things that would capture more carbon in the soil, for example, these carbon sinks,” said Board.

“One of the major issues that these developers face, particularly the smaller and medium-size developers is access to financing, to capital to actually implement those projects. So what Katalyst.Earth is doing is raising funds from the sale of NFTs, providing people a stake in these projects, rewarding them for that stake through carbon credits and helping the environmental developers get over a major bottleneck, which is financing.”

The business expects to begin phase three next year, which is where they will bring carbon credits on-chain, in order to reward buyers of the NFTs with carbon credits generated through the projects.

“It'll actually really represent a stake in what we call a verified carbon project. So that's one where someone has gone in they've audited the project and they have said, ‘This is how many carbon credits can be generated because you have captured this much carbon through that project’. And that buyer, the owner of the NFT can actually trade, sell, or use their offset for a financial gain, for example, by selling it, they can sit on it for yield or they can use it to offset their own carbon footprint,” he said.