Climate tech company Flowcarbon and lending protocol Moola Market have joined forces to, for the first time ever, provide carbon credits with financial utility.
What this means is that holders of Flowcarbon’s carbon credit-backed token will now enjoy access to yield and credit until the associated carbon credit is retired.
This utility is not one that is currently available in the Voluntary Carbon Market.
In other words, holders will now have the opportunity to take advantage of permissionless financial tools.
These include borrowing, lending, and underwriting loans – all against the values of the carbon credits issued by Flowcarbon and without the need to deposit additional collateral.
In addition to lending and borrowing, holders will also have the opportunity to earn compound interest on their token in the form of additional GNT (the platform’s carbon-backed token).
As shared by Chief Blockchain Officer at Flowcarbon Phil Fogel, this will hopefully attract more funding into carbon projects and will help propel the voluntary carbon market forward.
One of the major setbacks in the way of scaling carbon projects that can offer carbon credits, which is a necessary means to curbing CO2 emissions, is difficulty accessing capital.
This new partnership between Flowcarbon and Moola Market and the use of the latter’s functionality might provide a solution to this issue.