In a setback for WeWork co-founder Adam Neumann’s latest venture, Flowcarbon, the climate-focused startup is refunding investors after failing to launch its Goddess Nature Token (GNT).
The company cited unfavorable market conditions and regulatory challenges as the main reasons behind the decision.
Flowcarbon had initially aimed to create a blockchain-based platform for carbon credits, but the project has been put on hold as the company reconsiders its strategy in the evolving carbon finance sector.
Flowcarbon’s $70 million ambition
Founded in 2022, Flowcarbon set out to transform the carbon credit market by tokenizing carbon credits on the blockchain.
The startup raised $70 million from investors, including Andreessen Horowitz, to create greater transparency and accessibility in the market.
A significant portion of that funding—at least $38 million—was raised through the sale of its native cryptocurrency, the Goddess Nature Token (GNT), which was designed to be backed 1:1 by carbon credits.
Carbon credits, which allow companies to offset their greenhouse gas emissions, are becoming increasingly valuable as global efforts to achieve carbon neutrality intensify.
Flowcarbon sought to capitalize on this by revolutionizing how credits are bought and sold, but regulatory hurdles and market volatility have forced the company to pivot.
Carbon credit market’s growing value
The carbon credit market has experienced rapid growth, surpassing $330 billion in 2022, driven by nations’ commitments to reducing carbon emissions.
Each carbon credit represents one metric ton of carbon dioxide removed from the atmosphere, and the credits are usually sold by project owners or brokers.
Flowcarbon’s approach aimed to tokenize these credits, streamlining the process and enhancing market transparency.
However, resistance from carbon registries and unfavorable crypto market conditions caused the company to halt its token launch.
Flowcarbon’s decision to refund GNT holders follows increasing resistance from carbon registries and a downturn in the cryptocurrency market.
According to a Forbes report, the company has been reaching out to investors, offering refunds in light of these challenges.
CEO Dana Gibber stated that the launch was paused to allow the market to stabilize and to address concerns raised by major carbon registries regarding the tokenization of credits.
Blockchain’s role in carbon credit transparency
Despite Flowcarbon’s setback, the potential for blockchain technology to transform carbon markets remains significant.
Tokenizing carbon credits promises to bring much-needed transparency to a market often criticized for its opacity and lack of accessible data.
Flowcarbon was not the only player in this space—other companies, such as Neutral and DLT Finance, have already launched regulated blockchain-based platforms for carbon credits, highlighting the growing interest in the intersection of blockchain and carbon finance.
Flowcarbon’s uncertain future in carbon finance
As Flowcarbon continues to refund its investors, the future of the company’s role in carbon finance remains unclear.
Although the startup has faced challenges, it still sees potential in combining blockchain with carbon credit trading.
With the global push for carbon offsetting continuing to grow, Flowcarbon may yet find a way to contribute to the market’s future, despite the regulatory and market obstacles it faces.
The company’s pivot will be closely watched as it navigates the regulatory landscape and seeks to achieve its long-term vision of transforming carbon credit markets with blockchain technology.
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