The blockchain industry is an eclectic space. While crypto-financial platforms heavily dominate the market, there are a few projects here and there that stand out from the bunch. At Unblock, we love seeing projects that use blockchain tech to improve the world we are living in. GainForest is one of these blockchain platforms that aim for better sustainability and use the properties of the immutable ledger to provide us with a better tomorrow.
In this GainForest review, we will try to demystify some of the innovative concepts of this up-and-coming environmental initiative. To this end, we explore the basics behind the GainForest idea, but will also delve deeper into token economics to assess the project’s viability.
What Is GainForest?
GainForest is a novel project that, in its own words, provides “smart contracts for our natural world”. While that’s all fine and dandy, what does it really mean? In a nutshell, GainForest aims to become the go-to platform that rewards investors who commit to long-term projects that conserve our natural habitat. To achieve this, it runs smart contracts on the Ethereum network that channel donations in cryptocurrency from donors to communities.
More precisely, it provides a tokenized platform of rewards by measuring the investor’s participation in an efficient, transparent, and fair manner. Thanks to blockchain and smart contracts, GainForest redistributes donations and tracks the progress of communities, helping them make a difference where it really matters. And last but not least, it uses NFTs to achieve its goal!
Who Created GainForest?
GainForest was founded in 2017 by David Dao, a Swiss-based AI researcher. His project is a non-profit grantee of Microsoft’s AI for Earth program, which leverages decentralized technology to prevent deforestation. Consequently, the GainForest team has worked in close collaboration with the World Wildlife Fund (WWF), MIT, and Restor to develop satellite-based monitoring algorithms to predict deforestation.
Currently, keeping track of carbon-efficient efforts is a bureaucratic mess. Red tape barriers are everywhere in all the steps of the donation process. This removes all incentives from willing contributors to participate in reforestation and protection efforts.
Traditional donations require mutual trust from all parties involved. First, donors need to believe that their donations go to the intended cause. Communities, on the other hand, face the challenge of attracting donators. They need to go through expensive marketing, studies, data collection, etc to reach out to investors. And finally, there’s the need for the middlemen, usually represented by financial institutions, that creates even more friction in the process. This results in an extremely lengthy and expensive process. A lot of the funds that should go towards sustainability efforts are spent hopping over these bureaucratic hurdles.
The team behind GainForest believes firmly that blockchain tech can solve these issues. More specifically, they want to achieve this by eliminating the middleman through smart contracts and increasing incentives with crypto-based rewards. Let’s continue this GainForest review by analyzing how this works.
A Blockchain for Saving Forests – How Does it Work?
Before we go on with this GainForest review, note that the platform is still in its conceptual form, and there are no practical applications of its use cases yet. However, we can still analyze the theory and tech to assess whether it’s a viable platform for supporting ethical sustainability efforts.
What are NFTrees?
GainForest relies on a concept called Non-fungible Tree Tokens or NFTrees. These unique digital assets are used to virtually represent the ownership of sites of a conservation or restoration project. Every NFTree holds a set of unique data, that can be tracked through satellite and updated in real-time.
This data includes vital information about the conservation site, including:
- Geospatial and ecological information.
- Current and potential tree cover.
- Which species of flora exists.
- How much carbon the current flora can store, or could potentially store if the ecosystem was intact, etc.
Satellites and IoT devices provide this data and that update the blockchain ledger continuously and on the fly. This provides full transparency of the sustainability efforts the community is making. Moreover, a unique artwork provided by local community artists will represent each NFTree. This immensely helps with marketing the project to NFT collectors and empowers local artists simultaneously.
By buying these NFTrees, investors can directly contribute to reforestation projects all around the world. More importantly, they can do this by directly giving funds to the concerned party, without having to go through a centralized donation service or having to rely on banks for money transfers. This way, the money goes where it’s really needed, instead of being wasted on needless administrative costs.
What is Proof-of-Care (PoC)?
The money used to buy NFTress goes into a collective donation fund handled by the smart contracts of GainForest. This Proof of Care (PoC) concept is the backbone of the platform and is essential for the fair distribution of funds.
PoC is a core element of GainForest’s smart contracts and acts as a list of milestones (e.g carbon stored, increase in tree coverage, etc.). Once a certain milestone is reached, the smart contracts release the funds from the decentralized donation pool to the communities. Consequently, this mechanism incentivizes the people working on the project to bring their efforts to fruition.
In addition to incentivizing projects with donation funds, relevant institutions can use PoC to track data and share them on a global level. In this case, blockchain technology allows the data to be used on an international level as proof of undertaken efforts to reduce the country’s carbon footprint.
The PoC system relies on outside oracle entities that verify the progress of the milestones. These blockchain-based entities are key to linking the external data from the IoT devices and satellites with the blockchain.
And finally, it’s worth noting that this process also mints governance tokens into the wallets of all of the NFTree holders. These allow them to vote on the further development of the platform. Furthermore, they act as monetary incentives, as these tokens can be exchanged on the free market for other crypto or locked for liquidity farming. In a nutshell, thanks to PoC, donators become investors.
GainForest Review – Cryptoeconomics for Nature Conservation
To provide continuous funding to the projects, GainForest employs two distinct mechanisms:
- Continuous auctions. Unlike other collectible NFTs on the crypto market, NFTrees remain on the open market indefinitely. Once the investor buys the NFTree, they need to immediately put it back on sale at a higher price, or pay the stewardship fee.
- Stewardship fee. On GainForest, assets belong to no one and everyone at the same time. This means that NFTree holders will pay a custodianship fee while in possession of the asset. This provides communities with sustainable and renewable funding.
A final footnote about the economics of the project is that the donated funds remain locked in DeFi-capable smart contracts. This means before they are released through PoC to the communities, they will yield returns to the project founders. This will provide the essential funding to the team for continuous development. Additionally, the platform uses this treasury to reward artists for their contribution of artworks for the NFTrees.
What Are the Benefits of GainForest?
So, to make this GainForest review even more relevant, let’s quickly summarize the pros and cons of this innovative blockchain project. Beginning with the advantages, we can state that GainForest:
- Adds transparency to the donation process regarding reforestation.
- Incentivizes donations by providing NFTree collectibles.
- Allows donations to become investments.
- Provides easily measurable data to track reforestation progress.
- Feeds communities with continuous funding to carry out their reforestation efforts.
- Empowers local artists and gives them an opportunity to participate in a lucrative, yet humanitarian platform.
- Uses blockchain for the greater good, instead of thinking of profit.
And yet, GainForest has quite a few drawbacks, that we hope to see polished out by the time the project goes live.
- The project is still in an early concept phase, and there hasn’t been any testable implementation of it just yet.
- The process of minting new tokens through PoC is still quite vague. Both the token economics and inflation rate are hence very difficult to assess.
- There’s very little information on who exactly is working on the project. In our investigation, we couldn’t manage to link any official team members to GainForest, apart from its founder.
- Other platforms are already using the term NFTrees, albeit in a different connotation than on GainForest. For instance, nftree.org is another blockchain project that uses NFTs for offsetting carbon footprints.
Concluding our GainForest Review
To conclude this GainForest review, we can say that we were pleasantly surprised by this innovative blockchain platform. If it manages to play its cards right, it could become quite successful. The premise is quite appealing, especially in this craze where investors are flocking to new NFT projects as soon as they see some potential.
Moreover, NFTrees are more than just collectibles in this case. GainForest manages to give its NFTs some purpose and creates a donation ecosystem for forest conservation. It utilizes blockchain for a more ethical goal than just making profits, which is a rare sight these days. It’s true that GainForest needs a lot of work before we can see its practical applications. Nevertheless, it remains a great concept that could become a significant platform for reforestation incentives and the tracking thereof.