An intriguing proposal that has made its way onto Cardano’s Ideascale platform is Ekofolio, a crypto Stablecoin looking to migrate from Ethereum to Cardano. The aim is to implement a sustainable stablecoin use case that is closely tied with the environment. With a vision of frictionless issuance and trade of Stablecoins, Ekofolio seeks to create a better world, along with a better marketplace for Stablecoins.
So what exactly is Ekofolio, tokenomics, and why is there a need to shift from ETH to Cardano?
What is Ekofolio?
Established in 2017, Ekofolio aims to fight climate change while simultaneously creating a marketplace that uses tokenized natural capital assets. The tokens would be traded easily with the help of blockchain technology.
The aim is to lower entry barriers and increase liquidity, which could attract more capital to asset classes like sustainable forests. It would also take steps to combat the loss of forests globally by reforestation of degraded lands like brownfield.
With a common goal to bridge the gap between early adopters and simultaneously make the technology a piece of common knowledge, the Ekofolio site accepts fiats and issues tokens.
In 2019, Ekofolio began building the proof of concept with a significant amount of research and building out the token structure. The project was also the recipient of a grant from the European Space Agency for funding satellite monitoring and reporting of forests, further solidifying Ekofolio had found cause worth growing and building on blockchain and in crypto the marketplace.
Cardano Foundation Stamp of Approval
Ekofolio seems to be working with the Cardano Foundation for their Project Catalyst Fund 4 proposal. On March 23rd, Jeremy Firster, a Project Manager from the Cardano Foundation, discussed in a tweet the Foundations involvement with Ekofolio migrating to the Cardano ecosystem. Firster stated:
“I was asked for an update. @ekofolio has been in discussion with Cardano Foundation for moving their assets from Ethereum to Cardano. This project is currently in Fund 4 #Catalyst and are awaiting more reviews. Top quality project that is brought to the community for feedback.”
Tokenomics of Ekofolio
Ekofolio identifies the best sustainable forests and then issues EKO tokens. These stablecoins are evaluated and backed by the intrinsic value of these forests. You can purchase EKOs starting at €200. You can also buy as many tokens as you want. Your EKO value grows at a steady 3 percent per annum and is powered by photosynthesis. You can hold your tokens for a long-term investment or sell before the trees mature, based on your choice.
This is done by maintaining relations with forest owners around the world, and forests can be existing ones or those that are planted. There are different types of forests too, and the value varies according to the type. Administrators manage forests that are purchased after they are placed in a Special Purpose Vehicle or SPV.
While the coins are initially valued at €1, the value rises to reflect the growth of the asset value, in this case, forests. The Net Asset Value will be periodically assessed and reported, and over ten years, Ekofolio makes the bold claim that EKOs could be worth 130 percent of the initial investment in the future. Additionally, you can also visit the forests in your portfolio; all you have to do is treat them with love and respect. Over time a lot of important decisions will be turned over to the community.
Sustainable forests are definitely a great investment and more stable and predictable than any other form of investment currently in practice.
Why Shift from Ethereum to Cardano?
With a huge boom in the crypto sphere, Ekofolio has realized that EKOs can be used as a hedge against the intense market volatility; the 3 percent growth rate is attractive and will bring in a lot of liquidity.
With the rapid rise in awareness, interest, and knowledge associated with blockchain and associated technology, the acceptance and familiarity associated with these crypto tokens is also on an all-time rise. This leads to a lot of transaction, and the current gas prices on Ethereum makes it impossible for Ekofolio’s current business model to sustain.
With around $600 billion worth of forests around the world, Ekofolio is focused on developing a long-term plan that can build a platform to help save these forests. The high gas costs of ETH might go against the very sustainable nature they stand for, which is why Ekofolio is looking to shift to Cardano.
There are many objectives behind this shift, the major ones behind this being:
- The need to accept major cryptos and off-ramp to Fiat for deployment to forests while keeping in mind the impacts of volatility in the market
- Issuing EKO equivalent to the final Fiat value obtained
- Issue EKO tokens on a chain built from scratch that can serve the high volumes of transaction
- Interoperability with other chains to aid in planting more trees, and
- Attract a good amount of participants by appealing to the blockchain community.
All this can be achieved by implementing Cardano integration to refine research, testing, dApp development, front-end, and community engagement.
Cardano integration will help Ekofolio move towards creating a sustainable world while creating a platform that helps combat climate change and does some good in the world. It will, therefore, create a greener way of investment while letting investors realize returns without having to wait for decades for decent profits.
If you’d like to know more information or have questions/comments regarding the Ekofolio proposal, check out the link provided: https://cardano.ideascale.com/a/dtd/342241-48088
