Everyone wants to get paid for doing nothing. Novel venture capital group Single Earth has found just the right way for property owners to do exactly that. And you don’t have to be a Wall Street hedge fund shorting stock or part of a Reddit investment mob to make it happen.
The goal: saving the planet.
The tool: blockchain, tokenization, and a stock exchange for natural value.
The result? The world’s first nature-backed financial instruments, according to CEO Merit Valdsalu.
“Single Earth is an online platform that enables forests, wetlands, and other natural resources to generate profit without being sold as raw materials … but instead as carbon offsets and biodiversity offsets,” Valdsalu told me recently on the TechFirst podcast. “We reward landowners for not clearcutting their forests and not digging up their wetlands … but instead, for preserving the ecosystems that actually keep all of us alive.”
As a concept, it’s simple. Single Earth tokenizes land, forests, swamps, and biodiversity: any area of rich ecological significance. Companies, organizations, and eventually individuals will be able to purchase those tokens and own fractional amounts of those lands and natural resources, getting carbon offsets in return as well as ongoing ownership rights.
And land owners get paid for … doing nothing to their land.
“Single Earth is not a fund itself,” chief technical officer Andrus Aaslaid told me. “We are not trying to become the largest landowner in the world. We are trying to provide the technology that people who own the land would be able to create profit out of it without having to sell it as raw material.”
The interesting thing about the Single Earth token is nature-backed. It has real assets in the real world with real value behind it.
In some sense, that’s like gold: also a real, physical, inherently valuable store of wealth.
In a very real sense, it’s more legitimate than most cryptocurrencies like Bitcoin, which simply have value due to scarcity and demand. (Take away demand for Bitcoin, and you have a string of numbers. Scarcity only matters when you add desire.) In yet another sense, it’s also more legitimate than fiat currency like the US dollar or the Euro, which are also, on a higher level, collective fictions that store value. (Although those state currencies are, of course, also backed by nations or groups of nations.)
Hear the full interview in TechFirst:
Nature, Single Earth says, is the new gold.
But it’s not very liquid. Or portable. Or dividable and tradeable.
So Valdsalu and Aaslaid are hoping that tokenizing nature will help us recognize that inherent value. And … make it tradeable. In other words, usable in a private capitalistic economy.
“With nature … nobody wants to buy it because if there is a precious animal living in it, it’s worthless,” Valdsalu says. “I can’t cut it down. I can’t dig it up. I can’t do anything with that.”
Single Earth has raised a first fund of $3.9 million from the founders of European software unicorn Pipedrive, a CRM startup. According to Valdsalu, Pipedrive founders Ragnar Sass, Martin Tajur, and Martin Henk were looking to invest some of their wealth not just in banks and the stock market, but in biodiversity and natural resources. Single Earth was the solution, and a $10 million fund is the startup’s next milestone.
The process is fairly straightforward:
- Owners enter their land into the Single Earth marketplace
- Single Earth sends biologists out to assess the ecological value of the land
- Single Earth tokenizes the property
- Investors buy those tokens, getting carbon offset credits
- Those investors now legally own a percentage of that land
- The tokens generate profits through carbon offsets, but can also increase or decrease in value over time and be traded like any other commodity
- Single Earth monitors the land via satellite, air quality sensors, and more to ensure the value of the investment is maintained
“As a forest owner, you will know how much timber there is in a forest, but you wouldn’t know how much carbon is sequestered,” Valdsalu says. “You don’t know the exact biodiversity value that it has … so we first calculate the ecological value of a forest, and then we tokenize this value. And basically what we can do with that is we can emit a new token for every CO2 ton sequestered in a specific forest. And that’s how technology helps us to bring this ecological value to the world, to make it tradable.”
Currently, Single Earth is focused on Europe and forests: areas close to home and ecologies the startup knows how to value. Other regions and other ecologies will come in the future as the company expands.
Their plans are not small.
“Our end goal is to pave the way to nature-backed banking, because that’s the way how we can integrate nature preservation into our everyday life so that the economy would support the preservation of nature,” Valdsalu says. “And that’s the only way that it can actually work.”
I asked her if ultimately that means tokenizing the whole planet, and she answered with a single word.
I’m not sure if it’s sad that we can’t value nature unless we can extract things from it, or if it’s wonderful that we can value nature in a capitalist economy by assigning value to it. Either way, however, anything that helps save biodiversity and natural plant and animal has to have some value to it.