As little as $300: That’s the cost of buying one hectare of virgin rainforest in Paraguay, thereby protecting it from being cut down, bulldozed and turned into a cattle ranch.
Raising cryptocurrency donations to purchase forest from landowners, enlarging national parks and preventing deforestation is the goal of GainForest. The project combines blockchain-based smart contracts with satellite imagery, drone photography and data science, and has steadily grown since winning the United Nations COP 23 Hack4Climate contest back in 2017.
It makes GainForest the first government-backed green crypto project, according to GainForest co-founder David Dao. The initial results will be presented at the UN COP27 in Egypt, he added.
Crypto for good
Most people are aware of the alarming rate of deforestation happening across the globe. Each year, the acreage of rainforests that is destroyed absorbs almost the equivalent of the annual carbon emissions of a large, industrialized nation like the U.S. or China.
However, the cost of stopping deforestation, particularly in places like Paraguay where land was sold in the 1980s for as little as $20 per hectare, remains “insanely cheap,” said Dao.
“The price for one hectare of virgin forest land is now between $300 and $500,” said Dao in an interview with CoinDesk. “In order to create a cattle farm you need to build infrastructure, so the upfront costs for the landowner could easily be another $1,000 per hectare. So, we’re trying to reach them the moment before they decide to build a cattle ranch, and say, ‘Hey, this $1,000 is not worth the investment; Paraguay can do better.’”
Dao and his partners, whose backgrounds are in artificial intelligence, are using the Solana blockchain (for its low-carbon footprint) to lock up crypto donations that are tied to highly accurate satellite and drone data charting areas of forest. Decentralized data storage is done via the Filecoin Green project. Those who donate receive data drops, wildlife camera pictures and can be connected to indigenous tribes, all in the form of non-fungible tokens (NFTs), dubbed “NFTrees.”
The detailed algorithmic mapping of what’s happening in each forest project removes the uncertainty associated with traditional carbon offsetting; the latter usually involves planting trees somewhere, but tends to leave those who donate only guessing the exact impact of their green investment.
If GainForest can’t buy a piece of land, the alternative is creating a legal contract such that the landowner is paid over time providing they don’t deforest, said Dao. Several studies estimate that giving out between $1 billion and $2 billion per year could halt deforestation globally, he pointed out.
“Deforestation could be stopped from today in just two years, we just need enough money,” said Dao. “People need opportunities that make forest conservation financially sustainable. To do so can reduce global temperature up to 0.2 Celsius would give us valuable years to figure out how we can decarbonize society. And we need those years.”
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