Carbon-linked crypto tokens may do more harm than good + Jack Dorsey’s NFT of his first Tweet has lost almost all of its value
With no regulations in sight, carbon-linked crypto tokens may do more harm than good: Crypto enthusiasts have attempted to bring the green revolution to the crypto market, converting carbon offset credits into digital tokens and selling them, the Financial Times, citing carbon analysts. These carbon-linked cryptos have soared from USD 4.65 per tonne to more than USD 14 between June 2021 and April this year. However, the increase in demand and price has led many crypto traders to find old carbon offset credits to buy and tokenize, many from before 2010. These are coined as “junk” credits by analysts who explain that they may not genuinely represent the carbon savings they promised. The two unregulated markets coming together may mean that users who wanted to use tokenized credits to offset their emissions might not have a way to validate the impacts of the projects they’re investing in.
The new cryptocurrency at the center of this trend: Klima is linked to the carbon offset market, whose (anonymous) founders believe it can help solve the climate crisis by driving up demand for offsets and therefore, the price of carbon. The price of Klima rose to a record high of more than USD 3.6k in October 2021 and now stands at around USD 20 this month. Klima has raised more than one question mark when it comes to its intentions, with analysts worried that the “focus is crypto first, climate second,” the FT writes.
The NFT of former Twitter CEO Jack Dorsey’s first tweet has lost almost the entirety of its USD 2.9 mn value in a year. In December 2020, Dorsey sold his first post on the platform for USD 2.9 mn. However, in an auction last week, no one bid more than USD 280 for it, while bids on platforms such as OpenSea barely reached over USD 10k, writes Forbes. The buyer, Iranian crypto entrepreneur Sina Estavi, has lost more than 99% of his massive investment which he decided to buy during the peak of the NFT hype. Estavi’s initial selling price was ETH 14,969, or about USD 50 mn, but the dramatically lower bids put an end to those ambitions. Players in the NFT space posit that the time for buying NFTs from celebrities or those of high stature has passed while others accused Estavi of attempting a publicity stunt. Estavi has previously said he is not willing to sell for less than his asking price.
Undeterred by the potential freefalling value, Dubai-based carrier Emirates is tapping into NFTs under the airliner’s plan to boost revenue and brand experience, according to a press release. It plans to “build signature brand experiences in the metaverse, alongside both collectible and utility-based NFTs,” with a launch expected in the coming months. Not sure what we’re talking about? Check our explainers on NFTs and the metaverse (here and here).