Please describe your proposed solution.
Our Solution
We are excited to introduce Metera, a protocol that enables users to track and create portfolios of cryptocurrency-only impact-focused assets. Our protocol supports rebalancing, built-in sustainability parameters, and decentralized governance.
Market
Investor activists seeking easy exposure to high-quality initiatives in their crypto portfolio, promising eco-friendly crypto-based projects, and the world writ large.
Problem Space
Increasingly, investors are putting their money to work in environmentally-friendly ways. Their reasons are not difficult to understand:
- The Intergovernmental Panel on Climate Change (IPCC) regularly reports a ‘code red’ assessment of the human-driven rise of the global temperature [https://news.un.org/en/story/2021/08/1097362]
- Irreversible negative effects from climate change are already apparent in the Maldives and other susceptible regions
- Moral implications as the most vulnerable populations remain the most exposed
- An increasing number of attractive products are available for making an environmental impact
What’s more, governments are adding their voice to the growing chorus calling for mindful, yet impactful, change. European regulations have codified sustainable practices into investment risk assessments [<https://eur-lex.europa.eu/eli/reg/2019/2088/oj>] while the UN has long since prioritized sustainable goals.
Indeed, the trend among policymakers and firms is strong. Socially responsible asset management platforms like OpenInvest have received brand-name investment backings as other similar high-flying startups garnish headline attention. Financial market data provider Refinitiv also warns against ignoring the sector after seeing sustained investment growth throughout several regions.
Please describe how your proposed solution will address the Challenge that you have submitted it in.
Integrating Sustainability into Cardano
Despite the strong interest, however, impact initiatives in the crypto space remain limited. On the contrary, unfortunately, proof-of-work blockchains like Bitcoin and Ethereum have spurred backlash from sustainability interests for their outsized footprint.
Cardano, on the other hand, relies on an environmentally-friendly proof-of-stake consensus mechanism with a markedly reduced consumption of electricity. This contrast positions Cardano to become a leader amongst blockchains with respect to sustainability, a designation that will carry dividends into the future.
Unsurprisingly, some early-mover projects in the space are taking advantage of the situation. Veritree recently partnered with Samsung to leverage on-the-ground data capture [https://news.samsung.com/us/samsung-veritree-plant-millions-trees-fight-climate-change/], and RealFi project Empowa enables affordable and greener housing in Africa.
These visible impact-focused projects are, by and large, familiar to ecosystem participants. Yet, the Cardano ecosystem is young. Other equally-reliable innovators have yet to garnish the same level of attention or be fully vetted by the community.
Our Proposal
The Metera project is committed to addressing this shortcoming. Our platform consists of portfolios focused on vetted, high-quality, sustainability projects building on Cardano. Exposure to these portfolios is represented via ETk, impact index tokens. Participating users receive ETk in a pro-rata manner relative to their purchase size, and ETks can be freely redeemed at any time.
More importantly, Metera leverages a robust oracle system to properly vet and rate eco-friendly tokens. This process reduces the burden on individuals. Moreover, it helps users sidestep “greenwashing” wherein firms feign sustainable goals with the hidden interest of promoting their brand.
Metera relies on a robust and modular architecture:
- Multi-asset Vaults
- Multiple sources for pricing and impact metrics
- Smart contract-mediated rebalancing
- Integrated portfolio management processes
- Sound governance structure
This architecture is covered in detail in our documents included alongside this proposal. A demo video details the current functionality of the project.
Demo video link:
<https://www.youtube.com/embed/f6mHcUM2GTg>
What are the main risks that could prevent you from delivering the project successfully and please explain how you will mitigate each risk?
Currently, Metera is in an early v0.1 state with development ongoing. This proposal is intended to fund further development and testing as we move briskly towards a mainnet release over the coming months.
As such, risks preventing delivery are decidedly low. The main development challenge covered in this proposal involves off-chain infrastructure and timely deployment. Potential complications have already been planned for and are accounted for in our funding budget. Our development team can rely on the larger MLabs team—over 100 developers—if unexpected difficulties arise, although this appears highly unlikely.