I. Andi Stanner Interview

VeChain Foundation Climate Research - Justin Goldston Interviews Andi Stanner of Toucan Protocol
Video link - https://youtu.be/bERCJtmv_AA

Hey, everyone, this is Andy from from Touken protocol as you introduce me, I'm product leader to come protocol. So I'm looking into and after everything in anything around metal registries. So basically the way of tracking carbon across its lifecycle and also around all the product aspects that we have to bring harm on chain, which is what we call bridges. That's basically tokenizing assets, namely carbon credits at this point in time, and bringing it into the metal registry. And then later handing it over to our other departments that are looking into giving carbon credits more utility on chain, which is financial products, commodification, and, you know, utility beyond the retirement of carbon, because that is our hypothesis that with more of these utility aspects around carbon tokens, which is unique to the blockchain and web three, and what web three can do with carbon. Our hypothesis is that this is basically what's you know, what will be driving a huge wave of demands and what will become a a sink for carbon credits, which ultimately, obviously creates demand for new projects and new mitigation action. And this is all what do we want to do?

01:51
Excellent, thanks. Thanks for that. So so, you know, in my, in my initial research within within this space, you know, going back a while back, you know, this whole meta registry, you know, topic came up, can you can you define that for non natives? I think that would be that would be good.

02:09
Yeah. So today, what we have is we have a bunch of registries and standard programs, normally, it goes like this, and we standard program. So, basically a group of, well, scientists or experts will define what is a good carbon crediting project, and who also do the QA, or basically the find the guardrails for the QA into this, they also run a registry system, a ledger of, of carbon credits. So basically, when they be when are they being issued? Who are they being issued to? Who are they being transferred to? And who are they being retired by, and what kind of additional metadata and information all of these transactions happen. So one of the things that we have, obviously, from from this aspect is that we, when we do all of this in silos, and when we're trying to do tackle a global project, and the global problem, we have many, many projects, we have, we get really quickly into interoperability issues and into things like double counting, meaning like you count the same emission reduction or emission, if you will, you count it twice. Or you spend it twice, which will be double use. Because you have systems that don't talk to each other, for example, you have the same projects and two systems. Or you move one project to from one system to another, and you lose a lot of data in between. So this is a big issue on a inter governmental level. But this is also a big issue on the private sector level, which is the voluntary carbon market. Because none of these crediting standards are, you know, have an oversight overseeing body that is regulating all of that. We do that in the VCM. So the voluntary carbon market, you know, in a self regulatory, and pseudo regulatory way, and yet we still our systems are still not connected to each other. So we have a lot of friction there. We lose transparency along the way. It's very costly to then retro actively establish transparency. So looking in doing due diligence doing audits on where something from or is this the only registry that has this project, for example, can I safely spend the credits kind of rest assured for that? So we spend a lot of money and time on that. So an ideal scenario is of course, a, a tooling that would combine all of these and build prisons between these these silos. And what better infrastructure has there ever been than a system that can be run completely trustless and doesn't require any private entity, any administrator any anyone who could do human error or could go rogue or could go out of business and lose all records, what better system did we ever have then at this point in time, where we have public blockchains who or which can take all of this information and are practically built for this because every transaction has embedded value into it. So and that is exactly what transacting carbon credits is you transact value. And so these systems are made for it. And our purpose, as a matter of history is that we provide a way of having a a ledger system that is can can serve can serve all these purposes that normally a centralized entity would do, which will to be combined all of this we keep track of one at one place, basically, conceptually in one place. But with all the benefits of a decentralized system, which is we we go out of business doesn't matter, right. So we have no way of spending or erasing, erasing the history of a credit or spending and credit credit twice or help anyone, no matter how many trillions of dollars you put onto this ledger, we cannot, it's it's the safest it can get at this point. And that is why we believe, and increasingly many thankfully due so that we need a registry of registries basically. So a meta registry, where current assets can be tracked can be can live, basically, through all of their lifecycle. Excellent.

07:08
So So with this, so yeah, you mentioned you mentioned they, you mentioned a number of a few challenges, you know, outside of the challenges that you already mentioned, what other challenges do you see with with this with this type of of comment, finance adoption, within this space, you know, from the from the current web through space, and then in order to get these traditional web two companies to come over to web three, and try and try to utilize this this tool.

07:39
I think one of the main, the main friction points here is the, you know, guilt by affiliation. In a sense that there's a lot of prejudice against what web three is, and what's happening inside of web three, and there's a lot of focus on on like, a very minor fraction of, of the actual energy that's been put into this in a sense of that is that that is actual scams, or that is actually a net negative for, for the planet. And it's being portrayed onto, onto a system that is trying to solve something completely different with what is a perfectly neutral infrastructure and perfectly neutral technology. And I think there's a lot of, you know, educational effort to be made, and also regulatory clarity to be given. So that people are, and by people, I mean, companies mostly, are not afraid of that this is, you know, the devil that they should not be touching. With a stick. It's, it's an it's a technology. And ideally, and I think that's something that we as web three need to need to nail much better than we currently do. Ideally, we understand that all of this is running under the hood. And we need to portray it in a way and we need to also enable us in a way that it looks like you don't even know that it's it's all of this is running on blockchain. You don't have to care you can operate as you operate it always we know we've just at a lower cost level on a higher frequency and at a at an easier auditability. So your auditor will be very happy with that. But you as an investor in a climate mitigation project, you might not even have to care and you should not care and I think that is where we need to go. And there's many many cool projects that that that triad is and building on ramps and off ramps and automation, etc. So so that people don't even have to interact with anything that feels like we have three or four is complicated or setting up Metamask wallets and stuff like that. And, but we're still early, we're still, you know, on the going west strip currently. So we're, we're the early pioneers, and we're learning every day on how to make it, you know, more acceptable for the, for the broader masses. And we also need a little bit of, you know, reaching out your hand from the broader masses, or for the representative of that, which is regulators maybe. And in all of that, that handshake will inevitably happen. And we all will prosper from that a lot. But I think it will be happening quicker, the less, you know, prejudice we have in between them, the less fat that is in between. So any kind of educational material, such as this is super highly welcome. And I think it's super important. And in the adoption Yeah,

10:59
that's one thing that drew said that that's that's important as well drew from Panama, from clay McDowell, you know, he said, he they're working with a number of organizations on to build the tooling to so they don't and they don't even know this blockchain. Right. So also, another thing is, they're actually doing a lot of education, what they had within industry, so are you do you all find a you all are doing the education? Or is it mostly the community that's educating people on what to can does, how's that working within your ecosystem?

11:29
It's both it's it's people who have the who hold the customer relationships because we don't sell credits or produce them or ideally interact with them on the, you know, outskirts of the on the extreme points of the lifecycle. But there's, you know, marketplaces and intermediaries, and, you know, consultants for project developers or project developers themselves, who educate other product developers. So we, we, we rely on those, of course, and it's the only scalable way of doing that. But at the same time, we do know that we have an educational you know, a, a task a quest of doing that. And so we do that we create lots of content, on on different aspects, we try to join every working groups on the, you know, from the conventional market, in order to, to educate players that are sitting at these extreme points, for example, standard bodies. So we spend a lot of energy and a lot of time for example, on on formulating what we think, is important input for the consultation pieces. So last summer, we'll be going down in my history, my memory as the as the consultation summer, because practically every every standard body issued their own consultations with overlapping, but also specific questions to their situation. And we try to answer all of them, and we try to be as collaborative as possible, and, you know, work and extend the hands. And even, you know, bend a little bit from away from our way we want to do in ways that are more easily to understand or easy to grasp. For, for, for the incumbent players. So in order to make this more, you know, to create a pathway, how information can flow, because the thing, one of the worst thing that anyone and everyone in this space can do on either side. And I even hate the idea of their sides about this. But if you think about web two, and web three, the worst thing we can do is being elitist. And that is either being like, Hey, we've always done it like that. And we're the fuck are you guys. And on the same way, the other way around, like, Hey, we're free, like we are. The old ways are all dumb, and all corrupt. And it's all run by banks, and it's not working. None of this is helpful. So I think the best thing we can all do, as doing what we all do best. So if you're good at content, you create content we have bunch of people also internally have to look into can do we do that and we create a lot of dots of those contents, we collaborate and I would ask the community and I always do too, you know, to do their missionary purpose on this as well. And I think it's we're making we're making headway with this. It's it's being from a standpoint where we have a standoff really between players. We're getting much closer with with everyone in what both the demand and supply side with with intermediaries and with standard improv And, and with lobby groups and interest groups, etc. All of them are, you know, trying to understand each other better, and all of them are trying to educate each other. So, that's really good. Excellent,

15:14
excellent. So, whenever So, given that, you know, the what your particular model, what, what, what protocols are you currently own? And then in your, in your opinion, how important is the interoperability between different different protocols and different ecosystems for this type of solution? Yeah, I'm trying to see how this how this Meterpreter registry works, from a interoperability perspective? Like, is that like a roll up? Like,

15:45
how's that work? So, question number one, what's the network's currently on so we are on Polygon, and cielo and are looking out for other for other chains as well. So we believe that the protocol should be on all chains, or basically on all chains that are interested or, and also interesting, in sense of an ecosystem that can benefit from the so there's no point in being on chains, and it's no point for chains that they have, you know, a utility, like a carbon crediting, or a carbon credit registry and bridges to carbon crediting systems, if there is no, no one using that. So one, one of the things that is important to us is that there's a, an ecosystem, a thriving ecosystem of demand and, and where this can, where these kinds of assets can create utility for people being it's for, you know, financial primitives, and the what's called refi use cases. But it's also in a sense, where, where people, for example, have exposition, and, and are very well on the way in this, you know, building a bridge to the, to the and I know that I'm stressing this metaphor a lot today, we're basically building a bridge to, to the web toots, fear of things and where corporates, for example, feel at home. I think this is also a very valuable, very valuable place to be. And so what do we think about interoperability, we think it's key for this, because we also don't think that there's one ecosystem to rule them all. Much, like, there's not one standard ng program to rule them all. Much. Like, there's not one methodology to rule them all. Much. Like there's not, you know, carbon removal, take care of everything. It's, it's a, you know, portfolio of solutions, like we have a portfolio of programs we're trying to solve here. So we need to have a portfolio of solutions. And for that interoperability is one piece. And so because it's unlocking, because different ecosystems, basically is the hypothesis here. And so how does it work as a matter as history, a meta registry needs to function meta, so aggregating in a form for different input factors, like standard programs, but it also needs to be meta in a form of it needs to be valid on on on different chains and different ecosystems. And the whole idea of, if you remember, in the beginning, I said stuff about not, you know, double use credits or not double count things, this has this has to be true, and has to be proliferated into this, you know, task of creating interoperability, because it would be, it would be a horrible scenario, if you go from one chain to another chain, and you basically you double the carbon credit, or you spend the carbon credit and you don't track it in this, you enable double spend. So that is one very, very crucial aspect that needs to be taken care of, and that is taken care of every time that we go to another chain. That we that we make sure that value can flow between systems, but can say we'll stay unique. And there's only basically one carbon credit or what in a token, reflecting one tonne sequestered from, from the atmosphere at any given time. And not several ones.

19:43
Excellent. So, so you mentioned you mentioned the whole refund thing. I think we've mentioned that a few times already. So in your definition, is it is it is it refi or is it is it common finance, you know, because the

20:00
In your words, I think refi to me is conceptually baking climate finance into finance. So by baking, climate mitigation, and and enabling the regeneration of the planet, by baking it as a financial as financial primitives into how we do business, how we transact value today. And so ideally, the outcome, the ultimate outcome of, of refi is that every time you transact one currency of value, you heal the planet a little bit. And now there's a bunch of things you could do that and carbon markets play a core role in this because they are the most advanced most, the biggest tool that we came up as a, as humans today. While that was employing the power of markets, into climate finance, and not make it a philanthropic thing, or a, we rely on governments only thing, because we saw that this is going nowhere fast enough. And that it's just taking too much time and politics are getting in the way of survival here. So we could there was created a private system and the concept mechanistic the concept of refi is to take the system and fill it with what we do anyway by transacting money by wanting to make profit by wanting to grow by creating utility by creating financial freedom, for example. And what better way would there be banking the unbanked creating financial freedom for the rest of the world? For people who don't have it yet, and at the same time, hook everyone up to this other system? That is basically empowering regeneration? So yeah, it is climate finance. But it's a thing, it's, it's powering climate finance. By again, it's it's the theme is recurring, putting it under the hood, ideally, you don't know what that you don't know that you participate in a refi. You don't, you know, think about that, you come and you want to borrow money, great, go to this place where you can, you know, borrow against, you know, you can hold a carbon asset, for example, and borrow against that, why why not that, rather than holding cash, why not finance, climate mitigation first, basically, and holding an appreciating asset, and borrow against that. So this is, you know, an example of how you bake finance, how you take climate finance and put it into financial primitives that we all use and need to use and want to use every day.

22:50
So, so given these, because I'm on board with you, I love what you all are doing. But you know, based on what you say, based on the conversations that you have in the industry, how far how far, how far out? Are we into into mass adoption for this? You know, in your in your in your opinion?

23:12
I think we're, we're not we're not as far away comparatively as the blockchain space itself. So it's a little bit of a conundrum. So it's younger than then web three in total is younger than decentralized finance. But it's less dependent on on recreating financial flow and, you know, on banking banks, for example, or on stuff like that, we are much closer and it's much easier for us to adopt because we are we are replacing a system that needed to be or needs to be wants to be also replaced and people are not fine, like many parts of the market are not fighting back against this and fighting back against technology, the blockchain technology and see the tremendous value that especially around transparency and immutability, and you know, no human error can take place in this what needs to be a high scale always available and high security ledger system. There's the role of trust into that already from from market sides. So, the adoption part that we need to have and the mass adoption part I think is is something that is via what you also discussed before and withdrew from from from key model and what I mentioned earlier also via the the idea of, you know, putting all of this under the hood and having having a usability layer on top of that, that To take care of fears and complexity, and etc, I think it's easier for us to do that in the climate space and in the climate finance space, than to do that, for example, in mass financing products. And, you know, replacing banks for your everyday is persons saving a checking account, or how you want to get your salary being paid in crypto or whatever, some stuff like this, I think this is much more complex and complicated and has many more barriers than where we are currently operating. Which is why all of this is and it's often called the killer use case, which is a bit you know, maybe poor wording, but it's it's a fantastic use case for blockchain. Because the value is intrinsic, it's we don't have to come up with currencies, and tell you that you need to trust me that there's definitely value in my protocol, you can see it, it's, it's there, you understand it, because people pay for the asset already. And at the same time, there is a little bit of educational effort to be done. But I think there can be a huge analog, for example, when major players in the industry, for example, standard bodies started officially endorsing this or when major when major demand side players unlock, you know, unlock the gates by buying into this. And trusting this, I think that will have a ripple effect. And that that will be tremendous. And it will be easier, because the market itself currently, it's a $2 billion market VCM. So it's very easy to like, comparatively easy to bring that on chain, for example. And requires not that much capital as other markets would, for example, require, if you want to bring the whole real estate space onto blockchains, that will be a much bigger endeavor. So I think we are at a point where many interesting things come together, market is still small, sadly, but that's the truth. DCM is still too small, we need to grow it. But we are in a place where this means we can we can we have people and we have counterparts that are very, that are centralized enough to talk to them in a custom fashion and can convey the story uniquely so that people can understand it. And so that we can take fears, as everyone has them. And we can address them individually. So we don't have to run around with for, you know, with, with 1000s of companies on an odd 1000s of standard bodies of 1000s of of centers or hundreds of regional governments or something like this, there's only a few for us, comparatively, to condense. And so I think that plus the intrinsic value of, of web three for this is, is an awesome singularity that we should capitalize on. And I think one of the big barriers that's still in between all of that is, like I said, the missing educational piece or the and, you know, in conjunction with that the fear around what could go wrong. But yeah, I think that's something to me, it seems like this is this is a problem that's that can be tackled.

28:50
Yeah. And you say you say something, you said something that I hadn't even thought of yet. Where with this, you're actually solving a true a true real life problem. Where in the past, in a lot of use cases in blockchain, we were creating solutions, yes, the solutions work. But we really weren't solving the problem. Right? So if we can educate if we can educate the people that yes, we are solving a real world problem, that nothing that you know, that's one thing that that's one way that we can get people in and also was very interesting, where you where you point out that it's going to be easy to bring a whole entire, you know, sector on chain. Right. You know, I think I think it'd be impossible to bring a real estate industry on chain in my opinion, but but like you said, it's so centralized and so small, that you can bring it on chain, that's another that's another interesting interesting concept that you can bring to the industry to the to the standard or that standard or standard and standardized bodies, where you know, I think you're gonna get you're gonna get this web to adoption within within this space. So so that's that's pretty much all I had. We went we went a little long so so I apologize for that. But how can how can people find you? And do you have any any calls to action for people who view

30:05
this? Absolutely. So you can find us on to planet earth, you find all of our socials there and information, I think we're still on every social channel that that you most likely want to be on also. And you will find this there also as token protocol, join our Discord. We do have a very nice Desportes comm conversation going on. And you can ask any questions there reach out to us on any of the socials. And you can you can it leads to getting interviews the next day, if you if you do that. So we're all there to answer any questions. And my call to action. Is that get familiar with all of this, like, if you are if you are a web to person working in the space interested in that, read up on this ask questions where like the whole community is super, like it's a it's a game changer if you change from a web to, you know, ecosystem into a web three ecosystem. And you see how helpful people are how there's no dumb questions, how anything and everything you want to ask can be asked and will be answered sometimes with memes, but in 90% of the times you will you will get a proper answer and go about this. There's no fear. You don't have to have any fear about this. And reach out and my call to action to any web feed crowd watching or, or that that has been that, you know, is being involved in this is we don't want to be any kind of interest like we we need some. We need some humble that has been a market that has been pulled for decades. And it's working no matter what we think about it. It's working. It's creating mitigation action. And I think we all of us, the whole purpose is to not increase the divide, but actually take it away. And for that, I think we need to respect and meet people where where they are mentally and help them make the transition to what we all know already is generational technology. It's our internet basically our intimate moment. And there is no you know, nothing to be ashamed of, but also nothing to be elitist or proud of in a sense that this is all for us all together. Andy, thank

32:56
you thank you for your time. Thank you for your time. I really appreciate it. And you gave us you gave you gave you gave me a lot to a lot to further free research further. And best of luck to you and to Ken. Thank you very much. All right, thanks. See everyone