NEAR & Social Good: A Deep Dive Into Open Forest Protocol

July 25, 2022

Humans are waking up to the ecological and psychological benefits of forests. And if civilization is to tackle climate change, then protecting and regenerating forests is one incredibly important tactic. 

But slow and complicated processes dominate the forestation industry, as do high costs and little transparency. This is particularly true in the carbon credit industry, where companies offset their fossil fuel consumption by buying and trading credits derived from forest projects. 

Enter regenerative finance, or “ReFi”, in Web3 parlance. ReFi projects like Open Forest Protocol are using smart contracts to transform how we understand the value of forests. They are bringing much needed transparency, high quality data, and funding opportunities to small and medium sized forest projects and securities. 

With increasing calls to mitigate the effects of climate change, ReFi couldn’t have arrived at a better time. Built on NEAR, OFP is one of a growing number of ReFi projects illuminating a path for how decentralized communities can have positive, real world impact on the environment. 

To get a better sense of how Web3 is tackling ecological issues, let’s take a look at Open Forest Protocol. 

Forest projects before the blockchain

Before crypto, there was much to like about reforestation and forest conservation efforts, says Frederic Fournier, CEO and Co-founder of Open Forest Protocol. He notes that the industry created a common understanding around methodologies used for measuring, reporting and verifying (MRV) tree planting and carbon credits. 

“[But] there is very little to no digital transformation in the industry,” says Fournier, who previously worked in the environmental consulting sector, and managed an NGO that supported sustainable reforestation projects. “Meaning the processes are slow, complicated, expensive and not transparent.”

Olga Dyka, OFP’s Chief Operating Officer, notes that while MRV methodologies are well-developed, none are comprehensive. And although these methodologies can work in Web3, there is rarely room for future developments or improvements. 

“There is also a lack of financing for small or medium-sized projects to ‘get off’ the ground,” she says. “The lack of transparency is that forestation still follows a ‘carbon-sequestered-on paper’ approach in carbon credits generation, offsets, and trade.”

Inside OFP’s smart forest contracts

With Web3, forestration projects can streamline their work in a multiple stakeholder environment. In just a few clicks, anyone can access verified, high quality, and immutable data. 

“It will bring transparency and trust in a system that is today opaque,” says Fournier. “Everyone will have access to the best MRV tools.” 

As Dyka notes, these MRV tools will be free. Reforesting and conserving forests with Web3 technology will, according to Fournier, create a community-based approach. Ideally, it will upend the industry’s siloed and centralized status quo. 

“It will give power to communities and people to value their restoration work,” he says. “And another mindset about how to scale in an open and transparent way.”

With standardized, accessible MRV tools, OFP can open doors for offsetting and carbon credits trading on its protocol. While OFP is still developing these features, the team can easily implement with NEAR smart contracts. 

“It also creates the possibility for many decentralized apps to be built on top of OFP protocol to benefit forestation beyond MRV,” says Dyka. 

To give users access to MRV data, OFP’s smart contracts primarily manage the protocol’s cyclical data upload and validation processes. When a forest project leader uses OFP to measure their trees’ biomass and report on the forest’s health, they interact with the protocol’s front-end interfaces. Project managers can upload certain data points about their trees, such as measurements and photos of individual trees. 

After being compiled in IPFS, these data points are sent at regular intervals to OFP’s distributed group of data validators. Think of these validators as data auditors. They evaluate the legitimacy of the reported data, then assign a binary affirm/deny judgment to each data upload. 

“This judgment is recorded in the project’s data and saved on NEAR’s blockchain,” says Luke Schubert, OFP’s Product Development Lead. “The entire cycle begins again with the forest project manager collecting more data. We have additional smart contracts in development that will enable nature-based asset generation and results-based financing.” 

All OFP users must first create a NEAR account, where forest data is stored as utility NFTs representing individual forest projects. OFP’s dashboard automatically update this forest data over time. 

“We were surprised by how easy it was to integrate the necessary functions of OFP into the larger NEAR infrastructure,” says Schubert. “And the standardized token contracts enabled reliable NFT creation and management. 

Beyond OFP’s front-end and smart contracts, the platform developed and released a mobile app called “Forester” that can collect tree data from the field. 

“The mobile app works offline, enables geo-fenced data collected, and provides a single-directional feed of information from forests to the NEAR blockchain,” says Schubert. “This app is the first of many tools we will provide for forest project managers to report on what is happening within their forests.”

Social good on Open Forest Protocol

While it’s one thing to disrupt the forestation industry, the community-based approach that OFP pursues will also elevate social good. 

For Fournier, one particular social good would be an onboarding process that is easy and open for all. Making OFP’s tools free to use, while allowing generating incentives to profit for the planet and its people, are also game changers. 

“OFP creates opportunities for communities to directly participate in combating the climate crisis along with other stakeholders (‘one person effort also matters’),” says Dyka. “The platform also creates equal opportunities for forestation companies in gaining access to forestation financing which overall results in scaling forestation worldwide.”

The OFP team also sees the protocol empowering both the crypto and climate communities. OFP is an application with real world impact through people and their environment. It can be a model for other Web3 projects working to integrate with traditional industries and the real, physical world. 

“It’s a concrete project that these communities can understand and get involved in,”  Fournier says. “They can see a concrete application of blockchain. It’s a way to create interest in Web3 and its potential applications.” 

But OFP will also have an impact beyond giving small to medium-sized projects, says Rim Berjack, OFP’s Community Development Officer. The protocol will also benefit local communities and indigenous peoples who depend on forests for their way of life. 

“We want to provide a viable alternative to local forest communities and indigenous peoples who depend on their forests, who have been exploited by people using their resources,” says Berjack. “We want to put the MRV and financing tools in their hands. I think more than anything this is a form of social good we are the most excited about. Autonomy and empowerment, which brought many of us to blockchain in the first place.”

Investing in smaller forest projects

OFP can also impact communities, farmers and land stewards by proposing an answer to their restoration efforts. With OFP’s help, the people can support and scale their forest and land use efforts. 

As Dyka points out, small and medium-sized projects in developing communities are getting MRV tools through the OFP dashboard. They now have the ability to run a project in a transparent way. This gives projects more credibility in getting access to potential investors and financial donors. In turn, this will lead to more workplaces and better living conditions in specific regions. 

“Basically, we’re making financial access happen for people who maybe didn’t have it,” says Dyka. “To me it’s about creating equal opportunities wherever people are.”

“My background is in law, and, as lawyers, we’re always in a fight with somebody for something, being in a constant pursuit of truth, equality and fairness for everyone,” she says. “And for me, building OFP is about fighting for truthfulness in the current state of forestation by bringing metrics on public immutable blockchain, which, in turns, unlocks financing for forestation, available everywhere and for everyone.” 

“We are revolutionizing the forestation industry, and we are bringing transparency on-chain—that’s important,” she adds.

Aside from Web3 technology, Fournier believes long-term vision and an entrepreneurial spirit is necessary for new players. Project leaders must envision these efforts over 10 to 20-year timeframes and beyond, if they’re serious about reforestation and forest conservation. 

Going it alone as a forestation startup is most likely impossible. New projects usually seek out the help of non-governmental organizations (NGOs). Fournier says this is common in Kenya, where there are many social and environmental NGOs. 

With OFP, there is now another path. 

“If you provide projects with adequate tools and pre-financing that will come in the second stage with OFP, they could very well start a very small project—a few hectares of restoration—from scratch because it’s completely possible,” says Fournier. “And if they do a good job at that, then they can scale from there and get bigger and bigger.”

The future of OFP and ReFi

Unlike the traditional forestation industry, OFP has plans to keep building and evolving. Over time, more exciting products will build atop OFP’s existing MRV stack. Imagine, for instance, an OFP starter that could be a finance mechanism for projects. 

“There will also be integration with other projects in the Web3 space. Especially integration with carbon credits providers, executing partnerships with other like minded initiatives, and so on,” Fournier says. “The economic downturn turns out to be an opportunity for OFP. It gives us the space to focus on building and communicating about the project’s long term positioning.”

Schubert envisions OFP’s smart contracts evolving in many ways. In the coming months, the team will be open sourcing the OFP codebase. 

“This will enable really cool natural asset financing tools and novel nature-based climate solutions to be built on top of OFP and use the validation oracle we have created,” Schubert explains. “So, while our core smart contracts that manage the cyclical data upload and validation processes might not fundamentally change in the future, new solutions can be developed and plugged into the existing OFP ecosystem.”

Ultimately, OFP plans to create the biggest global ground platform for any and all forestation companies across the globe.

“They will be able to run a project with us and to create a strong community of various stakeholders, who will ensure transparency,” she says. “The world can go through an economic downturn, there may be conflicts, wars, profit or deficits or other force-majeurs, but nobody canceled the next decade’s 1.5C degree temperature rise and the fact that we all somehow are going to live with that. So, we have to keep moving and OFP has stable financing to run the project to reach the planned goals.”

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