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Published on 
February 12, 2024

erable° Impact Investment Models: Learnings, Evolutions, and Outlooks

In our blog post titled "Redirecting Savings Towards Transition: What if We Reinvented the Product?", we discussed our aspiration to develop a new class of financial assets. This would be designed to allow savers to contribute more substantially to financing projects related to the ecological transition. After more than a year and a half of research and development, punctuated by several tests (Proof of Concept, PoC), the time has come to assess these efforts and outline our forecasts for the upcoming months and years. "Test, test, and test again"
erable° Impact Investment Models: Learnings, Evolutions, and Outlooks

Cardashift Era - Launchpad and 1st PoCs 

Selection of the first project batch and support for the winners in finding their financing model

To select the first two projects that would be supported to identify and implement an innovative financing model using blockchain technology, we proceeded with a three-stage selection system:

  1. Identification and selection of 10 projects offering real environmental and/or social impact.
  2. Pre-selection of 4 projects through our community's vote.
  3. Choice by the Cardashift team of the 2 winning projects.

Revolte and Pyxo were identified as the first two prototypes for our fundraising efforts at the end of this process.

The winners received specialized support to integrate the use of blockchain technology in financing their initiatives. The guiding principle: To ensure that the economic profitability of the funded projects is always linked to the creation of significant positive impacts.

We resulted in the creation of a unique financing model based on a community treasury: In exchange for an investment, we offer a token that grants the investor future benefits, such as access to a treasury from the project's revenues and a dashboard to track its positive impact throughout the project's lifetime. Each investor's share of the treasury depends on the number of tokens acquired. It is funded by the project's revenues or transaction fees from token exchanges or investor exits.

The PoCs were designed to explore interactions that emphasize and enhance the value of this treasury.

Launch of PoC #1 - Revolte 

The first proof of concept was with Revolte, raising funds amounting to $40,000.

The model: Purchase, repair, and then resell electric vehicles.

Two elements were important to test in this first pilot:

  1. the ability to create a connection between the project's activity and the investors,
  2. and the potential for additional financing that the secondary market* could bring.

*The secondary market refers to token exchanges between investors at a price determined via mutual agreement.

On the first point, we provided the first version of an investor dashboard that made it possible to visualize the vehicles purchased and repaired by Revolte, as well as to track the amounts recovered in treasury.

This initial dashboard release marked the first phase of product investment for erable°, totaling $20,000.

Revolte investment dashboard
Only investors are able to view the cars financed

On the second point, the goal was to test the innovative mechanisms conceived in the token's economic model - the "tokenomics.".

The "tokenomics" team invested $15,000 to assess the technical viability of the treasury model and the effect of transaction fees (5%) on asset prices.
These fees, added to the community treasury, aimed to increase the vehicle repair potential and investors' profits.
The outcome of the test, showing only a slight effect, ultimately raises questions about the efficacy of the mechanism for future fundraising activities.

Launch of PoC #2 - Pyxo 

The second proof of concept was with Pyxo, raising funds amounting to $40,000.

The model: Purchase and rental of reusable containers in the catering industry to fight plastic pollution and earn a share of the rental income with each usage cycle.

After the unsuccessful trial on the secondary market, it was decided to more thoroughly work on the utilities (benefits) provided to investors for this PoC:

  1. The ability to offer unprecedented transparency about the project and its impact,
  2. As well as to enrich the extra-financial utilities for investors.

On the first point, we decided to invest more significantly ($45,000 in CAPEX) in the dashboard component, to turn it into a real comparative advantage.

Three areas were prioritized for improvement: a redesigned interface, transparent display of cash flows on the blockchain, and a direct connection to Pyxo's back office to track the containers and the impact generated in terms of plastic avoided.

Pyxo's investors dashboard

On the second point, we introduced a concept of rarity for each token, randomly defined at the time of investment. These levels of rarity were intended to eventually grant access to specific benefits exclusive to Pyxo and its future sales.

This ongoing effort allowed us to test our hypotheses on utility aspects and to implement a version of the dashboard, enabling us to now offer our solution as a white-label service. However, for subsequent fundraisings, it was necessary to return to simpler financing models. This became our main focus on the HomeCycle PoC.

Evolution towards erable° - Simplification and Professionalization

Following the first two PoCs, two main lessons emerged: focus on the primary market and simplify the discussion around utilities to prioritize the treasury yield model.

For the HomeCycle projects ($16K for the first, $20K for the next), we thus chose to primarily work on clarifying and professionalizing the treasury yield model.

Furthermore, we made our platform more accessible and enhanced the investor experience. We recognize that the desire to invest in meaningful projects goes far beyond the technical aspects of blockchain. Investing should not be hindered by technical barriers. Thus, we introduced payment options via credit card and made creating a digital wallet with an email address effortless, aligning our user experience with that of more traditional crowdfunding platforms.

erable app's investors experience

In our upcoming fundraisings, while continuing our commitment to finance tangible assets with a positive impact, we are considering a strategic overhaul of our legal structure. This initiative aims to shift our value proposition towards a financial contract model, closer to the primary concerns of investors.

Moving Towards a Novel Model in Three Steps

1st Step: Revenue Sharing Models Linked to a Pool of Tangible Assets

Just like with electric cars, washing machines, and reusable containers, we will continue to bridge digital finance and the real economy with a positive impact.

Our future contracts will strengthen the following three axes:

  1. A firmer commitment from projects on the percentage of revenues returned to investors
  2. A dedicated clause on the obligation to allocate funds towards assets
  3. Customization of contracts establishes a direct link between investors and project leaders

This will also bring evolutions to our platform: implementing a Know Your Customer (KYC) process for each transaction, and every investor must sign a contract.

Please note:

  • The secondary market will initially be disabled and, once reactivated, conditioned on an agreement signed between the project, seller, and buyer. We commit to facilitating the upcoming process on the platform as much as possible.
  • The mechanism for withdrawing yields from the treasury will also evolve in the future: investors will have the flexibility to withdraw their funds from the treasury at any time without having to "burn/destroy" their token in return.
  • Upon agreement with the project, funds awaiting real-world deployment may be systematically allocated on DeFi (e.g. AAVE). 

2nd Step: Diversifying Our Offering

Firstly, we plan to offer the opportunity to invest not just in a single project but in a portfolio of projects. The undeployed capital will also generate interest by leveraging the most well-known and recognized mechanisms of DeFi. This new investment model provides greater flexibility and liquidity for investors.

Next, we aim to create thematic project bundles, focused either on a specific sector like electric mobility or on a defined geographical region. This approach will allow investors to target their interests and support areas that are important to them.

Furthermore, some of the envisioned products require additional legal agreements to be launched in the European market. This includes models similar to bonds, which we could offer in the form of security tokens. In this context, obtaining the PSFP (Crowdfunding Service Provider) license is one of our priorities for the coming year, thereby strengthening our regulatory compliance.

3rd Step: Developing a Novel Financial Instrument for Positive Change

After testing and approving our financial product, our goal will be to return to the utility aspect with an even more sophisticated treasury management smart contract.

The idea would be to give investors the opportunity to actively participate in decisions regarding the allocation of funds from the community treasury and to make them co-owners of the tangible assets financed, as holders of shares in this treasury.

This innovation requires legal adjustments, particularly in terms of the legal recognition of a blockchain contract as the owner of physical assets. We have initiated discussions with France Expérimentation to assess the feasibility of a pilot test.

In conclusion, we are open to discussing our products and their developments. Feedback and questions from the community are the best drivers for continuing to innovate in the right direction.

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