Before diving back into the heart of the matter, let's restate what blockchain is: it is a large shared ledger allowing for transparent tracking of transactions and asset flows. These assets can be both physical and intangible.
Ensuring the tracking and transparency of funds raised
As mentioned earlier, blockchain naturally ensures the transparency and traceability of financial flows, concepts that we directly apply to fundraising and its allocation.
Transparency is of particular importance in the context of impact investing. While an increasing number of savers now recognize the benefits of sustainable investments, many believe that there is still a deficit of information in this area (AMF, 2021).
The notions of greenwashing and social-washing are prevalent - and rightly so - limiting the financial commitment of most individuals.By using blockchain, we provide our investors with dashboards highlighting key financial metrics related to the supported projects' investments. We offer detailed tracking of funds raised, their allocation, and the income generated for our investors.
Meeting the growing liquidity needs of impact projects
Blockchain has enabled the development of an alternative financial ecosystem: decentralized finance (DeFi).
While nearly 1.7 million individuals currently lack access to traditional banking services, the DeFi ecosystem has introduced many to new financial mechanisms without entry barriers.In recent years, the DeFi ecosystem has undergone significant transformation, recording a significant increase in its user base with 45 million unique users - and we are just getting started - and nearly $47 billion in total value locked.
DeFi protocols have garnered considerable attention for their ability to mobilize funds from individuals and offer substantial returns to investors.
We consider blockchain, and DeFi as an unprecedented and underutilized source of liquidity for the impact ecosystem, addressing social financial inclusion issues while providing opportunities to generate income.
Collective Solutions to Environmental and Social Transition
The decentralization concept promoted by blockchain has re-emphasized the importance of each individual. At Erable°, we leverage these individuals to form strong collectives in support of the projects we accompany.
We believe in the relevance of collective intelligence when the involvement of each individual is free and thoughtful.In this regard, the various fundraising efforts have given rise to communities of individuals who share the same commitment and willingness to address the issues raised by the projects.
To go further, we have aimed to involve these individuals more in governance processes made possible by blockchain. For example, we recently organized a vote for the Revolte project to decide whether to purchase an electric vehicle with the funds raised.
This collective approach is relevant in the face of the environmental and social challenges we are facing. It is this decentralized governance that will realign decisions with the goals of transition. Let's not forget that the consequences of these issues are now global, which is why solutions must be thought of collectively: especially, funded projects require the commitment of as many people as possible to truly maximize their impact.
Thus, creating a community of committed investors around the project is an essential condition for success.
A Citizen Fund Model for Impact Asset Financing, Accessible to Retail Investors
This collectivization is based, in part, on the concept of shared treasury that we highlight for the projects we support.
The individual is no longer just a retail investor; they are part of a collective effort for environmental and social transition. In this sense, and through the governance concepts mentioned earlier, we introduce a citizen fund model for impact asset financing.
DeFi allows us to bypass the constraints of traditional finance that still keep retail investors too far away.
From the digital assets recorded on the blockchain that we offer during our fundraising efforts, investors participate in collective financing of initiatives and benefit from its associated advantages.
In addition to rights related to the citizen fund, the digital asset could grant investors access to experiences, products, and services specific to the funded projects. Impact investing, typically reserved for a limited group of individuals, becomes accessible to a wider audience with our products.