**4. Models for cryptos and nature conservation effectiveness**

The observed distances of Blockchains and tokens to their nature objects offers a large room for improvements and proposals to place the nature conservancy objectives clearly outlined and above the blockchain, itself. The major concept here presented is to place the object in first place, leaving the coin and the blockchains to better subsidy funds, provide storage of indicators and resolve governance issues. The issues covered in this part are: fundraising, Fintechs and DeFis, responsible tokenomics, and building a community around the coin.

#### **4.1 Fundraising**

The typical sources of funding from cryptocurrencies and blockchains can be summarized in Grant Coins, Initial Coin Offerings (ICOs), Microfinance with capital coins; and Donations through blockchain smart contracts.

Grant Coins, among many applications, are donations from specific purpose coins directly to a project. ICOs are the typical launch of a coin, in this case, with all set of project objectives, responsible tokenomics and clear governance and economic return to investors and the project beneficiaries. Micro finance with capital coins and donations through Blockchain contracts aim at providing funds to communities through coin based donations and micro loans, commonly addressed by Defis and Smart Contracts4 .

Initially, the relationship of blockchain and tokens to a nature project, can be analyzed under a framework containing the project objectives with the blockchain

<sup>4</sup> DeFi is the acromym of Decentralized Finance, in the form of financial applications built on blockchain technologies, typically using smart contracts. Smart contracts are automated enforceable agreements that do not need intermediaries to execute and can be accessed by anyone with an internet connection.



*Perspective Chapter: Cryptocurrencies Effectiveness for Nature DOI: http://dx.doi.org/10.5772/intechopen.106493*

and coins roles. In this perspective, the major role of a coin and the blockchains are related to funding and financial services for a conservation project including nature preservation and lifequality improvement of locals, representing a group of beneficiaries. Therefore, the project must address questions about the problem to be solved; the funding potential; regulations; technology structure; coin exchange needs; and associate financial needs. An example of fundraising and associate financial needs using blockchain and coins for a nature conservation project involving local populations, is presented in **Table 2**.

#### **4.2 Fintechs and DeFIs**

Nature related projetcs can be supported by a specific financial services (fintech) entitity linking coin investors with projects gathering conservation issues and small businesses of sustainable local products. The fintech provides grants and loans, and if applicable, business mentoring support. The ICO must be supported by a thoroughly defined business model with a structured platform under blockchain. In a basic flow of funds, the fintech launches its coin, receiving Bitcoins or fiduciary currency, thus forming an investment account, abiding to all regulatory issues. The raised funds are directed to a specific credit account to perform grants and loans to projects. A DeFi takes the roles to channel and operate the payments, receivables and interest accruals (if applicable) in the scope of supported projects. All projects are selected from a thorough business analysis and once they receive the loans, a clear and continuous communication is established among the projects with the fintech staff and coin investors. The underlying coin is tradeable in a cryptocurrency exchange. This is a summary of an effective financial flow of funds between a coin and supported projects. The methods and systems may vary depending on the scope of projects. The key aspects of this solution is to provide an operating financial solution providing solid links between one coin or token to its supported objectives. A responsible coin will address these isssues, to effectively implement a project together with beneficiares, far beyond simple advertsing and basic web information. A key issue for a successful project fundraing from coins, lies also on a responsible tokenomics.

#### **4.3 Responsible tokenomics**

The uses of a token must be well structured. A responsible token project must be supported by a responsible tokenomics for a stable coin with clear outlines about the flow of resources and monitoring of project funds. The relationships of the token with the project must be qualified and measured, as briefly laid out in **Table 2**.

The key point for the creators of a cryptoasset is to understand how the digital currency will be used, in this context, understanding the clear link between the asset, the use of its blockchain, and the value and service offer attached to this asset. A well structured value offers a greater possibility of expanding the services and goods of the asset, thus generating a greater desire for its purchase and use, and therefore a greater demand and increase in the value of the currency. This logic is totally different from the "boom-collapse" effect observed in most currency issues. In this case, the concern with connecting the value of the currency to a clear value construction of the supported object, in this case nature and its beneficiaries, should be above the normal speculative orientation normally observed. In summary, key issues must be addressed, such as:


Cryptocurrencies and tokens built on the blockchain must have pre-defined issuance schedules created by algorithms for the coin issuers to accurately predict the coin's volume and launching dates. It is relevant to point that yet it is possible for most cryptocurrencies to change this issuance schedule, such an event requires the agreement of stakeholders around the currency, thus offering further difficulties for its implementation. This issue becomes more relevant with the inclusion of the project's beneficiaries in the coin.

Tokenomics should also be a guide to the potential future value of a coin. This prediction should be clearly placed within a relationship of the coins, investors and the projects supported. This measure will, at least, mitigate the speculative nature of the coin's investors. A possible arrangement to improve the relationship between a coin and project beneficiaries is to include beneficiaries as asset holders, with guarantees of stability and tradeability of their assets, as following briefly introduced.
