Green RWAs Are Set To Recast Climate Assets

Opinion by: Nicholas Krapels, head of research and development at Mantra

By 2035, the real-world asset (RWA) market is expected to reach over $60 trillion, with green RWAs well-positioned to become a significant subsector in this global onchain movement.

Today, tokenized green assets still represent less than 1% of total climate assets and a similarly small percentage of RWAs, which currently are mostly tokenized treasuries.

However, with the total value of green assets set to soar and the rate of tokenization increasing, the green RWA market is an untapped growth opportunity. 

Platforms are emerging to tokenize billions in green credits 

Impending strict EU regulatory frameworks are set to exponentially ramp up global carbon trading in the next few years. And while supply bottlenecks and verification hurdles persist — primarily due to the infancy of accepted and regulated tokenization practices — the prospect of programmable green assets onchain has inspired many ambitious infrastructure projects, particularly in emerging markets. 

For a proof-of-concept, just look at Dimitra, which uses blockchain and AI to help smallholder farmers boost productivity and build more resilient agricultural systems. Their focus is on cacao production in Brazil’s Amazon and carbon credit projects in Mexico. These are projects that will allow direct investment in smallhold farms, ultimately providing project funding and estimated returns between 10% and 30% every year.

Outside of agriculture, but still very much focused on creating a category poised for greater and greener good, sits Liquidstar. Its waypoint stations charge batteries, enable e-mobility, generate atmospheric water, provide internet connectivity and host micro-data centers. For powerless communities, it’s a leapfrog into wireless, sustainable electron ecosystems. 

A Liquidstar waypoint set up last year in Jamaica. Source: Liquidstar

In the next decade, digital innovation fostered by regulatory clarity will offer global society its best chance to reconcile the all-too-often incompatible goals of sustainability and profitability. 

While green assets used to be anathema to profit-driven investors, alienated by the confusing environmental, social and governmental narrative, there are signs of “green shoots” in the nascent green RWA movement. 

Unlike their Web2 counterparts, blockchain efficiencies allow tokenized green assets to realize synergies…