According to Canadian Forest Industries, about 340 million square metres of timber were consumed in 2018, and over 359 million square metres will likely be utilised in 2020. Unsustainable timber production practices fuel the bulk of the world’s consumption, leading both businesses and individuals alike wanting to take action.
Treecoin, a blockchain-based ethical reforestation and timber cultivation programme, wants to maintain the “circle of life” by planting and harvesting trees.
Based in Switzerland, the company has launched an initiative called a “hybrid token offering” to purchase fallow land in Paraguay to plant 10 million trees—with the goal of eventually planting 37 million trees in South America.
“Many countries have already paid the price of deforestation,” TreeCoin CEO Jörg Schäfer said in a statement. “Paraguay is a particularly tragic case, having lost almost 90 percent of its eastern forests—causing irreversible damage to the ecosystem. Realistically it will be decades before its woodlands can return to their former glory. But this reforestation initiative is worth the investment, on both a local and global level.”
The hybrid token offering involves a dual-token model. First, security tokens called “TREE” are sold to investors. Each security token is backed by one eucalyptus tree planted by the company in Paraguay. Every TREE token sold generates “TXC” cryptocurrency tokens. The TXC tokens are assigned to the token buyers and distributed to the project and other beneficiaries. One TREE security token generates 100 TXC cryptocurrency tokens.
Investors of the hybrid token offering have both TREE and TXC tokens. TREE tokens ensure that the investors receive a share of the profits from the timber harvests, whereas the TXC tokens will be used as a native payment currency in Paraguay to support social projects, communities and local retailers.
“Put simply, anyone can very well imagine the stability and growth of trees and their future uses,” said Markus Oeser, co-founder of TreeCoin. In conjunction with blockchain, we create a sustainable investment opportunity with transparency and stability. By doing this, we developed the first completely state-approved security token (TREE) in Switzerland.”
The project has been working with a local reforestation partner to research the logistics of this ambitious initiative for several years, even operating a local training facility to contract Paraguayans to take care of eucalyptus seedlings in nurseries.
TreeCoin has come up with a 23-year harvesting cycle to bring the company’s plan to fruition. In the first year, the eucalyptus seedlings will be planted and cared for. The following year, the trees will be pruned once they’re at least 11 metres tall.
In year 4, once the tress are 20 metres long with a diameter of 30 centimetres, every other tree in the area will be cut and sold to paper manufacturers and the energy industry. This process will provide space for individual trees to keep growing.
By year 8, another harvest will take place to make sure the trees have enough space and sunlight. These trees will most likely be used for parquet flooring and general timber use.
The final harvest happens in year 11, once the trees have a diameter of about 60 centimetres. This timber will be best for furniture, veneers, roofs and parquets. After this, the land will be ready for another harvest.
At the end of 23 years, TreeCoin predicts that 59,650 hectares of land will provisionally be acquired for reforestation, generating a projected profit of $1.1 billion. Up to 10 percent of the company’s profits will be set aside local social projects, such as water treatment, hospitals, childcare centers, foundations and associations for the disabled.