Our flagship offering is PARYS™, carbon tokenized as a Real World Asset (RWA).
Our flagship offering is PARYS™, carbon tokenized as a Real World Asset (RWA).
The Parisii™ Web3 AI Agent Architecture™ centers around the PARYS™ Carbon RWA, a successful DeFi/ReFi forging of Carbon Allowances and Jurisdictional Carbon Offsets into Real World Assets at global scale with unrivaled liquidity, agile price discovery, custodial precision, and global regulatory compliance.
The $130T Climate Finance gap needed to implement Paris Agreement through 2050 will not be addressed by historical Financial Institution based stock and bond issuance and investment alone. It will require a bridging of existing financial mechanisms with what is called Web3, the financial mechanism that has created $2.5T in new value over the last 4 years.
The financial componentry of Web3, otherwise called Decentralized Finance (DeFi), now including Regenerative Finance (ReFi), is the pavement by which we can build a financial highway to NetZero by 2050. No other financial means will deliver these results. One most promising bridge to map the existing financial infrastructure to Paris goals is the Parisii™ Web3 platform, and more specifically a patent-pending DeFi / ReFi instrumentation known as the PARYS™ Carbon RWA.
PARYS™ Carbon RWA is the world's first and only government issued carbon Real World Asset. PARYS™ is asset-backed by a "basket of carbon", which includes European Union Allowances (EUAs have delivered 28.27% APY returns over the past decade), Jurisdictional Carbon Offsets (projected 40% APY long-term by CDP), Internationally Transferred Mitigation Outcomes (ITMOs), and Carbon Border Adjustment Mechanisms (CBAMs), as available. EUAs allow access to an $850B annual trading market with over $200M in daily liquidity, and can be redeemed in crypto, EUAs, or EUROs as needed. Due to the new MiCA legalization of crypto in the European Union (EU), PARYS™ aims to be the world’s first legally issued carbon-based Real World Asset under the EU regulatory framework. PARYS™ is currently the only fully regulated financial mechanism in Web3 that plans to quantify, track and assist in real-world facilitation of this $130T global investment expected over the next 26 years to implement the Paris Agreement in achieving NetZero.
What is a Real World Asset?
Real World Asset (RWA) tokenization is an emerging concept that traces back to the advent of blockchain technology. The journey began with Bitcoin's introduction in 2009, which unveiled a decentralized, secure, and transparent ledger system.
This groundbreaking technology laid the foundation for turning physical assets into digital tokens recorded on a blockchain. However, the real leap forward came with Ethereum in 2015, introducing smart contracts —self-executing agreements coded directly onto the blockchain.
With smart contracts, it became possible to digitally represent physical assets like real estate, art, and commodities, bridging the gap between the physical and digital worlds. The potential for this technology to impact global economies and social structures quickly became apparent.
Why Do RWAs Matter?
To understand the significance of RWA tokenization, picture a large pizza you want to share with friends. Instead of giving each friend the whole pizza, you slice it into pieces, with each slice representing part of the whole.
Tokenization works similarly with assets. When an asset is tokenized, it’s divided into smaller parts called “tokens,” each representing a share of the asset. These tokens can represent anything valuable, from real estate to intellectual property. Managed and traded using blockchain technology, these tokens ensure secure and transparent ownership records, making assets more accessible, liquid, and tradable globally.
The Impact of Tokenization
Consider the real estate market in cities like New York or London. A $10 million property could be divided into 10 million tokens at $1 each. This enables individuals to invest as little as $100, owning a slice of high-value real estate.
Tokenization brings liquidity to the real estate market, which is traditionally illiquid and difficult for smaller investors to access. According to Markets and Markets, the global real estate tokenization market is projected to reach $1.4 trillion by 2026, growing at a CAGR of 22.8%.
The same principle applies to commodities. An ounce of gold worth $2,000 can be tokenized into 2,000 shares at $1 each. This lowers the barrier to entry, allowing more investors to gain exposure to commodities without needing significant capital. Grand View Research forecasts the tokenized commodities market to reach $4.5 billion by 2025.
Tokenization also empowers creators to monetize their intellectual property. A patent valued at $1 million could be divided into 1 million tokens at $1 each. Investors can purchase these tokens and share in the revenue generated, rewarding creators while opening up investment opportunities to a broader audience. Juniper Research predicts the market for tokenized intellectual property rights will reach $320 million by 2025.
What are European Union Allowances?
EUAs are an ideal asset class to tokenize as an RWA. According to Chainlink Co-Founder Sergey Nazarov, Real World Assets have already surpassed DeFi in assets under management. Sergey believes RWAs will flip cryptocurrency for total value over the next 1-3 years. Chainlink is adopting RWA with companies including Fidelity and is specifically trying to adopt carbon as an RWA. Since private citizens and companies outside the EU can't purchase European Union Allowances (EUAs) directly, the best performing carbon instrument on the planet is destined to become an RWA for global investment purposes.
What are Jurisdictional Carbon Offsets?
A jurisdictional carbon offset is a type of carbon offset that is generated by reducing greenhouse gas emissions at a jurisdictional level, such as a state, federal, province, or country, rather than at a specific project site. This approach involves implementing policies and measures across an entire region to reduce emissions from deforestation, forest degradation, and other land-use changes. It provides larger orchestrated resources than a private funded project.
Key features of Jurisdictional Carbon offsets:
Scale: Jurisdictional carbon offsets cover a larger area and involve broader policies, making them more impactful in terms of emission reductions.
Government Involvement: These offsets often require the cooperation and commitment of local, federal or national governments to enforce regulations and promote sustainable land-use practices. They provide more impactful resources to include sustaining the forests they seek to protect.
Integration with National Goals: Jurisdictional carbon offsets are designed to align with a country's climate goals and contribute to national efforts to reduce emissions, along with aligning with international goals and commitments.
Verification: The emissions reductions achieved through jurisdictional programs are verified by independent third parties to ensure credibility and transparency.
Governance: Involves government or federal policies and measures to reduce emissions. Therefore, State or federal departments and organizations are created and laws passed to ensure the consistency, transparency and credibility of the carbon offsets generated.
Primary benefits of Jurisdictional Carbon offsets:
Broader Impact: By addressing emissions at a larger scale, jurisdictional carbon offsets can lead to more significant and lasting environmental benefits, whilst offsetting emissions.
Policy Integration: These offsets help integrate climate goals into broader land-use policies, promoting sustainable development both on a federal, state and international level.
Incentives for Governments: Jurisdictional carbon offsets provide financial incentives for governments to implement and maintain effective climate policies.
Accountability and transparency: A state or federal entity is accountable in its office and transparency is key. Laws will be passed and oversight of activities undertaken.
What are Internationally Transferred Mitigation Outcomes?
Internationally Transferred Mitigation Outcomes (ITMOs) are a mechanism established under Article 6 of the Paris Agreement that allows countries to transfer greenhouse gas (GHG) emission reductions or removals achieved in one country to another country to help meet its own climate commitments. These outcomes are a specific type of carbon offset designed to facilitate international cooperation in reducing global emissions. ITMOs are intended to replace older forms of international carbon offsets, such as those from the Kyoto Protocol's Clean Development Mechanism.
The core principle of ITMOs is that a country which reduces its emissions beyond its own nationally determined contribution (NDC) target can transfer the excess reduction to another country that needs to meet its own NDC. This transfer can be used by the receiving country to count towards its own climate target, potentially making it easier and more cost-effective to achieve its goals. The mechanism is designed to be decentralized, allowing countries to enter into bilateral or multilateral cooperative approaches to facilitate these transfers.
To ensure environmental integrity and prevent double-counting of emission reductions, the Paris Agreement requires "corresponding adjustments". This means the country that hosts the emission reduction project must deduct the transferred amount from its own national inventory, while the receiving country can add it to its inventory if it chooses to count it towards its NDC. ITMOs must also satisfy requirements of being "real, verified and additional," meaning the emission reductions would not have occurred without the financial incentive provided by the carbon offset revenue.
The framework for ITMOs was initially established at COP26 in 2021 and further developed at COP27 in 2022, with the goal of creating a rulebook to guide implementation. While the mechanism is still evolving, it holds the potential to channel significant finance and technology towards developing countries, support sustainable development, and contribute to more ambitious global climate action.
What is the Carbon Border Adjustment Mechanism?
The Carbon Border Adjustment Mechanism (CBAM) is the European Union's pioneering policy designed to address carbon leakage, which occurs when industries move production to countries with less stringent climate regulations, potentially increasing global emissions. It functions as a carbon border tax, requiring EU importers of specific carbon-intensive goods to purchase CBAM certificates that correspond to the embedded carbon emissions in their imports, thereby aligning the carbon cost of imported products with that of goods produced within the EU under the EU Emissions Trading System (EU ETS).
The mechanism is part of the EU's "Fit for 55" package and aims to level the playing field for EU producers while encouraging cleaner industrial production globally. CBAM is being implemented in phases, starting with a reporting obligation from October 2023, with the full payment regime for covered goods beginning in 2026.
PARYS™ Carbon RWA Financial Analysis
PARYS™ is conceived as a digital representation of real-world carbon assets, primarily EUAs and Jurisdictional Carbon Offsets with inclusion of other government issued carbon instruments as appropriate, operating on blockchain. To understand the real-world manifestation, we need to examine the PARYS™ components and how they interact with existing financial and environmental markets.
In essence, PARYS™ can be seen as a digital wrapper around real-world carbon assets - primarily EUAs and Jurisdictional Carbon Offsets. It seeks to enhance the existing carbon markets by leveraging blockchain technology to improve transparency, accessibility, and liquidity, ultimately promoting climate action by channeling investment towards emissions reduction initiatives.
The PARYS™ Protocol real-world impact hinges on seamless interaction with existing carbon markets and regulatory frameworks. The success of PARYS™ will depend on its ability to navigate the complexities of these interconnected systems and fostering trust while demonstrating contribution to a more sustainable future.
The ICE Global Carbon Futures Index has produced a higher return than indices representing U.S. equities, U.S. bonds, energy futures and precious metals futures. While it has a standard deviation (volatility) that is second highest to traditional energy, it still compares favorably to these other asset classes on the basis of risk/return metrics such as the Sharpe and Sortino Ratios. For more information regarding the ICE Global Carbon Futures historical performance, click here.
European Union Allowances (EUAs) have increased nearly 30% per year since 2015. The EU has recently voted to expand their carbon market from 40% of businesses to 60% of businesses that are subject to EU-ETS inclusion. This will increase the participants in the $850B EU-ETS program by 50% in the next 3 years. In addition, the EU has adopted the Carbon Border Adjustment Mechanism (CBAM), which requires any company outside the EU that imports products and/or services to purchase EUAs to cover their carbon emissions. These two significant measures, along with the reduction of EUA issuance annually to reach NetZero by 2050, will cause the price of EUAs to continue to increase annually for the next 3 decades, analysts predict.
The ICECRBNT (ICE Global Carbon Futures Index) has had an annualized return of 28.27% from 12/31/13 to 6/30/22, as compared to 11.01% for the ICEUST5T (NYSE U.S. 500 Index), 1.92% for the US00 (30-Year U.S. Treasury Bond Continuous Contract), -1.18% for the MLCXENTR (ICE BofAML Commodity Index eXtra ENergy Total Return), and 3.65% for the MLCXPMTR (ICE BofAML Commodity Index eXtra Precious Metals Total Return).
PARYS™ Carbon RWA Patent Application
For more information on PARYS™, an extraordinary Web3 financial instrument for Climate Change abatement, please review the PARYS™ Carbon RWA Patent Application. Intellectual Property managed by Perkins Coie LLP.
Chris Waller, US Fed Reserve Board of Governors - Feb 2023
Bank of America - Jan 2023
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