JustCarbon (JCG) is An Intersting Blockchain Project Solving Major Problems
The creation and sale of carbon credits has become a huge industry over the past decade. Unfortunately, the carbon credit market has a lot of inefficiencies in it that make it difficult for businesses to sell their carbon credits on the open market. This has opened the door for a blockchain solution to emerge that can allow businesses helping the environment to receive much needed funding.
One such blockchain project that emerged is JustCarbon. It’s a marketplace that allows for the sale of tokenized, high quality carbon credits on the open market without the inefficiencies that plague the traditional carbon credit market.
What is JustCarbon (JCG)?
First of all, it’s difficult to really understand JustCarbon without understanding the carbon credit market and the idea of carbon credits. The general idea is that certain countries have carbon caps for certain businesses. For instance, a factory in a certain country may be capped at producing 150,000 tons of carbon emissions per year. However, the factory produces 200,000 tons of carbon emissions per year.
They can either reduce carbon emissions to 150,000 tons per year or they can purchase carbon credits that offset the difference. These carbon credits are produced by companies that reduce carbon in the atmosphere – one carbon credit is equal to one ton of carbon removed from the environment. With this in mind, the hypothetical factory mentioned earlier would have to purchase 50,000 carbon credits in order to be in good standing with their government.
It’s a decent enough system that aims to reduce carbon emissions. However, the marketplace for carbon credits is very segmented and inefficient. It’s difficult for producers of carbon credits to find buyers because of the segmented market and lack of a centralized marketplace.
JustCarbon solves this problem and a few other problems because it places all the carbon credits on the blockchain as a token. This means there’s no risk of resale of carbon credits and it allows carbon credits to settle at a natural price (set by an automatic market maker similar to the ones used in DeFi) rather than a higher price set by brokers and other middlemen.
The biggest benefit, however, is that it’s extremely easy for businesses to buy and sell carbon credits on the JustCarbon platform.
It’s important to differentiate between the carbon credit token (JCR) and the governance token for the decentralized autonomous organization (DAO) called JCG. Businesses can purchase JCR as a carbon credit on the blockchain whereas the project itself is managed by a DAO. The governance of the DAO is controlled by voting of those that hold JCG tokens.
What We Like About JustCarbon (JCG)
There’s a lot to like about JustCarbon. This section will explain some of the big advantages we see with this project and some of the points that we find very appealing about the project.
The first thing we like about this project is that it has doxxed founders knowledgeable in the industry.
That’s huge in the cryptocurrency industry. So many projects have anonymous founders, which is an almost sure sign that the project is a scam.
Doxxed founders give us enough assurance that this project is not a complete scam. Now, this does not mean the project will be a success. Plenty of businesses with public founders fail, but the fact the founders have attached their name to the project give us confidence that they are actively working to build this into a successful project.
It Actually Solves a Problem
We really like that JustCarbon actually solves a problem. The carbon credit marketplace is very inefficient and fragmented. The only current option for businesses to buy carbon credits is through a broker. Brokers do not work for free, so they add a commission to broker the sale of carbon credits.
An inefficiency like that is a huge opportunity for a project like JustCarbon. It’s even better because a blockchain solution is a perfect fit. The thing with a lot of blockchain projects is the blockchain is not necessarily a good fit for the industry.
That’s not the case with JustCarbon. The blockchain can greatly reduce a lot of the fraud that goes on in the carbon credit industry with brokers reselling already used carbon credits.
What We Don’t Like About JustCarbon (JCG)
There are some things we do not really like about JustCarbon. These issues relate mostly to operational and governance issues that we see as potentially being problematic.
DAOs Are a Horrible Form of Corporate Governance
Our first problem is that JustCarbon uses a DAO to govern the direction of the project. DAOs have become a popular trend in the past few years, but the thing with DAOs is that they are a horrible form of governance.
For one, DAOs are not really decentralized nor are they autonomous. They are essentially a worse form of a publicly traded company as issues are directly voted on by token holders. A publicly traded company allows shareholders to vote on board members who then make decisions and appoint executives. If the decisions (or execution by the executives) the board makes perform poorly, then the shareholders will vote to replace the board members.
A direct, rather than representative democracy, like that found in DAO is a horrible system of corporate governance. The masses of token holders have no industry expertise, so they cannot be relied upon to make sound corporate decisions.
Of course, DAOs are not usually direct democracies like that. What usually ends up happening is that the DAO votes on proposals that must then be approved by the executives of the project.
That’s not decentralized. It’s essentially submitting proposals and hoping the executives approve of the decisions.
What is even the point of having a DAO at that point?
Here’s the thing, DAOs are a marketing tactic. They aren’t decentralized nor are they autonomous. If they were decentralied and autonomous, then they would be a horrible system of corporate governance.
It’s a lose-lose situation either way.
This is why we hate to see projects that have a DAO. It’s really a recipe for disaster if the DAO ever does become autonomous and decentralized. We much prefer to see projects that simply have a foundation made up of board members that make decisions (ie. Ethereum).
Does Anyone Actually Use JustCarbon?
The other issue we have with JustCarbon relates to the use of JCR tokens and the marketplace. Do companies actually use the product offered by JustCarbon?
We see a handful of case studies about wildlife preserves and tree planting operations converting their carbon credits to JCR tokens. But do companies actually buy these tokens and use the marketplace?
We do not see any evidence of that.
Yes, it’s a new project, but it’s a little concerning when the company does not include the other half of the buying and selling process in their case study.
That said, we don’t actually know if companies buy JCR tokens because JustCarbon does not make this information easily accessible for the public. If companies are buying JCR carbon credit tokens, then that’s great. The project will likely continue to see success.
Is JCG a Good Investment?
We are torn on whether or not JCG is a good investment. We really like the idea of the project and that it solves a real problem with a solution that works.
However, we do have some concerns about the use of a DAO for corporate governance and the actual use of the project.
Our verdict on JCG is that it’s a good small market cap cryptocurrency investment. You obviously don’t want to put all your money into this project as there’s tremendous risk with such a small project.
But we really could see this project taking off in the next few years, which is enough to warrant a small investment with money that you can afford to lose.
To summarize, JustCarbon is a project attempting to solve a major problem in the carbon credit industry by making it easier for businesses to buy and sell carbon credits. The project has a lot of good things going for it and is one of the more promising small market cap cryptocurrencies available in 2022.