The first community-driven Cryptocurrency to fight Climate Change by reducing Greenhouse-Gas Emissions.
Zephyr is a community-driven Cryptocurrency that harnesses the collective economic power of token investors to impact the price for carbon emissions in regulatory carbon markets, consequently reducing global carbon emissions while also rewarding token holders. ZPHRGOV is the Zephyr community governance token for Zephyr Layer 1 (more below).
We aim to give innovative green technologies the competitive edge they need by rewriting the rules of the market. Zephyr (ZPHR) creates a new carbon market by issuing tokenized carbon emissions allowances that allow investors to profit directly from industries that are too slow to adopt carbon-neutral technologies. By reducing the surplus of allowances available to market participants in regulated emissions markets, such as the EU ETS, steep carbon price increases can be induced. This price appreciation can be passed on directly to investors using Zephyr (ZPHR), a Blockchain token, as a vehicle.
Over the long term, carbon prices would inevitably rise to a point where they trigger CO2 abatement, resulting in further carbon price appreciation and stimulation of investment in innovative green technologies while also rewarding ZPHR token investors with price appreciation. By making cheap CO2 emissions more expensive, Zephyr (ZPHR) helps create an economic level-playing field for innovative green technologies.
What is Zephyr?Zephyr is a community-driven Cryptocurrency that harnesses the collective economic power of token investors to impact the price for carbon emissions in regulatory carbon markets, consequently reducing global carbon emissions while also rewarding token holders.
Why Zephyr?Climate change is happening, and it already has devastating consequences on nature and humans alike. If we want to achieve a meaningful reduction in emissions, we need to act now. In our modern economy, change is primarily driven by economic incentives, whether for good or for bad. This means we need to ensure that carbon emissions are not free but come with a cost high enough to ensure they do not happen and capital is instead being used for sustainable technologies. Regulatory carbon emissions markets do precisely that: They put a price on carbon that companies have to pay for when polluting the atmosphere. Regulatory carbon emissions market exists all over the world today, but the largest market (by far) is the ETS system in Europe. We believe that blockchain technology and cryptocurrencies can be part of the solution rather than the problem concerning the climate crisis. Zephyr, therefore, aims to utilise the Zephyr token and the benefits of cryptocurrencies to harness the economic power of retail investors to give them a meaningful voice and representation on the regulatory carbon markets. Oh, we almost forgot: At the same time, we aim to provide retail investors access to the best performing commodity in recent years: Carbon emissions allowances.
How does it work?Zephyr aims to harness the power of crowd-investing and the transparency of blockchain technology to create a new player on the regulatory emissions markets powered by Zephyr Token holders. Today, regulatory emissions trading is a highly restricted venture with high costs. Common traders include large companies, banks and other institutions, all with different interests. Retail investors are being excluded from trading regulatory emissions allowances through these high-cost barriers. Consequently, retail investors (a.k.a. the general population) do not have any say in how much companies should pay for emissions, even though pollution affects everyone. Zephyr seeks to change this imbalance. By emitting Zephyr Tokens that are fully backed by EU ETS allowances (called EUAs), anyone can now join in and have a say in the regulatory trading markets. As more and more EUAs are introduced into the Zephyr ecosystem, companies that pollute the atmosphere will face increasing pollution costs and, consequently, have to engage with Zephyr token holders to buy more polluting rights. Thus, Zephyr token holders will collectively set the price of emissions that companies have to pay. To achieve this goal and provide a solid interface between the dynamic blockchain world and the more conservative emissions allowance trading world, Zephyr will work on two layers: Layer 1 is the blockchain layer: This includes all infrastructure required to manage and maintain the Zephyr Token ecosystem. Layer 2 is the emissions trading layer: Layer 2 will engage in traditional carbon trading and harness crowd investing from token holders to act with economic impact and, therefore, meaningfully affect emissions prices. Layer 2 will not operate autonomously but is bound by the automated minting process (see whitepaper) and instructions issued by Layer 1. This ensures the integrity of the Zephyr ecosystem.
https://i.imgur.com/6KD1Hdk.pngHow does the token minting process work?Zephyr token minting is 100% driven by user behaviour: Token holders get to decide how many emissions allowances are introduced into the Zephyr ecosystem. The minting process starts with users that deposit collateral in so-called Minting Buckets. Once a Minting Bucket has been filled, the Emissions Harvest commences; consequently, the funds will be locked in until the minting has been completed, either successfully or not successfully. During the Emissions Harvest, Zephyr will use the funds contained in the Minting Bucket to obtain the equivalent amount of EUAs from regulatory emissions trading markets. Suppose the Emissions Harvest has been successful and the corresponding EUAs have been successfully received. In that case, this means that the right to pollute the atmosphere has successfully been removed from the Emissions Market and is now locked into the ZPHR Ecosystem. Companies will now have to reduce their emissions accordingly or buy ZPHR and redeem the tokens at a premium to regain the right to pollute at higher costs. In case the Emissions Harvest has been successful, new tokens are issued. The users who have deposited collateral in the Minting Buckets will be issued new tokens, plus a premium.
https://i.imgur.com/d04DZcq.pngWhy the European ETS system?Even though Zephyr aims to expand into multiple carbon trading systems across the globe, the European Union's ETS provides an ideal basis for an initial token launch. Launched in 2005, the EU ETS is the world's first major carbon market and remains the biggest one. It accounts for almost 80% of the globally traded carbon volume. Furthermore, unlike other emissions trading systems, the EU ETS covers a wide range of industrial sectors, including the aviation industry: One of the fastest-growing pollutants within the economy.
https://i.imgur.com/SoTMe5V.pngWhat is the difference between Zephyr and voluntary carbon credit tokens (UPCO2, Moss Carbon Token)?Voluntary carbon credit tokens like UPCO2 or Moss Carbon Token only use voluntary carbon credits as token backing. These credits are very easy to buy by individual investors already, and there is no need for tokenisation. Voluntary carbon credits are being bought by companies and institutions that voluntarily aim to offset their emissions. Artificially inducing price appreciation in the voluntary carbon credit markets (as these tokens aim to do) make no sense since it will only drive voluntary off-setters away by the high costs. They also don't drive technological change since the entire system (as the name suggests) is voluntary and therefore does not possess any economic power to influence markets. Zephyr is the only token backed by regulatory carbon emissions allowances, which are difficult to access for retail investors but have a significant impact on the cost of emissions for companies.
What will initial funding be used for?Even though Zephyr Layer 1 can be developed and implemented using the cost-effectiveness and dynamics of blockchain technology, significant funding will be required to implement Zephyr 2 Layer fully. Layer 2 will act as the agent for Layer 1 on regulatory carbon markets. These markets face significant entry barriers. Layer 2 will have to be built up as a full-scaled institutional investor to gain access and execute trades effectively. Funding will therefore be used to allow full development of Layer 1 and Layer 2, including gaining regulatory licenses and approvals for regulatory carbon emissions trading, implementing KYC/AML measures as per EU regulations, as well as secure clearing access for regulatory carbon markets through associated financial institutions.
