EFFORCE makes it simple to tokenize energy savings, and there are a few parts to this economic ecosystem. To begin with, investors are able to back energy savings via a system that is similar to Energy Service Companies (E.S.Co) which use Energy Performance Contracts (EPC) for a similar function.
An EPC allows returns to be created for investors when they post the capital for an energy savings project. EFFORCE is taking this model, adding blockchain and NFTs, and giving people greater access to the free market.
The process is pretty simple – and investor is able to help another entity, let’s say a factory, save money on energy. In return, the investor gains from the investment they made. Instead of buying a bond, the investor helps another entity save money on energy via energy efficiency systems, and both are rewarded.
EFFORCE is taking out the intermediaries, and making it easier for smaller investors to back energy efficiency projects, and also create gains in the form of cost savings. Investors will be paid back in tokens, and the beneficiary of the energy savings will see costs drop.
It is a win-win for everyone, including society as a whole.
A Complex System We Need
Much like Venture Capital deals and IPO, there aren’t many people who can invest in large-scale energy efficiency projects. The market is specialized, and the amount of money needed is relatively large.
According to EFFORCE,
The market currently works this way:
- Before carrying out an energy efficiency project, any entity that owns an energy system pays its bill to a private or state-owned supplier of electricity and gas.
- The E.S.Co evaluates the energy systems owned by the Beneficiary and implements them, in order to invest its financial resources in redevelopment interventions or energy efficiency improvement of plants or buildings.
- For the entire duration of the contract, the Beneficiary pays a part of the energy savings generated to the E.s.Co. This gives a return on the initial investment.
- At the end of the contract, the Beneficiary can take full advantage of the savings and the technology installed.
- The financial investment is fully borne by the E.S.Co. The Beneficiary obtains an immediate guaranteed reduction of energy costs and, at the end of the contract, benefits from a new and already installed efficiency improvement intervention.
- EFFORCE steps into the role of the E.S.Co., and allows its community of investors to buy in. There are a few big upsides to this new model.
The first impact of EFFORCE’s business model is awareness.
Most people simply don’t know they can invest in energy efficiency, make returns, and help the global energy system cope with hard times. Secondly, EFFORCE should drive more investment in the energy efficiency sector, as smaller investors can enter the space.
Unlike many forms of investment, retail investment in local energy efficiency projects will be positive in a person’s everyday life. Let’s say that a person wants to help a community infrastructure, like a downtown area, be more energy efficient.
With the business model EFFORCE created, not only could the investor gain from their investment in financial terms, their community would use less energy, and free up capital for other improvements.
On the infrastructure side, there is no need to use debt, and when the cost savings come, the repayments help people that are likely to support the businesses in other ways.
EFFORCE: The Features
EFFORCE creates a space for blockchain to help bring together investors of all sizes, and any economic entity that can benefit from energy savings. There are no losers in this ecosystem, as we need to save all the energy we can.
In addition, EFFORCE is working on the Energy Performance Smart Contract, a first in the industry. Investors will be given the ability to use their WOZX tokens to support NFT-based energy efficiency projects, which can be local or anywhere in the world.
According to EFFORCE,
In a nutshell the contribution process works like this:
- A project is selected and approved to get funded through the EFFORCE platform. The implementation cost is the amount requested by the Beneficiary or ESCo to fund that given project. This amount, expressed in USD, gets divided in small shares represented by NFTs, each one priced in USDC.
- WOZX holders wanting to contribute to the project are invited to lock their tokens in order to gain the right to mint the desired amount of NFTs. The amount of WOZX to be locked for each mint is declared in the project description.
- The minting contract is deployed on-chain and activated on a declared date. At this point token lockers can decide to mint the NFT for the minting price in USDC. NFTs are now in the wallet of the minter.
- The minting contract is terminated, and no more minting is possible. The implementation of the project starts. A staking contract reserved for the NFT of the project is deployed on-chain and activated. NFT holders can now stake their NFTs.
- The project is implemented and starts generating returns. The Beneficiary or the ESCo converts these returns in USDC. USDC are deposited on a smart contract on-chain which mints mWOZ with a ratio of 1:1 so that rewards tokens are fully backed and instantly swappable with USDC. The Beneficiary or the ESCo directly deposits mWOZ in the staking contract distributing rewards to NFT staked in this way. Only staked NFTs can earn rewards.
- The project is completed. The staking contract is terminated, NFTs are only unstakable and WOZX in the locking contract are unlocked.
Building Better Support Systems
EFFORCE creates valuable connections, in addition to IP that could be deployed into other areas. While the first phase of EFFORCE’s growth will be in the area of energy efficiency, the software and platforms it is creating could be used in any area where group investments are made.
For example, the platform that EFFORCE created is geared for energy investments, but it could also be used for funding early-stage startups. The markets are different, but the challenges that small investors face in the VC market are similar.
When more smaller investors are able to enter the marketplace, the ways that capital can flow multiply. In essence, EFFORCE created a new way to support novel investments, and give people more of a say in where money is spent.
In today’s energy-poor world, any gains in efficiency are welcome. When those gains help smaller investors to invest both globally and locally, the deal only gets better. We aren’t going to have another 100 years of nearly free energy, so now is the time to embrace energy efficiency.