Dear community members and token holders. Since the June 25th announcement that our initial mainnet technology has been deployed, we have been hard at work testing and implementing optimizations and new functionality on the blockchain. At the same time, our dialogue with enterprise partners gearing up to deploy on the APEX Network blockchain is evolving. Use cases are becoming more clearly defined, and software implementation is taking shape. Through this progress report we wish to share an updated overview of the status of our work. First of all we would like to delve into further details about one of our most mature pilots, before disclosing details about both a previously unnamed pilot enterprise and also a company that we are very excited to be able to disclose cooperation with for the first time!

Enterprise Pilots — Progress & Annoucements

Treasure Carbon is the most mature pilot, and their use case is well defined. They are bringing carbon credit assets onto the APEX Network blockchain, implementing a record based system that pegs one carbon credit to one asset token on our blockchain. Treasure Carbon will be first in the world to tokenize a Carbon Fund, meaning that the investors’ shares in the fund will be determined by the amount of tokenized assets they hold. For such a use case they will obviously not be mapping carbon credits to CPX directly, but will be issuing a new asset on the blockchain which will act like an escrow.

Schematic overview of carbon asset tokenization

The tokenized asset will represent a transferable ownership certificate, and the approximately $20M fund itself allows investment in a variety of carbon assets inside and outside of China. This is done to provide easier access to these assets at a discounted price as these assets are currently exchange traded. In this regard the fund resembles an ETF. The current government run exchanges require a minimum capital of $1M, while the new structure will have no lower capital boundaries for participation.

Direct investments in the fund will legally not be open to public participation, as this would too closely resemble an STO, and custom contracts will be required. However, after the initial offering it will be possible for the first round of investors to transfer their tokenized assets to other persons. The initial carbon assets sold through the fund will come at a 20% discount versus current market price on regulated exchanges. The reason for this is that they are selling carbon assets that are already on their balance sheets — as they already hold more than $50M worth of carbon assets they are looking for increased liquidity. The remaining assets they will retain, as they expect them to appreciate by 2–3x over the next couple of years based on their industry research.

Preview of carbon asset management application

Many of the above details have little to do with traditional “crypto”, but are provided as an insight into the carbon market and how Treasure Carbon is thinking going into blockchain technology. The goal of the fund is to increase liquidity in carbon asset trading, and for the investors to realize returns by speculating on the future appreciation of carbon assets. The possibility of carbon asset fund tokens being traded on the future APEX Network DEX depends on an assessment of how STO-like the construction is judged to be, compared to current and upcoming regulations.

In addition to the above, Treasure Carbon wants APEX Network to develop a protocol for them that enforces several different types of restrictions within the carbon fund like lockups for the investments. Some of Treasure Carbon’s potential use cases may even require us to add additional functionality, as some assets deployed on the APEX Network blockchain may need to become non-fungible (similar to ERC-721 on Ethereum), where each individual tokenized asset remains unique. All together, the use cases and desires of the company make carbon assets and blockchain a natural fit.

Treasure Carbon — schematic implementation

Treasure Carbon is currently deploying the APEX Network blockchain as a private chain to get familiar with its operations and testing applications, and they are looking to do test deployment of carbon assets on our public blockchain fairly soon.