18th Jun 2024 Gemini 1.5 Pro
Maex Ament is a serial entrepreneur and the founder of Crane Earth, an early-stage VC fund based in London. Crane Earth invests in projects at the intersection of Web3 and climate action, with a focus on leveraging the power of decentralization for real-world impact. Maex's extensive experience in both the traditional finance and blockchain spaces, including his work at SAP and founding Centrifuge, a blockchain protocol for real-world assets, informs Crane Earth's investment thesis.
Crane Earth believes that moving assets on-chain, and eventually originating them on-chain, is a fundamental shift with the potential to revolutionize industries, particularly climate finance. This transition brings numerous benefits, including increased transparency, reduced reliance on intermediaries, and enhanced efficiency in financial transactions.
"Well, I think there's a couple of things that make objects and business easier on-chain. There's a typical, we don't need all those middlemen anymore, right? And this is a problem. If you finance, specifically in finance, there's dozens of parties in the middle that take a little bit the basis point here and another basis point here for insurance for payment agent for you pick it dozens of reasons well we can have that on chain and smart contracts and the visibility to be on chain just solve that or at least reduce it makes it cheaper for all parties involved."
The ability to program values into digital assets, ensuring transparency and automated distribution of funds, is another key aspect of this shift. Maex emphasizes the potential of this technology to empower communities directly involved in climate action projects.
Maex is particularly passionate about the potential of blockchain technology to revolutionize carbon markets. He argues that the current carbon market infrastructure, relying heavily on traditional systems, is inefficient and lacks the transparency needed to build trust. He sees on-chain carbon markets as a solution, enabling greater transparency and traceability of carbon credits, ultimately restoring buyer confidence in a market currently facing skepticism.
"Why do we believe that carbon needs to be on chain? We picked a few, but the most important one is there is no real infrastructure out there yet if we forget about web 3 there's just here's nothing there's some fax machines some excel sheets and some consulting companies that's the that's the carbon landscape and i know there's a few startups that would disagree but that's that's how i see the world so i think we have a responsibility to build it on the right foundation and the right foundation is for the reasons we stated before web3 decentralized immutable transparent less middleman all that good stuff so that's why i'm still bullish even if we are in the winter that this is the right uh the right way and we"
Maex envisions a future where carbon credits originate directly on-chain, bypassing the need for existing registries and fostering greater trust and accountability within the market.
Maex identifies several opportunities in the ReFi space, particularly within the carbon markets. He sees significant potential in projects focused on on-chain origination of carbon credits, moving beyond simply bridging existing markets on-chain. He also highlights the importance of developing robust on-chain MRV (measurement, reporting, verification) systems, which are crucial for ensuring the legitimacy and integrity of carbon credits.
Crane Earth is particularly interested in projects like Open Forest Protocol, which leverages blockchain technology and decentralized networks for verifying tree planting initiatives. Maex also sees promise in emerging MRV technologies for blue carbon, agriculture, and other areas with significant climate impact potential.
"I do believe some MRVs interesting in the tech area when it comes to enhance rock weathering or other areas. So we see quite some specialized startups in that space. Agriculture is as well something which has some powerful impact. So yeah, those are some places we see."
Maex acknowledges the current challenges and skepticism surrounding carbon markets. However, he remains optimistic about their potential role in addressing the climate crisis, particularly when enhanced by blockchain technology and a focus on transparency.
Crane Earth's investment strategy reflects its belief in the transformative potential of Web3 technologies for climate action. As a leading investor in the ReFi space, Crane Earth actively seeks out and supports early-stage projects with a strong Web3 focus, particularly those addressing critical gaps in areas like on-chain carbon markets and MRV.
Maex emphasizes the importance of entrepreneurs having a clear vision for how they plan to leverage Web3 technologies to create real-world impact. Crane Earth's portfolio reflects this approach, with investments in companies like Fence Finance, a protocol for spinning up on-chain debt facilities.
"And why do we believe this is somewhat related to ReFi or our Crane Earth thesis? Because one of the major issues that we saw in my centrifuge days, but as well over the last years as investor, is that we're not getting enough money into into certain areas, into the climate space in that case, into project developers, to plant trees, to build solar panels, project finance, whatever it is."
This investment highlights Crane Earth's commitment to supporting infrastructure projects that can unlock greater capital flow into the climate action space, particularly for smaller projects often overlooked by traditional financing models.
Maex acknowledges the unique challenges of investing in Web3 projects, particularly when it comes to navigating the intersection of traditional equity and tokens. He advises entrepreneurs to be mindful of the potential for conflicting priorities when investors hold both equity in a company and tokens in a related network.
"But there got to be at some point in time a decision between the two. I do not believe that It's helpful to have equity in a company, and at the same time token in a token network both are live because very likely they're conflicting uh priorities like this is a for-profit um maybe there's some consulting stuff often going on ahead those situations and completely different incentives than maximizing here the token and scaling the token Network so I do not believe that the same parties should hold equity and token in the same project I just don't think that works"
Maex believes that ultimately, a choice needs to be made to ensure alignment of incentives. While he understands the investor perspective of seeking both forms of investment as a safeguard, he advocates for a cleaner approach where either equity or tokens become the primary vehicle for value capture and participation in a project's success. This approach, he argues, fosters greater alignment and avoids potential conflicts of interest between investors and the broader community a project aims to serve.
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