Blockchain for Social Impact
Impactio: Blockchain Case Study for Philanthropy & Sustainability
Impactio: Blockchain Case Study for Philanthropy & Sustainability
An initiative that brings together project leaders, subject matter experts, and funders to solve the $2.5 trillion philanthropy gap and realize high-impact, sustainable development goals.
Realizing the UN’s Sustainable Development Goals by 2030
The 17 Sustainable Development Goals (SDGs) created by the United Nations General Assembly is the world’s best plan to build a better reality for everything and everyone on our planet by 2030. Adopted by all United Nations Member States in 2015, the SDGs are a call to action for all countries – poor, rich, and middle-income – to promote prosperity while protecting the environment. The SDGs recognize that ending poverty must go hand-in-hand with strategies that build economic growth and address a range of social needs, including education, health, equality, and job opportunities while tackling climate change and working to preserve our oceans and forests.
Currently, humanity faces a $2.5 trillion funding gap to achieve the SDGs by 2030. This gap is not due to a lack of capital, but rather, a misalignment between the funding available and sustainable projects that need financing. Blackrock Investments alone leverages $6 trillion to call for investable businesses to prove a positive social impact. According to the WWF, it would cost $3 trillion per year to achieve the SDGs, provided the pre-existing, annualized, global contributions of $140 billion in aid and the $7.8 billion in philanthropic donations are utilized for development projects.
How can we correct the capital imbalance between impactful projects in need and capable financiers looking for sustainable social impact projects?
Changing Trends in the Charity Sector
Being socially responsible is no longer an option for companies — it’s a must. In 2017, donations to charity reached an all-time high in the US, with an estimated USD 410 billion donated to various causes by groups and individuals. According to the Millennial Impact Report, millennials support five nonprofits a year on average. Millennials have a new expectation alongside their charitable donations: Transparency and accountability. 90% of surveyed Millennials would stop giving if they distrusted an organization. As the informed public continues to lose trust in mainstream charities, they look for another place to source meaningful projects to support.
What is lacking is a robust mechanism for linking these private dollars to viable, large scale, SDG-advancing projects. The imperative is clear: Put the projects on the table. The capital will follow.
Boston Consulting Group, Centre for Impact
The Ethereum Solution
ConsenSys and WWF teamed up to launch Impactio, a project curation and funding platform for the Sustainable Development Goals. Impactio utilizes blockchain technology and a tokenization framework to maximize collaboration between funders/investors, subject-matter experts, and organizations to bring social impact projects to life.
The platform uses a system inspired by ConsenSys’ research on Token Curated Registry (TCR) to curate a list of high-impact, high-potential projects to present to potential funders. Overall, Impactio creates a positive network effect through consensus objective-decision making, where experts perform due diligence collaboratively, and donors feel confident in supporting approved projects.
Impactio Connects Three User Types:
- Funders and Investors
Funding entities can minimize their project search costs by leveraging a curated list of impact opportunities to support.
- Curators / Subject-Matter Experts
Experts may log onto the unified platform to share their expertise with leading impactful projects.
- Project Leaders
On Impactio, Project Leaders gain real-time feedback on their application so that they can iterate toward a submitting one standardized, high-quality application to funders.
- Funders and Investors
How It Works
Impactio facilitates transparent application submission, endorsement, assessment, selection, and funding in a way that leverages a decentralized knowledge pool of subject matter experts across the social and commercial sectors. By facilitating the connection of funders, experts, and project leaders, Impactio makes it easier than ever to coordinate the discovery, assessment, and funding of sustainable projects looking to make a significant impact on a global scale.
Impactio’s Democratic Selection Process
- Project leaders submit their projects with clear objectives based on the UN’s 17 Sustainable Development Goals (SDGs).
- A global network of subject matter experts related to the topic receives Impactio Tokens into their digital wallet.
- Curators are then encouraged to provide constructive feedback for each project.
- Project leaders can use the tips to fine-tune their projects, while their causes stand a higher chance to come to fruition. This openness and access to expertise is invaluable and is arguably the most compelling feature of the platform and its workflow.
- Once curators have reviewed the projects with the project leaders and their peers, it is critical at this stage for decisions to be made objectively and allows for all curators to have a say. This is where a TCR — a Token Curated Registry — enters the process.
Token curated registration
- Each TCR has an internal token, which is used to coordinate and incentivize honest behavior.
- Curators stake their tokens to back a project. Curators who wish to dispute that project stake the same amount of tokens. If no curators object a project, it will be approved and surfaced for donors to decide on funding.
- If a project receives objections, it goes through a dispute process:
- Curators that object a project stake the same amount of tokens as curators backing the project.
- A vote is held, where the remaining curators assess the merits of the project
- The outcome of the vote resolves the challenge
- If a project is approved by voting consensus, the curator supporting the project will have their staked tokens refunded and will receive additional tokens as a reward for investing their time and commitment in backing a project.
- Fellow curators who voted for the approved project will also receive tokens as a reward for their due diligence in assessing and resolving a challenge. The rewards are paid from the stake of the curator that challenged the project, a key measure to disincentivize unmotivated and unreasonable challenges.
- If a project is declined by voting consensus, the challenger receives their staked tokens and earn reward tokens, while the curator supporting the project loses their staked tokens.
- This mechanism ensures that only worthy projects are backed and ultimately surfaced to donors.
This democratic selection process takes six weeks maximum. The selected projects that make it to the Impactio Curated List go through a rigorous peer-review process by subject-matter experts from around the world. This gives philanthropists, investors, and donors more confidence in the validity and trustworthiness of a project.
The Role of Ethereum
Impactio was initially tested and prototyped on Ethereum’s Rinkeby test network and currently uses an Enterprise Ethereum network hosted on Kaleido. Impactio uses the Token Curated Registry smart contract protocol to ensure that its application submission, assessment, and selection processes are tamper-proof and transparent.
Impactio experimented for two years across multiple pilots to achieve what it has today. During this time, the platform established product-market fit and improved the state of the user experience. The first live pilot further validated our vision with significant engagement and results:
- Projects submitted from 17 countries
- 70 curators across 20+ disciplines and areas of expertise
- 250+ hours of curation across the four phases of the application selection process
- 500+ curation actions completed by the curators to compile the curated list
During a seven-week pilot program from July 1 to August 21, Impactio attracted over 100 participants who approved 17 social and environmental projects through its token-based curation process.
- 34 projects submitted and reviewed
- 30 projects endorsed
- 21 projects challenged
- 195 votes on challenged projects
- 17 projects made it to the Impactio Curated List
- During the review phase, there were over 220 value-adding interactions on the platform between curators and project leaders.
Sample Successful Impactio Project
Xinnani: From ideation to fully funded social impact project
Gabriella, an Impactio user from India, presented an idea: Growing native seaweed on land. Xinnani was a land-based seaweed cultivation unit that can be set up on shrimp farms to help filter effluents, which can cause algal blooms and dead zones. Growing seaweed on land is a more sustainable option than exploiting seaweed stocks in inshore waters and outsourcing these units to local coastal communities.
Typically, a project like this would not make it through traditional grant funding processes as a very early-stage concept.
Using Impactio, Gabriella updated her project application after receiving feedback from 3 curators. Xinnani became one of the first projects endorsed by Horace Wu, who staked 200 tokens and praised the project for its “clear actions,” “thorough…[research],” and “immediate…impact”. As this project was not challenged or flagged for further review, it made it straight into the Impactio Curated List. As a result, this project has been fully funded through the platform and is about to kick off implementation and impact tracking.
Moving forward, Impactio will iterate from feedback provided during the live pilot toward a platform that can support new potential partner-led developments. The team will also implement new features, including the following:
- Threaded comments and upvotes/downvotes
- Project tagging and automated matching with Curators and Funders interests
- Revised curation process with multiple
- endorsements and challenges
- Improved project content visualization (summaries, infographics, video content)
To better support partner challenges and functionality on the platform, Impactio will add the following:
- Impact Reporting and tracking
- Tokenized donations and fundraising
- More rewards to Curators throughout the project lifecycle, “Bounties” and “kudos”
- Multiple concurrent challenges
- Advanced admin and platform governance features
Impactio seeks to work with organizations interested in curating solutions across the social sector and invites new conversations to further improve these solutions.
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Learn more about Impactio
- WWF NewsWWF and ConsenSys launch Blockchain platform to accelerate closing the United Nations Sustainable Development Goals funding gap
- Global ShakersImpactio: Bringing Transparency Into Philanthropy via Blockchain
- Token PostConsenSys, WWF launch Impactio blockchain
- Yahoo FinanceWorld Wide Fund for Nature (WWF) and ConsenSys Launch Blockchain Platform to Accelerate Closing the United Nations Sustainable Development Goals Funding Gap
- Impact AlphaCan blockchain play matchmaker in financing the UN Global Goals?
- Use The BitcoinConsenSys And World Wildlife Fund Launch Impactio Blockchain Philanthropy Platform
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