Crypto Carbon Credits Exchange 1GCX Closes Record $2 Billion Deal

Crypto carbon credit exchange 1GCX partnered with T3 Trading, raised $2 billion in assets under management (AUM) and set up a $100 million liquidity pool to facilitate carbon credit transactions.

1GCX is a digital asset exchange that offers trading in cryptocurrency, commodities and carbon offsets.

T3 Trading is a proprietary trading firm that invests in cryptocurrency and carbon offsets.

With their partnership, carbon credits or carbon offsets meet crypto. It will combine digital assets and carbon credits to capitalize on the growing interest of investors in both sectors.

Promote liquidity on carbon credit exchanges

With ~$2 billion in AUM and 100 million dollars in liquidity dedicated to carbon credits, the T3 fund seeks to improve liquidity on the 1GCX carbon credit exchange.

The funding will help pump revenue for the growing carbon credit market. It will also further the 1GCX goal of establishing a standard for buying and selling carbon credits.

As for the exchange’s president and COO, Michael Wilson, he stated that:

“Carbon credits have the potential to scale into a multi-trillion dollar market over the next few years, but the market opportunity remains relatively untapped as the sector continues to mature…”

He further said that with T3 Research as its third-party liquidity provider, 1GCX will drive price discovery and trading volume in the voluntary carbon market.

More importantly, the platform will help normalize supply and demand for carbon credits on the chain.

The raised fund for tokenized carbon credits made the deal possible. It is also driven by the growing interest from institutional investors such as pension schemes for the securities.

But there are a couple of risks associated with carbon credits as an asset class.

One is the volatility of this financial instrument. There is also criticism about how good these credits are for reducing global warming.

Add to this another issue about liquidity: carbon credits are illiquid products like digital assets.

This is where 1GCX comes in to offer a solution – tokenization of carbon credits for liquidity.

Marrying Carbon Credits and Cryptocurrencies

Both 1GCX and T3 Trading have tried some related trading pairs that marry equities and cryptocurrencies.

Their main idea is to attract institutions to both markets, including those familiar with carbon assets but new to digital assets. They will do this by creating a series of liquidity pools to reduce market transactions.

Both firms believe there is a strong case for tokenizing carbon credits to build the right marketplace.

The partnership will also provide investors on the 1GCX platform with these new offerings:

This first-of-its-kind trading platform will improve the transparency of price discovery and the real utility (fighting climate change) of credits. These are the two difficulties that discourage institutional investors from entering the space.

1GCX tokenizing carbon credits aims to help investors deal with liquidity issues and uncertain prices.

• 1GCX is also in its early stages of developing its own blockchain. The system has a token with elements of Proof-of-Stake (PoS) consensus mechanisms.

This staking method is often featured in private, centralized blockchains as opposed to public permissionless systems.

Recently, Ethereum has moved from an energy-intensive Proof-of-Work system to PoS. The crypto firm claimed that PoS reduced their energy use and carbon footprint by a whopping 99.99%.

Traders using 1GCX have access to ether and other digital assets, such as bitcoin, AVAX and SOL. The $2 billion deal with T3 Trading, which is the largest to date, has this main objective:

“Creating a digital asset-based market inspired by the green web mixed with the internet of energy.”

In their quest to reach net zero emissions, companies have a great need for carbon credits. And their growing demand will explode more as the world must decarbonize by 2050.

By adding crypto to the mix of solutions, 1GCX’s new carbon credit trading platform seeks to increase transparency, fair pricing and liquidity. All the time prevents fraud.