B2B2C driven Celo adoption in Korea: Testing the waters

Governance Governance Proposals
1

Dear Celo community,

We are a group of professionals with IT, blockchain, and ESG background, with experience building a B2C solution for Korean companies. We are in the process of choosing a blockchain layer for the product, and have reviewed Celo as a potential candidate. Below is a brief overview of our preliminary assessment of the market and our proposal to test the waters in the country.


[Country Context]

ESG entered Korea through supply chain engagement of multinational corporations and also the Stewardship Code by overseas financial institutions. That is why the most important issues and keywords on ESG have been on 1) Phase-out of coal financing 2) Korean Green Taxonomy 3) RE100 4) CBAM.

Unlike the US or EU where shareholder activism has been one of key drivers of corporate climate action, there has not been any grassroot movement in the country due to the absence of legal backing of shareholder proposals. This implies that the word ESG has very little relevance with individual citizens, but a matter more relevant to companies and financial institutions. To begin with, ESG emerged as a risk management framework, and should be used in specific contexts.

While it is true that due to the emergence of ESG, the level of awareness of citizens on climate-related issues has improved, it has not led to an increase of individual-level climate action. It is impossible to find any individual voluntarily measuring their emissions, let alone offsetting travel or daily emissions. Most actions that exist are incentive-driven, as evidenced in loyalty point reward scheme (cpoint.or.kr) for residential electricity use or cash-back reward scheme (car.cpoint.or.kr/guide/carCoPoint.do) for driving less. Despite the fact that both were government sponsored programs, they are far from mass adoption.


[Priority Setting for Celo in Korea]

On a macro-level, Celo has placed an emphasis on 1) p2p payment infrastructure 2) impact driven donation applications 3) climate-related application

This is based on our observation of the forum discussions and of the statistics displayed through explorer.celo.org.

Below is our preliminary analysis of Celo’s priority in Korea.

  1. P2P Payment
    Celo has its foundation in Valora, a mobile-first digital wallet with a vision of “providing highly localized financial services”. Today such a vision has led to an increased traffic from emerging markets like Philippines, India, Kenya. However, Celo’s success in P2P payments is not replicable in Korea considering the following elements

  • Overseas remittance

    • Korea has a significant overseas remittance(outbound) market driven by migrant workers from South East Asia
    • Korean banks have been offering zero fees for overseas remittance.

  • P2P Payments

    • Korea has a solid and highly developed payment infrastructure. Besides credit cards, simple payment solutions have seen significant adoption over the past decade.
    • Attempts to introduce a new payment system have met challenges.
      • QR code payments is a case in point. QR code failed to infiltrate the market because of the established players, and most importantly, existing solutions are easy and comfortable enough.
    • Valora currently offers a direct off ramp solution in several countries, but it is a distant future in Korea.

  • Regional currencies

    • Any attempt to merge with the municipal government’s regional currency scheme requires significant lobbying efforts.
    • Paycoin is a great example. A blockchain project of Korea’s Paypal equivalent, Danal, has stopped its operation recently despite having access to existing payment networks and also entering into agreements with a municipality.

  1. Impact-driven Donations
    Some of Celo’s DAPPs are centered around donations. There is a possibility to empower existing DAPPs (like Give Directly, Plastiks, Silvio) that require impact-driven donations. Celo’s regional campaign will then have to compete with the likes of World Vision, GoodNeighbors, UNICEF, etc. Lack of transparency has played a certain role in making citizens hesitate. As long as Celo ecosystem stakeholders prove an edge through blockchain, it will need such marketing and information.

  2. Climate-related Applications
    At the core of climate-related applications lies addressing problems in the voluntary carbon market, either improving data integrity, interoperability, MRV, etc.

    Although Celo is a distinct player in climate in pioneering offsetting its own emissions and is home to a myriad of climate-related applications, according to our review of the existing DAPPs, none provides direct solutions to current ESG-related issues faced by Korean companies.

    Also, the voluntary carbon market has a close to zero traffic in the country, as the ESG policy/framework driven demand has yet to lead to actual purchase of voluntary carbon credits. And if it ever does, large corporations will rely on a less experimental means of procuring credits, which is through 3rd party consultancies due to the lack of in-house expertise of carbon procurement. Also, dMRV solutions will face challenges in adoption here as Korea does not have fertile ground for mitigation projects. To begin with, South Korea is a net importer of carbon emissions rights, dedicating close to 5% of its NDC ambition on importing carbon credits from outside the country. The narrative on empowering indigenous communities has almost no implication in the country.

Based on these grounds, our thesis is that traffic to Celo can be increased by citizen-level climate action through B2B2C strategy.


[The B2B2C solution for incentivizing individual’s climate action]

We do think that some of the existing DAPPs on Celo has the potential to see user adoption in Korea. However, we saw the advantage of leveraging a consumer-oriented project in the same country that has an interest in engaging with the blockchain space. Because some of us have built an MVP for WinCL, a leading climate tech company in Korea, we have chosen to propose web3 ways of growth and exposure to the Celo ecosystem. This company provides climate consulting and a marketplace service to the public for purchasing carbon credits in smaller amounts than a ton.

As previously stated, ESG in Korea is very little relevant to the public and companies deal with ESG mainly for its upstreams. WinCL seeks to increase the individual-level climate action via carbon credit purchase & retirement from its marketplace, since the existing personal anti-emission campaigns are ineffectual. However, simple donation based buying and retiring carbon credit won’t last long and hard to be repeatable. WinCL proposes a carbon credit marketplace that facilitates 1) easy access to effective climate action to individuals 2) new valuable ESG marketing channels to companies by connecting them with a reward system that incentivizes individuals.

To measure the effectiveness of its proposal, WinCL already tested the feasibility of its marketplace model through PoCs with two major Korean companies (NHN and HLB Group) and demonstrated it successfully. Campaign was conducted with its employees and 200 tons carbon emission offset with NHN employees & 600 tons carbon emission offset with HLB Group employees were achieved respectively.

Now, it is under discussion with WinCL that the implementation of WinCL’s marketplace model on top of the blockchain technology and designing the extra layer of incentive architecture with NFT.


[Identifying the first Refi Pioneers in Korea]

To identify the first climate-friendly and tech-savvy individuals in Korea, we are working with our partners in various sectors, from the environmental organization like Korea Green Foundation (환경재단: greenfund.org/en) to Web3 companies. The first step is to guide them to experience blockchain-enabled carbon credit holding. We are going to proceed with an event where we can make pioneers experience what the carbon credit offset is and how to use the Celo network. By doing this, pioneers can make their first step to have an experience of how the Refi ecosystem is built on Celo Network.

We aim to identify at least 500 pioneers through off-line and on-line events. We will prioritize the use of Valora on mobile, and invite early users with the following incentives.

*During the design process, we found some pain points.:

  • Celo Network doesn’t support POAP, Raffle ⇒ We had a plan to join off-line conferences to make visitors join our event, but it was hard to use POAP and Raffle because Celo doesn’t support it. So we are going to make our own format which is similar to POAP and use Gleam to choose winners.

We are targeting a few side-events during KBW(Korea Blockchain Week) with a large audience, and are in the process of engaging with an environmental NGO on sponsoring an event with NFTs/Stablecoins on Celo.

  • Scenario (Off-line event, On-line event)

    • Off-line event: In the event space, we will set up the banner with a QR code connected to the raffle URL that users can join missions. Volunteers will guide visitors to join the event.

      • Mission 1) Scan QR following guidance’s instruction on the Off-line conference and participate in raffle
      • Mission 2) Download Valora wallet and input wallet address on raffle
      • Mission 3) Get NFTs with coupon code (POAP) and register the code on raffle
        **These NFTs show the amount of carbon credit offset (1.0 t each)

    • On-line event: By using our Web3 community networks, we are going to spread the event. Process is similar with Off-line event.

      • Mission 1) Access raffle URL with the partner’s announcement
      • Mission 2) Download Valora wallet and input wallet address on raffle
      • Mission 3) Get NFTs with coupon code (POAP) register the code on raffle
        **These NFTs show the amount of carbon credit offset (1.0 t each)

    • How we choose winners:

      • When users are enough to choose winner, minimum 500 applicants who finished mission 2 and register their Celo wallet address, we send NFTs with coupon code at once
      • Each user has to register their code again and they can check whether their code is on the winner list or not
      • We will transfer cUSD following prize list (Rewards)

At execution of the event

[Validator Engagement]

We believe that for both investor engagement and for actual DAPP ecosystem activation, we need to increase the ecosystem stakeholders on Celo. While we are engaging with WinCL to deploy on Celo, we saw the necessity to have more validators in Korea to build an ecosystem in Korea. By bringing the validator for Celo in Korea, we believe it will provide a solid signal to retail investors and other VCs alike.

We are in the process of engaging a top-tier crypto trading & investment firm based in Seoul and Singapore that have deployed high frequency market neutral strategies across 20+ exchanges. This firm is currently a validator in 5+ blockchain projects with no slashing and 100% uptime.


[Budget Table]

Budget breakdown can be found here.

Item Budget Note
Development 7,000 NFT, Raffle
Events 8,025 Event related costs will be cashed out at the time of an event execution.
Outreach/Engagement 7,000 Event preparation, validator engagement
Others 2,500 Project management, ESG advisory
Total 24,525

[Timeline]

  • NFT Issuance & preparation ~ 2023 Sept
  • Events: ~ 2023 4Q
  • Validator: ~2023 Oct

[Proposers]

  1. Yong Geon: CTO of COTWO

    • Wallet: 0xA91591446E0AEB95616d50cD8B299f6ee51159eb

  2. Colin: CEO of CYK (CYK Portfolio (1).pdf - Google Drive)

    • Wallet: 0xA91591446E0AEB95616d50cD8B299f6ee51159eb

  3. Sohyeon: Design & Operations, WinCL (www.wincl.io)

    • Wallet: 0x41CF940C015af7d9c886dB4bc0455F6eA713b200

  4. John: CEO of Coredotlab, Blockchain development company in Korea

    • Wallet: 0x362b4aF32BA9A0B7a90A531a5B69FACA1Bc090cF

  5. Gwangwon: Trader, validator engagement

    • Wallet: 0xA91591446E0AEB95616d50cD8B299f6ee51159eb

  6. Seongeun: ESG advisor, former Senior Researcher at CDP Korea

    • Wallet: 0xDc33357843ba70cbB599edef67465b53D4b53Aa2
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