An NGO in the Seychelles has developed a novel and innovative approach to gaining funding for its projects, namely through joining the increasingly lucrative, but also controversial, Non-Fungible Token market.
Nature Seychelles is a NGO specialising in the conservation of the island nation’s roughly 220 native and migratory bird species. The destruction of habitat across Africa, as well as the introduction of invasive alien species, has meant some bird species have plummeted in number. The Seychelles Magpie-robin is one of these birds, with current estimates placing the population at only around 460 birds across all the Seychelles islands. In reality, the Magpie-robin represents a success story, having recovered from around 21 individual birds in the 1990s. Nature Seychelle and its BirdLife International Partners now hope to further finance this success by turning the Magpie-robin into a collectible commodity.
After teaming up with International Union for Conservation of Nature (IUCN) and the Porini Foundation, Nature Seychelles is offering the Magpie-robin as a Non-Fungible Token (NFT). This is essentially a digital token which proves ownership of a unique piece of non-physical property, in this case a ‘Digital Nature Collectible’. The token can then be traded and sold to others, but only one token can ever exist for one specific piece of digital real estate.
All of this is then kept tracked within the blockchain, an online digital ledger in which blocks of information are distributed across multiple computer systems – often in a public manner. The blockchain infrastructure developed by the Porini Foundation therefore confirms the ownership of each NFT ensuring it is only ever linked to its rightful owner.
Currently, Nature Seychelles has released an initial supply of 59 NFT tokens – with each one representing a digital twin of a living endangered bird in its Cousin Island Special Reserve. The Digital Nature Collectibles can be purchased for varying prices, ranging from as low as 10 USD to as high as 10,000 USD. Currently, most of the low cost tokens have already sold out. The total value of these initial sales will go directly to Nature Seychelles, while owners can potentially sell their collectible to other buyers further on. In these cases both Nature Seychelles and the owner will take a share, potentially creating a new long term revenue stream. An associated app has also been developed to allow for easier trade and sales.
Right now, only tokens for the Magpie-robin exist, but it is conceivable that in the near future many other species may be ‘digitised’ into NFT collectibles, which can be traded for others or sold for cash. In this way, nature conservations may be able to turn their animals into a modern day equivalent of baseball trading cards, or even pieces of art.
The Digital Collectibles Market
It is likely that some may be slightly perplexed by the notion of paying thousands of dollars for a digital commodity with no real physical worth. But that’s not to say there is not a market. In recent years, NFTs have grabbed headlines for their novel – and lucrative – approach to ownership. In March 2021, Christie’s auction house sold a NFT of digital artwork, Everydays: the First 5000 Days, for a record 69.3 million USD. Days later, Jack Dorsey, founder of Twitter sold his first Tweet for 2.9 million USD. Elsewhere, images, audio and video – often related to online culture – have sold for high values.
It is worth noting, however, that NFTs do not show ownership of copyright, but simply ownership of a completely unique digital asset. The owned image or video can be replicated and distributed elsewhere, often extremely easily and at no cost. Indeed, ownership of the only unique asset related to an oft copied image or object may be what gives them their high value.
However, blockchain itself is not without its sustainability critics, especially the amount of processing power needed to maintain the digital ledger. The ‘proof-of-work’ protocols on which blockchain depends are extremely energy demanding, as is the maintenance of the system and so-called bitmining farms (shown below). Some blockchain platforms and NFT sellers are attempting to face these problems by introducing new more efficient protocols or by buying carbon credits to offset their emissions – although this is also not without criticism.
Porini has attempted to sidestep these concerns by creating a carbon-neutral method which reportedly has nearly zero energy consumption. Instead of hosting their blockchain across the globe – resulting in vast amount of energy being expended – nature conservation organisations have given their permission to host blocks themselves. This means there is a pre-existing chain of computers set up to maintain the digital collectibles, making it far more energy efficient than currencies such as bitcoin.
Even with environmental concerns, the high value of the NFT market could be seen as an opportunity for additional funding by some NGOs and charities, especially with a rapidly expanding market. The spread of blockchains and cryptocurrencies such as Ethereum, Flow, and Tezos has further fueled interest and speculation in NFTs, especially in 2021. In 2020, the value of the entire market was around 250 million USD, by the first quarter of 2021, sales had exceeded 2 billion USD.