Non fungible tokens are not about art and music only. NFTs can represent anything unique. Trees, for example. Every tree is unique. Digital Asset Live Editor-in-Chief talked to Iwa Pawlak, Smart Forest Co-Founder:
Q1: Let’s go straight to the point: to an investor, is your project about making money or about feeling good? Is it a charity or is it a profit making enterprise?
A1: We like to say that with Smart Forest you do not need to chose between gaining profit and doing something good because it’s possible to fulfill both this needs. If you ask about our profile, we are an enterprise but with a green mission behind our back.
Q2: How much money may buyers of tokenized trees expect to receive, perhaps you could outline the worst the best scenarios? What else besides money may they get?
A2: You could think about us as an exchange. On the first step we change fiat money into the tree. After the tree growing cycle is finished the investor can take her/his timber or sell it through our platform. In that case there is another exchange happening from timber to the fiat money.
Q3: If you were to explain how Smart Forest functions to an outsider to tokenization, how would you do it?
A3: Our aim is to have variety of trees on our marketplace with different value chains (resin, fruits, timber etc.). Currently we published an offer of Paulownia plantations settled by our partner in Romania, within the cycle of about 8 years. Within this period one tree can produce at least 0,33 m3 of timber.
The actual price of Paulownia timber on local market is about 300 – 600 euro per m3. Such a high price comes with the high quality of the timber – it’s light but durable and have high ignition temperature. For our estimation let’s calculate a price for 220 euro. Basing on the historical records if someone will decide to sell owned tree by the end of the cycle, he/she can expect 75 euro, what makes 8% of profit every year from 40 euro investment. By the way, there is still couple trees left from the first plantation. Shopping can be made though our webpage.
We are currently building an app where user could interfere with owned tree, checking the weather conditions and humility on the spot. Also date about neutralized CO2 will be shared.
Q4: If you were to explain how Smart Forest functions to an outsider to tokenization, how would you do it?
A4: Whole system is build upon a simple rule – 1 token is always one tree (NFT format). It’s like a passport for a tree, with this different that it can be transferred or sold. But beside the tokenization we are coving not less important competence: we are a trust provider between the parties. So before selling any asset through the platform, we check the planting company documents, data and history. We also check the tree growing prediction and timber price on the market. If we believe that practically this or that tree species in this climate conditions with this or that company is a good choice we post the offer on the webpage.
Later on we are traveling frequently to the site, to check how the trees are being planted or how they grow. From the point of view of a gardening company, we are taking a part of responsibility of dealing with clients, leaving them resources to handle their core job – plantations maintenance.
By the end of the growing cycle, together with planter we are also inviting timber using companies to provide their offers for a buy back.
Q5: Please outline to us the history of Smart Forest and its current state? There have been some significant changes in the marketing plan along the way..
A5: Yes, sure. The very original concept was just to rent/buy land somewhere and plant there trees as a secondary retirement plan. Later we started to work in the blockchain sphere and learned about the tokenization. Obviously we were inspired by its potential. Shortly after we decided to join this two idea and this is how Smart Forest was born.
As it is always with a new project, at the beginning we had a mess in heads and documentation. We wanted all and now. Slowly, we were cutting out parts which were too heavy for us to handle on this stage (like own carbon credits, CSR programs and etc.). But it’s still a very challenging to explain the core of our project. When I say to someone that we offer a marketplace with investment trees, often I hear – Heh, invest in trees? Why?
Tree is not the first choice when people think about the investment, which is groundly wrong as one of the few if not the only asset which always grows.
Q6: Who are your individual, non-corporate clients? Perhaps you can share actual socdem data
A6: Well this is a tough question. If I would a have to outline the current customer models I would separate four different types. First one is interested in sustainable investment but limited financials makes most of the available options closed for him/her. It is mainly a beginner in the financial world.
Second type of investors are experienced one, who are looking for a long-term investment which could balance the failures in a short term. For the third one ecology is the main reason, why he/she wants to buy a tree. In this case profit is a nice but added value. Fourth part, which surprised us, are people who would like to pick up timber at the end of the investment cycle and build up a log house. We are obviously also giving such a possibility.
Q7: How do you intend to increase the customer base? How much revenue do you allocate to marketing?
A7: Our project belong to the complex one. Therefore we are creating an cooperation with opinion leaders and media at the first stage. As we are offering an asset which hasn’t been available for the mass public previously, not many people think of trees or forest as something precious.
So big part of our strategy is promoting the culture of trees investment and educate about pros and cons future investors. We obviously also don’t exclude the “new-old” marketing channels like social media for example. And how much revenue we do allocate? As much as other needs allows us to.
Q8: What are your targets to near, mid and long time future?
First of all we are aiming to attract more clients to the marketplace and have more plantations with different sort of trees and create a secondary market. Later we are aiming to get corporate clients on board. Anyway, working with trees teach you to think in long periods, so such a big goal for us is to engage people who are excluded from the financial world, to start to think about own future. And of course, we want to make world green☺