Impact(ful) tokens

Impact investing has a fundamental moral hazard problem.

Digitalizing real world events like construction of the school building that their donor alumni group funded, can have big impact on monitoring and evaluating funding decisions.

The recent WEF report lays out an interesting scenario of verifiable impact investing.

Using tokens to link physical events to a fluid network of supply & demand for capital can significantly cut costs.

Imagine a fund being able to get daily dashboards of corner-shops sales in less developed districts digitalized with their allocation.

Or the credit score of marginal farmers selling produce with less intermediaries in the agri-chain, being on a lending marketplace and these small holder farmers securing loans for their next sowing cycle.  

What if that next pay-as-you-go solar project part funded by an impact fund generates data on electricity consumption pattern and rewards the village with extra credits for getting their children immunized or having all children attend school that year?

Behavioural nudging at scale can have larger real benefits rather than just trying to predict which toothpaste brand you are likely to buy next time you visit the supermarket. It’s a 10X impact for society using known techniques.

This liquidity in asset ownership, claims over assets and higher visibility of use of funds generates a token data trail with much higher societal impact and benefit.  

It’s time for impact tokens to make their mark.