Hyphen Acquires Chainlink Grant to Develop Oracle Framework for Tracking Greenhouse Gases, Ozone-Depleting Substances

With the increasing concerns regarding issues related to climate change and various unsustainable agricultural practices, many nations and large enterprises are working via international pledges to establish an ecologically conscious future.

Hybrid smart contracts—which are smart contracts that bring together blockchains, Oracles, and API infrastructure to develop sophisticated, interoperable apps —are emerging as a way to “incentivize” collaboration around “shared” sustainable initiatives through transparent and “highly reliable” data-driven automation.

Although blockchains offer a way to store and enforce user commitments in a “tamper-proof” and public ledger, Oracle networks provide a framework to “validate the data used to trigger various climate rewards and penalties,” the Chainlink team writes in a blog post.

They also mentioned that these hybrid smart contracts may be applied within “a variety of established climate compliance frameworks to automate actions like incentivizing sustainable business practices, promoting regenerative agriculture, issuing carbon offsets, penalizing high emissions, and more.”

As stated in the blog post:

“In support of hybrid smart contracts within global green initiatives, the Chainlink Community Grants Program is awarding a social impact grant to Hyphen, a transparent data reporting framework aimed at aligning industry action and financial services with the goals and objectives of various global climate initiatives, such as TCFD, TNFD, the Glasgow Financial Alliance for Net Zero, the Montreal Protocol, the Paris Climate Accord and the Science Based Targets Initiative.”

The purpose of Hyphen is to offer an improved method for firms to demonstrate their real-world environmental impact “according to their preferred reporting framework.”

Hyphen will reportedly leverage Chainlink-enabled decentralized Oracle networks (DONs) to fetch climate and reporting data, analyze the data against “specific climate initiatives,” and then deliver outputs to the blockchains, like real-world impact assessments and compliance reports.

The data reports may also go on to “trigger further smart contract outcomes, like automated climate actions,” the announcement noted.

Through independent, decentralized, and transparent verification of data reporting using DONs, the Hyphen framework is “designed to help prevent and reduce climate and environmental fraud, such as inaccurate self-reporting for greenwashing purposes,” the blog post explained.

David Grimes, former President of the World Meteorological Organization and member of the Hyphen Advisory Board, stated:

“The latest physical assessment of climate change by the IPCC shines a spotlight on the urgency to take more aggressive climate action to significantly reduce anthropogenic greenhouse gas emission now. Such actions, as being considered by the financial sector will enable institutions, multinationals, companies, and eventually people to achieve this outcome and will go a long way to better managing climate risk and supporting the transition to a prosperous green economy.”

One of the focus areas of the grant is to form a technical foundation for initial data migration from the legacy systems for ODS (ozone-depleting substances) and GHG (greenhouse gas) datasets to a Chainlink-enabled decentralized framework for emissions management under the Montreal Protocol.

As noted in the update, the first of these datasets to undergo a data migration “will be Nitrous Oxide (N2O), essentially bringing both ODS and GHG data sets securely onto public blockchains instead of isolated in legacy systems.”

The announcement also mentioned that the Montreal Protocol is an international treaty designed to “protect the ozone layer by phasing out the production of numerous substances that are responsible for ozone depletion.”

The Montreal Protocol “mandates the collection and reporting of ODS data on a global basis.” The Montreal Protocol was “chosen as the initial compliance framework because it has been shown, such as through a study published in Nature, that protecting the ozone layer is highly effective in preventing a range of catastrophic climate effects.”

The update also noted that the role of N2O as an ODS and a GHG offers “one potential bridge for connecting the Montreal Protocol to the Paris Climate Accord.”

As stated in the release, Hyphen Global aims “to accomplish three key objectives for its initial decentralized oracle-based reporting model” which include the following:

  • Identify the appropriate data collecting partner “within the Montreal Protocol emissions monitoring agencies (e.g. NOAA, ICOS, IG3IS), enabling Hyphen to access N2O data.”
  • Develop an API service that the data collector in the Montreal Protocol emissions “monitoring agencies can use to feed into Hyphen Nodes for an initial collection of data.” This “includes the detailed, open-source documentation of the API.”
  • Develop open-source Chainlink External Adapters “to get data from the API into the blockchain environment using Chainlink oracles, opening up a variety of hybrid smart contracts based on climate actions.”

Alex Vermeulen, Director for ICOS Carbon Portal, remarked:

“ICOS is committed to providing high-quality data on greenhouse gas concentrations and emissions and we are constantly striving to expand our network to more countries and now also to urban areas. Our unique data is essential when verifying how the reductions of greenhouse gas emissions really proceed, and how the Earth is reacting to the ongoing climate change. We are happy to see that the business world and banks recognize the value of the reliable and transparent ICOS data in order to take larger and faster climate actions, and we look forward to making it accessible also on-chain through Chainlink’s time-tested oracle infrastructure.”

In the long term, Hyphen aims to establish a pathway for the use of the Montreal Protocol as a climate mitigation framework “built upon blockchain and oracle technology, enabling faster and more reliable actions by governments, corporations, and the banking and finance sectors strategically planning to combat climate change and to prove their commitments to sustainability and Net Zero.”

Miles Austin, CEO at Hyphen Global, added:

“The ability to access trusted, verified sources of emissions data has the potential to provide a new level of transparency and accountability to climate risk reporting. Collecting, aggregating, and delivering this data on-chain via Chainlink decentralized oracle networks will give rise to new climate reporting ecosystems able to unlock the full potential of initiatives, such as TCFD, GFANZ, SBTi, in order to address the increasing ‘green swan’ risks to the finance and banking sectors.”

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