Detailed Plan

Proposal Content

1. Introduction
2. Solution design
3. Working Plan
4. Budget
5. Stakeholders, Partnerships, and collaborations
6. Epilogue

<u>Introduction</u>

Business and individual entrepreneurs were first leveraging blockchain technologies to enhance their operations and grow their businesses. Next step, Non-profits may embrace the DAO 'proposition' as soon as pioneer projects and infrastructure mature. Our proposal aims to explore a sustainable business model and practical implementation of a DApp on Cardano that incentivize individual and collective collectors/recyclers by providing liquidity and enforcing traceability of recycled materials.

Why plastic recycling?

Every hour, an estimated 2.5 million plastic bottles are thrown. For a single 8oz water bottle, we generate a minimum of 60g of CO2 for producing the raw material (from fossil fuels). By recycling a bottle, we reduce potential emissions by the double of its weight, and avoid more harmful impact of plastic trash on land and oceans. Recycling single usage plastics averts the depletion of natural resources by providing sustainable raw plastics to the market.

Many studies point that [lack of] recycling is not a technical issue, but more a result of inefficient supply chains and discouraged collectors and recyclers for not been able to capture the fair value of their labor. Moreover, challengers to the status-ko lack working capital needed. Another important fact is that a significant percentage of collected plastic ends in landfill any way for profitability and supply chain causes. Many cities adopt a green washing strategy and implement point of collect without preparing the ecosystem that will process and use those recycled materials.

The numbers aren't in our side! we need a committed decentralized community to solve such a global problem. But also, a field network of collectives, NGOs, and small processing facilities to be able to optimize supply chain issues.

Why Cardano?

We are fortunate to be already committed to Cardano community, but what drove us to submit the proposal in Catalyst Fund 7 is our faith in the technical capabilities of the protocol and the empowering open community. The openness to contribution made the hard problem more human. On the technical side, the scientific theoretical grounding and the Marlowe tooling suit will help us prototype and simulate predictable behavior and produce a Proof of Concept (POC) Smart Contract more efficiently.

Africa is lagging behind in recycling. Yet, we are persuaded that the much-needed social innovations have the ground to evolve here. This conviction is corroborated by the strategic orientation of Cardano toward Africa, thus encouraging us to build our initiative inside the Catalyst house.

<u>Solution design</u>

Two tokens

<u>UPB.</u> Used Plastic Bottle represents a collected single usage plastic bottle issued as a native asset on Cardano. It is a digital representation of an 8 oz used water bottle (weight approximately 30g). This token is inflationist as it'll track an increasing number of collected then recycled single use plastics bottles.

<u>Viridis.</u> The governance token rewards verifiably recycling 100 UPB. Viridis aims to incentivize recycling and to be used as a collateral for Smart Contract execution and liquidity. Hopefully, trough listing on DEXs and free market mechanism, the price will reflect the monetary value given by the community to recycling of 3kg of plastics.

The Smart Contract

The Smart Contract has three main functions, namely, Proof of Collect, Proof of Recycling, Incentives distribution. The on-chain code interacts with aggregators of collected wastes, recyclers, liquidity providers and auditors. Auditors that verify evidence on the ground are incentivized to timely check the on-chain transaction.

We conducted an analysis of building blocks and tools to deliver on the Cardano blockchain. Moreover, we plan to validate the economic soundness through modeling and simulation of the system dynamics using Cadcad toolkit. Marlowe toolkit will be used extensively in prototyping the smart contract. We assume that using Marlowe will shorten our security certification Level 1.

This system aims to provide liquidity to a P2P ecosystem that track and verify origin of recycled wastes. Hence, incentivizing the adoption while enhancing profitability of recycling at grassroot level. We aim to add value to the value chain to benefit all parties.

The journey of a bottle and its digital twin

1. Individuals, households, or professionals collect and sort plastic bottles
2. Collectors sells those plastic wastes to Aggregators
3. The Aggregator (Agg) document quantities and localization, upload proofs to IPFS then submit a transaction to the Smart Contract with Viridis tokens as collateral (Proof of collect)
4. The Smart contract send an equivalent quantity of UPB tokens to the Aggregator.
5. Agg. Sells sorted plastic wastes to a Recycler along with the UPB tokens
6. Recyclers process the plastic and produce raw materials or goods and document quantities, upload proofs to IPFS then submit a transaction to the Smart Contract with equivalent UPB tokens (Proof of recycling)
7. The Smart Contract unlock collateral and send recycling rewards to participants

In partnership with Carbon offset projects, we plan to issue equivalent Carbon Credit offset by our activities and mint NFTs to extract more value that will be used to incentivize recyclers and, to fund sustainability initiatives.

What success looks like?

Success means for us creating value for the Cardano community through the experiment of building a Dapp that has social, economic, and environmental impact. Practically, for the foreseeable future, success lays on delivering the intermediary goals listed underneath:

• Launching a Dapp as a proof-of-concept in 2022
• Minimal bugs and vulnerabilities
• Security Audit for Level 1 certification in 2022
• Reaching Cardano DAO Level 3 in one year
• Open-source release for the Smart Contract and Off-chain code
• Publish a peer reviewed research paper on the economic model and initials findings
• Healthy distribution of the governance token and adoption of state-of-the-art governance rules and tools

<u>Working Plan</u>

The realization of the project objectives can be achieved only by meaningful work executed by the project team, our partners, and the community, on an agreed upon plan. For better coordination and auditability, we organized project activities in six work packages.

Work packages

• WP1: Modeling and Prototyping
• WP2: System development, deployment, and continuous improvement
• WP3: Driving Adoption/marketing/community management
• WP4: Growing a network of collectors, recyclers, and users
• WP4: Security and auditability
• WP5: Leveraging Cardano's DeFi ecosystem: particularly DEXs and Launchpads, and other Dapps
• WP6: Governance and Open accounting

Deliverables

• D1: Audited Smart Contract
• D2: A network of collectors and recyclers submitting transactions on Cardano
• D3: Web/mobile User Interface
• D4: Documentation and users' support
• D5: Peer reviewed research paper and lessons learned shared with the community

Milestones

In the first 3 months, we aim to design and prototype a DAO for incentivizing plastic bottles recycling. This first stage we'll work on collaboration and partnerships in parallel of tweaking and enhancing our system design. By the 6th month, we aim to facilitate the recycling of up to 100 000 plastic bottles in an African country (Morocco, Ethiopia or Egypt). And then grow organically through the continent.

And by the end of the year, we target the symbolic number of 1 000 000 bottles (6 tons of CO2 emissions and significant environmental impacts avoided). This will make the Cardano ecosystem more carbon neutral and more eco-friendly.

6 months

• Alpha version of the Smart Contract on the Testnet
• Working on level 1 certified Smart Contract
• 100+ registered recyclers and wastes' aggregators
• 100 000 plastic bottles collected

12 months

• Public launch
• 1 million recycled bottles by the end of 2022
• 10 000 users
• Capture 50k USD in IDO / ISPO
• Peer reviewed research paper

Technical Feasibility

The proposal team identified essential building blocks and infrastructure on the Cardano blockchain needed to deliver on the project scope.

Cardano building blocks

• Marlowe toolkit
• PAB
• Tooling for connecting with DEXs
• Tools for mobile payment
• Tools for DAO governance

Project Team

We have real-world experience in recycling in Africa, and we have faith that Cardano will enable more social and sustainable human activities.

• @Elias | Coordinator | Plastic processing engineering background, CTO of a local recycling NGO, Blockchain enthusiast. LinkedIn profile: <https://www.linkedin.com/in/ilyassmousaid>
• @H2osin | Audit & Quality | Engineering background and digital marketing experience. LinkedIn profile: <https://www.linkedin.com/in/el-h-habibalah-843877171>
• @Job | Developer | Full stack dev with startup experience. LinkedIn profile: <https://www.linkedin.com/in/ayoub-mousaid-762494100/>
• @Kawtra | Community Management | bachelor's in management, international volunteering, and community engagement experience.
• @natdwamena | Partnership | Wada representative, BA in Geography and Rural Development and W. LinkedIn profile: https://www.linkedin.com/in/nathaniel-dwamena-02578a127
• S.A.K. KAYA | Senior Advisor | Researcher and lecturer, Phd in economics, Research topics: social entrepreneurship, sustainability, supply chain, economic development. ResearchGate profile: Kaya-Sid-Ali-Kamel

We are looking actively for motivated team members. We encourage everyone to join Viridis and make direct impact! We look for a Cardano Blockchain specialist, accountant, and motivated team members from Catalyst community.

<u>Budget</u>

Co-Construction

As a proposal oriented toward the common wellbeing, we can't but be receptive to community feedback about the budget estimation and spending. The definitive budget will result for the proposal enhancing process designed in the Catalyst Fund.

Open accounting

Initially funds will be managed by a treasury board and expenses will be shared timely in an open access file. Periodic financial reports will be archived on IPFS for auditability. We are open to implement best practices of DAO accounting.

<u>12 000 $ requested funds</u>

• 3000$ Project Team: 6 part-time over one year
• 2500$ Providing Liquidity through DEX
• 2000$ Freelance/developers
• 1500$ First Smart Contract Audit
• 1500$ First adopters' incentives (training, transaction fees during onboarding, …)
• 600$ Travel expenses
• 600$ Marketing expenses
• 300$ Hosting + Domain

<u>Stakeholders, Partnerships, and collaborations</u>

Stakeholder identification

Recycling ecosystem

• Individual and collective collectors
• Small recycling facilities
• Recycling compagnies
• The plastic industry: Consumers of recycled plastic and producers of raw materials
• Legal and environmental bodies

Cardano Ecosystem

• Cardano sustainability initiatives
• Catalyst Community
• Launchpads
• DEXs
• Plutus developers and contracts auditors
• DID for following development stages

Partnerships

• Cardano4Climate: An amazing community that we encourage all to join. C4C is a global community of over 150 members, grown in 3 months that began as a challenge & has turned into a community. <https://cardano.ideascale.com/a/dtd/Cardano4Climate-Community-Hub/384081-48088>
• Cardano Care: We have many convergent objectives and complementarity with this Fund 7 proposal. <https://cardano.ideascale.com/a/dtd/Cardano-Care/382874-48088>
• Friends of Nature: Environmental NGO for artistic and technical recycling
• DeFi Carbon Pricing Standard aka BlockCarbon aims to provide Open source toolkit to price and exchange Carbon as tokens. They will be the issuer of Carbon Credit preserved by our activities. https://cardano.ideascale.com/a/dtd/DeFi-Carbon-Pricing-Standard/381939-48088
• Potential: We are open to partnering with relevant projects from current and past Catalyst Fund runs.

Risk identification

• Technical: bugs & vulnerabilities
• Operational (on the field): Coordination and Supply chain issues, …
• Socio-economic: lack of adoption, high fees, price pressure from fossil fuel sources of plastic…
• Legal: legal uncertainty, conversion between ADA and local currencies…

<u>Epilogue</u>

We recognize that digitalization of the informal sector is challenging. Most of the litter collection is performed by the lower economic strata of society: very poor, homeless people and the mentally ill, who slip through or actively avoid engaging in the formal economy and hence are unbanked. Initiating a network that support those vulnerable population by providing them with the fair value of their labor is challenging, yet it is surely worth our effort as a value driven community.

We adhere to the open-source principles, and we give back any Intellectual Propriety Rights to the Cardano community.

Acknowledgement

• Cardano 4 Climate for their support during the draft and refinement phase, and their role as connectors. Big Kudos!
• Prof Sid-Ali Kamel KAYA our senior advisor on the economic model and the game theory aspects of recycling. Prof KAYA have a PhD in economics and published several research papers on public governance, entrepreneurship in emerging markets, but also sustainability and carbon credit related topics.
• The Catalyst Community for their constructive feedback that improved drastically the quality of the first and following drafts.
• The whole Cardano ecosystem for making this possible!

**<u>Appendix :</u>**UN development goals and measurable outcomes

We used the SDGs proposal tool <https://cardanocataly.st/proposer-tool-sdg/> made by Catalyst Community to assist in mapping our impact to the 17 UN Sustainable Development Goals.

- Goal 8.

Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all

- Goal 12.

Ensure sustainable consumption and production patterns

- Goal 13.

Take urgent action to combat climate change and its impacts

- Goal 17.

Strengthen the means of implementation and revitalize the Global Partnership for Sustainable Development

SDG sub-goals:

• 8.2 Achieve higher levels of economic productivity through diversification, technological upgrading and innovation, including through a focus on high-value added and labour-intensive sectors
• 8.3 Promote development-oriented policies that support productive activities, decent job creation, entrepreneurship, creativity and innovation, and encourage the formalization and growth of micro-, small- and medium-sized enterprises, including through access to financial services

<u>Key Performance Indicator (KPI):</u>

8.2.1 Annual growth rate of real GDP per employed person