A Zoom on Alephium x GIGATONS, a PoW blockchain serving the energy transition
December 10, 2024
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This content was written as part of a commercial collaboration. Although the OAK Research team conducted a preliminary assessment of the project presented, we disclaim any liability for losses or damages resulting from decisions based on this article. Cryptocurrencies involve high risks, and this content is provided for informational purposes only and does not constitute investment advice.
In a context where combating climate change is becoming a global priority, blockchain is emerging as an interesting solution to address the challenges of financing the energy transition. Alephium, a layer 1 network using Proof-of-Less Work (PoLW), recently announced a partnership with GIGATONS, an initiative aiming to mobilize billions of dollars to fund CO₂ emission reduction projects.
GIGATONS: A New RWA and ReFi Project
During the Abu Dhabi Finance Week conference, GRIDSERVE, a UK-based company specializing in carbon-neutral electric vehicle charging solutions, unveiled GIGATONS, a blockchain-based financing platform designed to accelerate investments in energy transition and CO₂ emission reduction projects.
The climate emergency requires immediate and structured action. To limit global warming to 1.5°C, significant efforts are needed, as emphasized at COP28. The energy transition involves tripling renewable energy production capacities by 2030, requiring annual investments estimated at $4,550 billion to achieve carbon neutrality by 2050.
GIGATONS aims to contribute to reducing global CO₂ emissions—currently estimated at 59 gigatons annually—by mobilizing massive investments through the tokenization of real-world assets (RWA). This approach aligns with the Regenerative Finance (ReFi) trend, a new form of finance focused on creating environmental or social impact while bridging the gap between climate ambitions and available funding.
To ensure transparency of invested funds and verify the CO₂ reductions generated, GIGATONS has developed the GIGA Protocol platform. This platform will tokenize every euro invested and track the impact of funded projects. The technological infrastructure chosen by GIGATONS is the Alephium blockchain, a layer 1 network using Proof of Less Work (PoLW) recognized for its scalability and energy efficiency.
"This is a complete scale change for the Alephium ecosystem and a long-term commitment that confirms our technological choices. It also demonstrates that Proof of Work and sustainability can evolve together, hand in hand," said Maud Bannwart, COO of Alephium.
Notably, GIGATONS is supported by major players such as Invest Abu Dhabi, ABB, and the Ministry of Economy of the United Arab Emirates. The founders aim to tokenize up to $100 billion over the next decade. Several concrete projects have already been presented, including deploying a carbon-neutral electric charging network in Australia and creating a data center dedicated to blockchain and AI.
Alephium (ALPH): A Logical Choice for GIGATONS
Alephium (ALPH) is a layer 1 blockchain positioned as a technological compromise between Proof of Work (PoW) blockchains and the new generation of Proof of Stake (PoS) networks. Launched in 2021, Alephium uses a Proof-of-Less Work mechanism, derived from Bitcoin's PoW, which ensures a high level of security while limiting energy consumption.
Alephium's infrastructure relies on BlockFlow, an algorithm integrating innovative sharding technology. In short, this allows parallel transaction processing to significantly improve the network's scalability, enabling high transaction throughput without compromising validation speed.
Alephium is designed to support smart contracts through a dedicated virtual machine, Alphred, developed to adapt to Alephium's UTXO-based model. Currently, the network hosts over $60 million in Total Value Locked (TVL) ($25 million in DeFi and $35 million in bridges) and around fifty decentralized applications.
"After evaluating all options, Alephium stood out as the only decentralized blockchain capable of delivering the scalability, security, programmability, and sustainability we need," stated Heston Harper, Co-CEO of GIGATONS and CEO of GIGATECH.
The choice of Alephium to support GIGATONS is based on several factors:
- A high level of security and low energy consumption enabled by the PoLW mechanism, aligning with the platform's sustainability goals.
- Programmability, scalability, and extensibility provided by sharding and the BlockFlow algorithm, enabling 400 TPS currently (and up to 10,000 TPS when needed).
- Reduced smart contract security risks (for both users and developers) thanks to Alephium's Stateful UTXO model, where tokens are managed as native blockchain elements recorded in UTXOs, avoiding dependence on standards like ERC-20 on Ethereum.
"It’s an incredible validation for Alephium's technology to have a project of this magnitude launch, whether in terms of scale, upcoming industrial partnerships, the team, or institutional and state-level support," said Maud Bannwart.
For more information, check out the complete presentation of Alephium (ALPH).
Regenerative Finance (ReFi): Blockchain Serving the Environment
The transition to renewable energies is an essential response to the climate emergency. However, it faces financing challenges that blockchain technology could address, particularly through the tokenization of real-world assets (RWA). This sector has a name: Regenerative Finance (ReFi), a new financial approach aligning investments with environmental ambitions.
At the recent COP28 summit, over 100 countries reached a historic agreement to triple renewable energy production capacities by 2030. However, achieving these carbon neutrality goals comes with costs estimated in the trillions of dollars.
In the current model, accessing funding is challenging because the required amounts are enormous, and returns on investment can take years. Additionally, a lack of transparency in fund utilization poses issues for most investors.
This is why the ReFi sector is rapidly expanding. Using blockchain to tokenize investments in renewable energy or decarbonization projects—like what GIGATONS proposes in partnership with Alephium—could simplify fundraising and enhance transparency in fund usage.
Outlook and Conclusion
The partnership between Alephium and GIGATONS illustrates how blockchain can become a strategic lever for addressing climate financing challenges. However, the success of such an initiative depends on many factors that need to be considered.
First, the regulatory framework for using public blockchains for these types of investments remains unclear in some jurisdictions. The governance of decentralized systems must also align with legal requirements and stakeholder expectations to avoid hindering institutional and governmental adoption.
From a technical standpoint, it is essential that the underlying protocol (in this case, Alephium) maintains its ability to handle large transaction volumes while remaining performant, cost-efficient, and energy-efficient. Additionally, liquidity challenges are significant and currently represent a major barrier to the development of the RWA sector.
Finally, one of the critical success factors is the project leaders' ability to convince traditional energy industry players to migrate to blockchain—a challenging endeavor.
