In this review, we will discuss the innovative solution proposed by Efforce blockchain startup to bootstrap the nascent energy efficiency market using decentralized network technology. In particular, you will learn what Efforce is, who is behind the platform, its features, and its vision to combat climate change one economic entity at a time using tokenized energy savings.
About Efforce
Efforce is a marketplace for decentralized and democratized funding for energy efficiency efforts including trading energy-saving credits. The platform, co-founded in 2018 by Jacopo Visetti, Jacopo Vanetti, and Ken Hardesty, among others, and is currently based in Malta, EU. It uses blockchain to bring together three distinct but important players in the energy efficiency marketplace:
- Beneficiaries – these are the economic entities that directly benefit from projects financed through Efforce. They propose projects that need financing and share any cost savings from successfully implementing these projects with the other stakeholders within Efforce;
- Investors – also referred to as Contributors within Efforce, are the retail and industrial entities that wish to contribute toward the realization of energy efficiency goals by providing financial resources. They get rewarded by the beneficiaries through sharing in the cost savings;
- Energy Service Companies (E.S.Co) – these entities provide engineering and construction services to the beneficiaries. They are the ones that implement projects once they have been proposed to the contributors and funded through the Efforce marketplace.
Efforce may have been launched in 2018, but its roots run back to 2010. The company stems from its parent, AitherCO2, which is an energy services provider with the aim to contribute toward energy efficiency. In some sense, Efforce is an iteration of AitherCO2 with a major difference: it uses blockchain to achieve a similar result.
It is worth noting the involvement of famed Apple (NASDAQ: AAPL) co-founder Steve Wozniak who was brought onboard to Efforce in October 2019 as a co-founder. He is listed on the company website as an engineer, but his exact role is not entirely clear.
As a result of his involvement in the project, the company opted to name its blockchain tokens WOZX. In a later section, we will delve deeper into the creation of these tokens and their utility within the Efforce ecosystem.
Why Energy Efficiency Matters
Simply defined, energy efficiency means using less energy to achieve a particular result. For instance, in a home setting, this could mean heating, cooling, or running appliances with less energy than you would otherwise.
Similarly, energy efficiency measures can help countries reduce fuel import dependence, lessen their exposure to energy price volatility and contribute to climate change mitigation while making systems and societies more resilient.
From the statements above, it is easy to identify some of the more obvious benefits of engaging in energy efficiency efforts. These are:
- Cost savings – typically adoption of energy efficiency efforts leads to reduced power bills in whichever settings the efforts are applied. Additionally, there could be savings accrued from having fewer repairs and longer-lasting equipment as a result of placing less stress on these resources. Energy efficiency can also be applied to the transportation of goods and people leading to savings on fuel.
- Environmental benefits – the environment is perhaps the biggest beneficiary of energy efficiency efforts either within a domestic or industrial application. Using less energy can help reduce negative contributions toward climate change by reducing the use of fossil fuels and releasing fewer gas emissions into the atmosphere.
- Health improvement – energy efficiency efforts often lead to a safer environment for humans to live in by reducing pollution thereby leading to cleaner air, water, or even land masses.
The Efforce platform helps fund selected energy efficiency projects by tapping into the global crypto investment space. It takes advantage of blockchain technology by introducing smart contracts to regulate interactions between various parties in the marketplace.
The Efforce platform
There are three main components to the Efforce platform, and these are:
- The participants, including the beneficiaries (companies), contributors/investors, and the Energy Service Companies (E.S.Co.);
- WOZX tokens – these are the native tokens on the Efforce platform that are instrumental in value transfer within the marketplace to realize an effective crowdfunding effort to facilitate energy efficiency projects by the beneficiaries;
- Tokenized energy savings – these are the returns to the contributors and the E.S.Co entities being a share of the energy savings and carbon credit rewards to the project beneficiary (the company that implements the energy efficiency project). These savings are denominated in units called mWOZ (MegaWOZ), representing a digitized version of the energy saved following the implementation of the funded project in Megawatts of Energy.
The conventional way of implementing an energy efficiency system within an economic entity or organization typically involves two parties: the beneficiary and the E.S.Co.
- The beneficiary will come up with a project to reduce its energy consumption needs with which it approaches the E.S.Co.;
- The latter will thus access the resources needed to implement the project, including financial and otherwise;
- The ESCo will make a quotation to the beneficiary to facilitate the project implementation. If it lacks the funds, the E.S.Co could offer to finance the project implementation phase with an expected return on their investment;
- Using an Energy Performance Contract (EPC), the two parties get into an agreement whereby the E.S.Co undertakes the actualization of the project. Once that is done, any savings made by the beneficiary will be shared with the E.S.Co for as long as it takes to recoup their investment;
- Once the EPC contract lapses and the ESCo has fully recouped its investment, the beneficiary will go on to enjoy 100% of the energy savings.
The biggest challenge to this process is the financing because energy efficiency projects are resource intensive, thus limiting their implementation. Oftentimes, even the E.S.Co might find it difficult to access funds if they are involved in multiple projects simultaneously.
That is where the Efforce platform comes in. The Efforce whitepaper describes a marketplace in which the beneficiaries and the E.S.Co companies can look to interact with financiers directly.
Investors are given the chance to participate in energy efficiency projects and earn a return while doing so from energy savings the same way the E.S.Co benefits from the conventional process as described above. There are a few alterations though, making the Efforce process unique:
- A company assesses its energy system and potential energy savings either independently or through an E.S.Co contract;
- The company or E.S.Co lists the proposed energy efficiency project on the Efforce platform for financing;
- Efforce will perform a background check to verify the legitimacy of the companies listed on the platform that may seek funding;
- If a project is selected and approved for funding on the platform, investors will be allowed to participate by locking up a portion of their WOZX tokens in exchange for newly minted NFTs representing their stake in the project. This is done using an Energy Performance Smart Contract (EPSC);
- Once the project implementation phase has concluded, any energy savings that the beneficiary accrues will be shared with the contributors. This process is done automatically through the EPSC, which attributes the energy savings tokens earned according to the amount of NFTs held by each investor.
According to the Efforce team, these energy savings tokens can be used for consumption in either offsetting other energy bills (industrial or residential) or trading within the Efforce marketplace with other participants.
Staking
Cryptocurrency staking refers to the practice of locking away tokens within a smart contract for a specified amount of time with the expectation of earning a reward. Depending on the network, the project, or the ecosystem, staking can serve various purposes, including as a qualification for verification of network transactions.
Within the Efforce platform, however, staking is used to distribute token savings amongst project contributors/investors. Anyone who participates in project financing is required to lock some of their WOZX tokens for the entirety of the project implementation period.
They then benefit from the tokenized energy savings of the project they have funded according to the EPC terms and also get to share 1% of similar tokens from other projects within the ecosystem.
Looking at the staking interface of the Efforce dApp (decentralized application), there are four different staking pools at the moment anyone can opt to join. These are the:
- 1-Month pool;
- 3-Months pool;
- 6-Months pool;
- 197-day pool.
The Efforce Token (WOZX)
The Efforce token, dubbed WOZX, is built based on the Ethereum ERC-20 token standard and was launched in June 2019. According to the whitepaper, about 1,000,000,000 WOZX tokens were created during the token generation event. There will never be any more tokens generated going forward, and so far, there are no plans to burn any tokens out of circulation.
The distribution of these tokens when they were generated is as follows:
- 450,000,000 WOZX (45%) – Sold to private investors
- 200,000,000 WOZX (20%) – Awarded to EFFORCE Limited, the issuer of the Efforce tokens
- 200,000,000 WOZX (20%) – mining incentive
- 150,000,000 WOZX (15%) – Ecosystem development
Mining within the Efforce ecosystem carries a different meaning as opposed to the conventional way it’s used within the proof of work (PoW) blockchain networks such as Bitcoin.
Here a reward is given for the successful referral of a beneficiary to the platform who goes on to propose an energy efficiency project which ends up getting approved for funding.
The referrer gets rewarded for the referral from the incentives kitty.Note: All these tokens are issued through lockup smart contacts meaning that their issuance is regulated based on set vesting periods. This controls the rate at which new tokens are introduced into circulation.
Token function
As Efforce’s native cryptocurrency, WOZX serves the following purposes:
- Utility – According to the Efforce whitepaper, WOZX is used within the ecosystem “as a certificate of the energy-saving project initiation and cooperation by Consumers and Savers;”
- Governance – WOZX can be staked within the Efforce dApp to enable the stakeholder to participate in financing energy efficiency projects and partaking in governance votes that may affect the overall ecosystem or specific projects;
- Value transfer – as a digital asset, WOZX can also be sent from one wallet to another representing a transfer of value from one individual or entity to the next. Additionally, the token is used to incentivize mining, whereby community members can earn some WOZX tokens by referring companies to the ecosystem.
How to Fund an Energy Efficiency Project on Efforce
As noted above, Efforce is a marketplace that brings together three distinct parties: that is companies (beneficiaries), investors (contributors), and the E.S.Co (Energy Service Companies.) As a potential investor, you can participate in funding your favorite project by taking the following steps:
Step 1
Visit the Efforce dApp page at https://app.efforce.io/ and connect your crypto wallet.
This step assumes that you have some WOZX tokens within the wallet. If not, start by purchasing some from one of the cryptocurrency exchanges listed here:
Step 2
Visit the [Projects] section and read through the descriptions of the energy efficiency projects listed on this page. It is worth undertaking proper research to ascertain the claims made in these descriptions and proposed contract terms.
Choose a project you are comfortable funding and read through the terms carefully. Take note of the amount of WOZX tokens required to invest, how long the project is estimated to last, and the potential annual returns in the form of tokenized energy savings.
Step 3
After choosing the project, you will need to lock WOZX in a smart contract in exchange for an NFT. The NFT will represent the right to claim any realized gains not just in the project that you fund but also rewards from other projects funded within the Efforce platform.
Minting of NFTs is terminated once the project starts, and at this point, all locked WOZX tokens cannot be withdrawn until the project is concluded. The NFTs, however, can be sold to other marketplace participants at a premium or discount to recoup one’s investment.
Step 4
Once the project implementation phase is successfully concluded, NFT holders will begin receiving returns in the form of MegaWOZ (mWOZ) tokens issued at the rate of 1:1 against the USD Coin (USDC) stablecoin.
NFT holders are then required to stake their NFTs within a staking contract through which they can claim their rewards. The mWOZ tokens are deposited into the staking contract, which then proceeds to distribute them to the wallets associated with these NFTs.
According to Efforce, mWOZ tokens can be used to claim savings on energy bills.
Step 5
Once the project contract period lapses, the locked WOZX tokens are unlocked and the staking contract is terminated. You can then be able to transfer your WOZX assets together with the earned mWOZ tokens, sell them or trade them in the marketplace. Alternatively, you can fund another beneficiary and repeat the whole process.
How to store WOZX
WOZX tokens are currently issued on the Ethereum and the Polygon networks. As a result, they can be stored on any wallet that supports these blockchains. Efforce provides a list of wallets it recommends its users adopt, which are:
Wallet Connect is an open-source protocol for connecting mobile crypto wallets to decentralized applications (dApps). Therefore, if your favorite is not listed above, you can check if it is compatible with Wallet Connect, then choose that option. Once connected, you can then store your WOZX, mWOZ, or non-fungible tokens.
Is the Efforce platform safe?
The Efforce platform is relatively safe for use by retail and institutional investors due to the several risk mitigation measures it takes some of which are:
- Company/beneficiary verification process – Efforce verifies all project proposals to ascertain the accuracy of information provided including the project viability, costs, and return on investment projections for the contributors. Additionally, the platform ensures that all Companies and E.S.Co entities register and provide verification before they are cleared to fundraise on the platform;
- Team credibility – most of the Efforce team members are employees of AitherCO2, the energy services provider and carbon credits trading platform that launched in 2011. Over the last decade, the company has built a stellar reputation within the energy efficiency space. Steve Wozniak, a co-founder of Efforce is a notable individual putting his reputation on the line to create an innovative platform;
- Use of a blockchain – Efforce is based on the popular Ethereum and Polygon blockchains which are relatively secure. Ethereum is one of the largest decentralized networks and any dApp created on it inherits part of that security. However, it does not guarantee absolute safety. There is a systemic risk from faulty coding. The other benefit of using Ethereum is that the Efforce platform integrates with popular wallets such as Metamask whose development team can be verified.
Efforce Pros and Cons
Pros
- The platform is decentralized and accessible worldwide;
- Efforce provides a low cost funding option for companies looking to implement energy efficiency projects;
- High flexibility for the contributors who are able to sell, or trade their interests in funded projects in the form of NFTs;
- Tokenized energy savings can also be traded within the marketplace and used to offset energy bills globally.
Cons
- The Efforce platform is relatively new and based on a nascent technology without a long-term viability test;
- The contribution process can be complex for the retail investor increasing the risks of incurring losses while attempting to contribute to a funding pool;
- Funded project returns are arbitrary to each company depending on their unique circumstance increasing investment risk for contributors.
Efforce Customer Support
The Efforce platform maintains an active presence within some of the more popular social media platforms such as:
Additionally, there is the option to contact the Efforce support team using the email channel at [email protected]. It is relatively easy to get help or assistance using any of the provided channels above.
Final thoughts
Efforce is seeking to become an important player in an ever-increasingly important niche of environmental conservation and fighting climate change. As more companies and organizations seek to adopt energy efficiency measures, the project might prove to be well positioned to achieve its goals.
As an astute investor, always do your own research and ensure to adhere to your investment goals, and only invest in projects that match your criteria.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
Frequently Asked Questions on Efforce
What is Efforce?
Efforce is a decentralized marketplace that seeks to bring together all parties interested in implementing energy efficiency projects. These include companies, investors, and Energy Service Companies (E.S.Co.).
How does Efforce work?
Simply put, the project beneficiaries (such as companies) pitch an energy efficiency project to the community, and the investors crowdfund the necessary resources and avail them to the beneficiary. An E.S.Co entity undertakes the project and once it is done, the beneficiary shares savings with the investors.
What does WOZX do?
WOZX is the Efforce platform’s native token used as a utility, governance, and value transfer token.
Is Efforce (WOZX) a good investment?
Whether Efforce is a good investment will depend on your goals as an investor and your investment criterion. Additionally, undertake thorough research to understand the project and how you may be able to contribute to energy efficiency projects on the platform. Once you do, you can thus assess whether it is worth investing in.
