Global Blockchain Land-Trust Framework

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* White Paper: The Commons 2.0 - A Global Blockchain Land-Trust Framework. Terrafina Foundation, May 2018

URL = https://terrafina.org/assets/pdfs/v0.1.0.4_White-paper_A-global-blockchain-land-trust-framework.pdf

Description

"Sustainable farming holds the potential to mitigate or revert some of the greatest challenges we are facing today, including climate change, food security, loss in biodiversity, social equality and animal welfare. The purpose of this Framework is to enable sustainable, small-scale farmers long-term access to farmland at reasonable lease rates.

Terrafina Ltd., a wholly owned subsidiary of the non-profit Terrafina Foundation, will issue a land-backed, stable-value cryptocurrency, that falls under the classification as a security under Swiss Financial Market Supervisory Authority (FINMA) regulations. Capital raised through issued TerrafinaTokens (TFTs) is invested in Farmland-Stewardship Organizations (FSOs), providing them with the capital to buy large areas of land and securing it for sustainable use. To prevent Farmland-Stewardship Organizations (FSOs) from engaging in speculative land sales practices, Terrafina Foundation will hold a golden share in all FSOs, giving it a veto right on all land sales and changes to the statutes of the FSOs.

With this Framework in place, farmers will not be required to put up capital to buy the farmland but instead, will get long-term, affordable land leases for up to 99 years that are secured in the Global Blockchain Land Registry.

All land within this Framework will be cultivated according to recognized organic farming standards (e.g. EU Organic). At a later stage, a blockchain-based liquid democracy model will allow people to decide on the land-use criteria locally. The liquid voting system enables direct voting on issues or the ability to delegate voting power on specific topics to peers over a secure network without a central authority.

Terrafina Foundation will create a high-granularity Global Blockchain Land Registry that supplements nation-state land registries, ensuring that land ownership records are immutable – not susceptible to theft, corruption, damage or fraud, even by nation-states themselves. All relevant legal documentation and information from the national land registry, official land valuations, land-use criteria as well as all lease contracts shall become a transparent part of the blockchain land registry.

Farmland has consistently proven to be one of the most value-stable assets class. Thus TFT is guaranteed to maintain a stable valuation. All affiliated FSOs will be audited on a regular basis. Independent auditors will assess the net asset value (NAV) of Terrafina Ltd. and its affiliated FSOs based on official land valuations." (https://terrafina.org/assets/pdfs/v0.1.0.4_White-paper_A-global-blockchain-land-trust-framework.pdf)

Excerpts

Farmland-Stewardship Organization Cooperatives in Europe

Thomas Rippel on FSO's:

"Kulturland Genossenschaft, BioBoden Genossenschaft, and Terre de Liens are European FSO cooperatives founded in the past ten years. Their purpose is to end the problems created by commercial land grabbing by purchasing farmland and leasing it to organic farms at low fees. As of late 2017, 100 million Euros has been raised to purchase over 6,000 hectares of land. In early 2018, the Kulturland Genossenschaft conducted a pilot crowd-investing campaign that raised over one million Euros for one farm.

This cooperative model is however not without limitations. First, the investment is unattractive. Cooperatives charge farmers low lease prices to reduce their financial burden and thus are unable to pay dividends to investors. Due to the fact that share prices for the cooperatives are fixed, shareholders do not profit from any increase in land values owned by the cooperative. Additionally, investments in these cooperatives are highly illiquid. Periods of notice for the liquidation of shares can be up to three years in some cases.

Despite these limitations, a remarkable amount of capital has been raised for such a purely idealistic investment. However, it is becoming apparent that the model will most likely remain an investment niche and be unable to significantly tackle the challenges resulting from global land-grabbing. The democratic governance structure of FSOs creates the second problem. A qualified majority of shareholders could decide to sell the land and monetize unrealized profits of the cooperative. This constellation could lead to a dangerous misalignment between the financial interests of shareholders and the core mission of the cooperatives to protect land from financial speculation." (https://terrafina.org/assets/pdfs/v0.1.0.4_White-paper_A-global-blockchain-land-trust-framework.pdf)

Blockchain Technology for Land Registries

Thomas Rippel:

"The versatility of blockchain means that it is widely considered as a way to manage financial transactions, asset transfers, and regulatory obligations. Blockchain is seen by many as the future of land registration. Blockchain has been touted as the future of land registries because of its myriad of benefits. The technology has the potential to significantly reduce property fraud. Each property would be assigned a unique code and linked to a smart key, held by the owner only.

Blockchain technology also underpins ‘smart contracts’. A programmable contract self-executes when certain conditions are met, accelerating the registration process of land if a blockchain registry is used. Titles could be transferred automatically upon receipt of funds in the vendor’s account and ledgers updated immediately, thus eliminating gaps in the registration process and allowing greater efficiency and cost saving for land registries. Furthermore, blockchain could reduce many of the ongoing costs and demands for the management of land registries because property transactions and management information would be updated automatically and viewable in real time.

Several countries including Russia, India, Sweden, Brazil, Ukraine and the UK are currently developing blockchain technology for their respective national land registries." (https://terrafina.org/assets/pdfs/v0.1.0.4_White-paper_A-global-blockchain-land-trust-framework.pdf)

More information

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Accessed 8 Mar. 2018.