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DeepMarkit (MKT.V) is a promising company that owns MintCarbon.io, enabling access and transparency to carbon markets by providing a simple way for carbon offset originators and holders to “mint” their credits onto the blockchain. The global carbon market is booming and could increase 15 times to reach $50B by 2030 (Credit Suisse’s forecast). Compared to the market growth, DeepMarkit market cap seems incredibly meager.
First things first, let’s get to know what carbon offset credits are. Those are transferable instruments certified by governments or independent certification bodies to represent an emission reduction of one metric tonne of CO2 or an equivalent amount of other greenhouse gases. The purchaser of an offset credit can “retire” it to claim the underlying reduction towards their own GHG reduction goals.
Now, let’s focus on MintCarbon.io, the DeepMarkit solution. MintCarbon.io enables easy onboarding and browsing of carbon offsets on the blockchain. Users can track, trade, consume or retire their offsets simply and securely that everyone can have access to, anytime and everywhere. The growth in carbon markets is unprecedented, providing many new business opportunities. The significant increase results from continuous efforts to lower carbon emissions in several countries, led by Europe, which aims to become carbon-neutral by 2050. Moreover, the sector could attract more funding from financial institutions to increase the use of carbon credit and non-profit organizations to use them to fund and promote climate targets.
The company has partnered with two blockchain giants and an asset company to create strong foundations. Radiance Assets will introduce select carbon offset project owners to DeepMarkit for the minting of carbon offsets using the MintCarbon.io platform, Quanstamp, which is involved in blockchain security, and Polygon, which is a market leading layer-2 scaling solution, which can process up to 65,000 transactions per second with fees costing less than a fraction of a cent.
“The carbon credit market is an excellent example of how Web3 can improve liquidity in traditional markets. We are proud to provide [to DeepMarkit] the security foundation necessary for pragmatic use cases to thrive in the real world.” Quantstamp CEO, Roger Ma
DeepMarkit has two streams of revenue. The first one will result in a fee. Indeed, the company will collect a fee of up to 10% for the total value of carbon offsets minted through MintCarbon. The second will occur when a MintCarbon token is traded on the blockchain. To augment its addressable market, the company can receive fees and payments from Ethereum, carbon offsets, carbon offsets NFTs, or a combination of these options. The company aims to transform VCMs (Voluntary Carbon Markets) like the Internet revolutionized stock trading for 30 years. Moreover, thanks to blockchain technology, DeepMarkit provides 24/7 access to carbon markets through a platform that will facilitate offset trading on tokenized exchanges.
The company announced on November 11 it had successfully tokenized 150,000 carbon offsets for the company Will Solutions via its MintCarbon.io platform. Will Solutions also scheduled an airdrop event (a costless dispersion of cryptocurrencies, NFTs, or other tokens to users’ digital wallets) of 1,500 minter carbon offset NFTs at no cost to eligible platform users. Also, earlier in the year, DeepMarkit shared it entered into a Memorandum of Understanding with Renoster Systems to gain exposure to its platform thanks to Renoster’s network and by adding more transparency to MintCarbon.io on offset projects through Renoster’s review rating system. DeepMarkit will enormously benefit from this MOU. Among the agreements, the company will earn a 10% finder’s fee. Renoster will share the results of public reviews conducted using its evaluation techniques and eventually complete early-release reviews and pre-reviews to which DeepMarkit will also have access. In exchange, DeepMarkit will share access to its platform dashboard with a certain number of Renoster users.
The company has a strong balance sheet. DeepMarkit announced for the period ending June 30 that it had $1.95M in cash for no debt. It is counterbalancing the number of shares fully diluted that investors could think is high. The number of shares fully diluted is 211M, and 169.8M shares are accounted for shares outstanding. Moreover, the company can potentially raise $15.2M thanks to its warrants. There are 14,634,145 warrants at $0.1875 (Exp: Sep/Oct 2023), 17,340,000 warrants at $0.3125 (Exp: February 18, 2025), and 9,800,000 warrants at $0.375 (Exp: March 15, 2024). The stock price is currently at its 52-week low ($0.03) and far from its 52-week high ($0.2275). In terms of ROI, the stock gave a -76%. At first glance, you could think the stock returned a poor performance. Keep in mind the minor exchanges have been hardly hit. The TSXV index is down -41% YoY, and the CSE index is down by 55%.
We can say DeepMarkit (MKT.V) is an underdog in the industry. The company hasn’t generated significant revenues, but all the partnerships added to tokenization show the company’s potential. The drop in the share price is more likely linked to stock exchanges where many investors pulled their cash off, affecting the growth stock’s market value. The current share price represents an excellent opportunity to invest in a company with a low valuation but high potential.