AREC Bridge
In addition to issuing AREC based on renewable energy generation proof sourced from the Arkreen network, the AREC Dapp goes a step further by offering support for the issuance of AREC assets using classic REC assets like I-REC, TIGR, Green-e, and others. This unique capability, called as the AREC bridge feature, enables the seamless integration of traditional RECs from the physical world into the innovative Web3 ecosystem.
By bridging the gap between traditional REC systems and the decentralized Web3 world, the AREC Dapp unlocks new opportunities and synergies. It empowers individuals and organizations to leverage the power of blockchain technology and decentralized finance (DeFi) to accelerate the global carbon neutrality movement.
With the AREC Dapp as a powerful financial instrument, participants can easily trade, invest, and engage in various financial activities related to AREC assets. This fosters more liquidity, transparency, and efficiency compared to the traditional renewable energy market, enabling a wider adoption of sustainable practices and contributing to a more sustainable future.
The following diagram illustrates the 5 steps to issue AREC assets using the AREC Bridge:
Step 1. Register AREC asset
Not everyone has the authorization to utilize the AREC Bridge for issuing AREC assets. If you intend to issue AREC assets, it is necessary to contact the Arkreen Foundation first. The foundation will evaluate your qualifications, and upon successful qualification review, they will collaborate with you to determine the attributes of the intended AREC assets, including:
- asset description,
- issuance fee rate,
- liquidation fee rate,
- token address for payment of issuance fees, and
- the certifier address responsible for auditing and certifying the issuance of AREC assets.
In cases there is a need to independently deploy an ART token to hold your liquidized AREC assets, the Arkreen Foundation will take responsibility for deploying the ART token on the blockchain. This ART token address, along with the aforementioned information, will be included in the registration details of the AREC assets.
During the AREC NFT stage, AREC assets issued by different entities or individuals are distinct and separate. Whether it is necessary to create a separate ART Token for the AREC asset needs to be negotiated and determined between the issuer of the AREC asset and the Arkreen Foundation. If the Arkreen Foundation agrees, the same ART token can be used to accommodate multiple AREC assets issued by different issuers. This approach enables the aggregation of AREC assets from different issuers, providing the market with more flexibility and liquidity. It's important to note that only REC assets with similar characteritics are eligible for aggregation.
The registration of AREC assets is a one-time process. Once successfully completing the registration, you can issue AREC assets multiple times using REC assets that share similar attributes. Each issuance request will be reviewed by the Arkreen Foundation, and approval will be granted only if the REC assets meet the necessary requirements.
Step 2. Request to issue AREC
When you intend to issue AREC assets based on REC assets, you need to utilize the AREC Dapp to initiate an on-chain request for issuing AREC. Within this transaction, you will need to specify the quantity of REC assets you own and wish to convert into AREC assets. Additionally, you will be required to pay the corresponding issuance fees according to the defined issuance fee rate for the target AREC assets.
Upon completion of this transaction, an AREC NFT will be minted for you. At this stage, the NFT's status will be "Pending" and it is non-transferable and non-liquidizable. Please ensure to copy and store the ID of this NFT and the transaction hash value from the AREC Dapp, as you will need them for subsequent steps. Alternatively, you can retrieve this information using a blockchain explorer.
Step 3. Redeen RECs to to issue AREC asset
To redeem your REC assets, please follow the redemption process provided by the REC issuing entity. It is important to ensure that the quantity of REC assets being redeemed matches the specified REC quantity in the AREC NFT mentioned above. When declaring the redemption purpose, clearly state that it is for the issuance of AREC assets and include the ID of the AREC NFT along with the corresponding transaction hash value. Incorrectly stating the redemption purpose may hinder the subsequent steps of AREC asset issuance, potentially resulting in the loss of your assets. If you are uncertain about how to describe the redemption purpose accurately, please reach out to the Arkreen Foundation for assistance.
Step 4. Update AREC NFT details
Once the redemption of your REC assets is complete, you will receive a proof of REC redemption. Please save this proof as a PDF file and submit it to the Arkreen Foundation. The foundation will verify the authenticity of the proof and ensure that the information aligns with the issuance details of the AREC NFT. Additionally, the Arkreen Foundation will upload the PDF file to FileCoin for permanent storage and provide you with the CID (Content Identifier) to access the file.
After obtaining the CID, you need to complete the missing information of the AREC NFT on the blockchain. This includes the actual start and end date of the renewable energy generation for the REC assets, the production region of the REC assets, the CID of the redemption file, and the access URI link to the redemption file. Once these details have been added, please allow the Arkreen Foundation some time to review and verify the information.
Step 5. Certify AREC asset issuance
The Arkreen Foundation regularly monitors the status of AREC NFTs issued on the blockchain. When the issuance information of the AREC NFT is complete, a thorough review will be conducted to ensure the integrity, consistency, and authenticity of the AREC asset issuance details. If the review is successful, a transaction will be initiated on the blockchain to approve the issuance of the AREC asset. At this stage, the issuance of the AREC asset is considered successful, and the AREC NFT can be normally transferred, redeemed, or liquidated.
If the review is unsuccessful, the Arkreen Foundation will reject the issuance of the AREC asset on the blockchain. In such cases, you need to update the information of the AREC NFT and await another round of review and verification.