Opinion by: Yog Shrusti, co-founder and CEO of Farmsent
Foodies, take note: If you’re ever in Bahrain, try machboos, a chicken (mutton or fish) dish with rice. Ideally, go for a place that serves it with fresh, locally sourced rosemary (really brings out the flavor!), and while you’re at it, ponder on this: How do you grow rosemary on an archipelago of primarily arid isles where growing anything is a challenge? The answer is vertical farming, and if you’re wondering what that has to do with anything crypto, let me tell you: Web3 is what this miracle of an industry needs to live up to its true potential — and possibly make sure we can carry on as a species.
The boons of vertical farming
One could argue that vertical farming is also the answer to challenges such as the degradation of fertile soil, which threatens to leave the planet with only tiny pockets of farmland by 2050. It could also help to alleviate world hunger, driven in no small part by the erosion of fertile soil, making food more accessible to millions of people. It’s a simple equation: With less and less soil to go around, we need something that helps us grow a lot in a tight space.
Equally simple is another equation. It’s not hard to see how less fertile soil will mean less food. Scarcity brings up the price, as Web3 knows. Food will get more expensive, year after year. And when food prices go up, other things start falling apart, too. The “carry on as a species” might have been a bit too dramatic, granted, but the link between food availability and social upheaval is clear.
Recent: How AI is revolutionizing agriculture
That being said, vertical farming is still trying to find its footing. Regular growth pains, one might argue, will pass with more maturity and technological evolution, but venture capitalists beg to differ. Vertical farms, projects that could save the life-critical agricultural industry, are struggling to raise funds. As such projects usually require a lot of upfront investment, they can only turn to major funds, not smaller players. In other words, traditional capital, with its regular focus on short-term gains and a lack of vision, is failing an industry that’s growing more vital every day.
Web3 has a solution.
DePINs are the answer
Enter tokenization. Let’s quickly consider a success story from another industry: car-sharing. Vehicles are expensive, so a car-sharing service needs a lot of capital to expand its fleet. By tokenizing several Teslas in its fleet, a Viennese car-sharing service raised an entire 1.6 million euros with barely any marketing expenses. That’s obviously quite enough to bring quite a few brand-new vehicles into the service without any loan shark fins to look out for. Can this approach work for vertical farming, too?
Yes, very much so. The idea is pretty much the same: You slice up the revenues generated by a vertical farm and allocate some of those toward tokenholders. As high-tech and often largely automated projects, vertical farms lend themselves nicely to tokenization, with their sensors and various other machinery hashing operational data onchain for observability and smart contracts managing the reward distribution.
That enables the project to generate the upfront liquidity needed to deploy the costly hardware and cover other costs. The same goes for regular farms, which already have established clients and need funds to scale up and innovate. This way, architect projects don’t have to vie for the mercy of significant VCs. They can take their ideas to the global Web3 community, which would consider them and back the ones that seem worth a try. With this lifeline, vertical farms can reach the point where their efficiency makes it possible to compete with regular farms across the board, not in some specific cases.
Blockchain technology adds another layer of transparency to the process. When everything runs on smart contracts, you have clear visibility into the sales and revenues generated by the farm. This would give the project’s backers a clear overview of its performance and enable them to make more informed decisions. On top of that, onchain fruits and vegetables are a lot more traceable, enabling buyers to pinpoint how their greens were sourced, which is good for environmentally minded consumers and is also helpful for supply chain management.
The movement bringing Web3 into real-world industries and businesses is rallying around decentralized physical infrastructure networks (DePINs), Web3’s hottest sector, which also has the potential to become an agricultural superpower. Imagine rooftop gardens in every city, producing fresh food for local communities. With DePINs, this dream is closer than ever. We’re not just talking about growing lettuce; we’re talking about rebuilding our food systems from the ground up for the long-term benefit of all of humanity.
The future of food is vertical, decentralized, and delicious. Let’s grow!
Opinion by: Yog Shrusti, co-founder and CEO of Farmsent.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
