Chris Curl,
Editor
Aug. 15, 2024
Elmnts Secures Pre-Seed Funding for Mineral Rights Platform
Readers of Crypto Cycle are aware of my long-term support of the Solana blockchain.
I continue to watch for developments in the ecosystem and one project has recently caught my eye. It’s called Elmnts, and it seeks to bridge the gap between blockchain and natural resources.
You can check out their website by clicking here.
Elmnts, a platform built on Solana that focuses on tokenizing mineral rights—specifically the rights to extract valuable underground resources like oil and natural gas—has successfully raised $2 million in pre-seed funding at a valuation of $20 million.
The funding round was led by Graph Ventures, Foundation Capital, and B+J Studios. As outlined in an investor pitch deck, 45% of the funds will be allocated to development, while 30% is earmarked for legal and regulatory purposes.
Mineral rights can generate significant income, particularly for the gas sector. In many regions of Texas, oil and gas producers must provide property owners with a 25% royalty. Notably, the U.S. government collected $2.9 billion in royalties from oil and gas extracted from federal lands in 2019.
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However, co-founder Odai Ammar highlighted an important challenge: most mineral rights are being acquired by private equity, as there are often just a few auction venues for such rights, with minimum investments that can start at several hundred thousand dollars for individual investors.
Elmnts aims to address this issue by tokenizing a fund that holds diverse mineral rights assets, allowing investors to purchase shares in this fund. Compliance is maintained through Solana token extensions, which facilitate features such as confidential transfers and delegated authority coding for regulatory compliance.
The first Series 1 fund of Elmnts includes $400,000 worth of oil and gas rights across two drilling sites in Texas—one operated by Chevron and the other by ConocoPhillips and Mewbourne Oil Company.
Ammar also mentioned that Elmnts plans to introduce a second fund within two weeks and is gearing up to publicly launch at the Solana Breakpoint conference in September. While the mineral rights funds will be permissioned, a separate lending protocol named Atoms, created by Elmnts, will operate in a permissionless manner. This allows investors to collateralize their oil and gas tokens for borrowing within decentralized finance (DeFi), enhancing liquidity in the system.
Looking towards the future, Elmnts is also exploring opportunities to harness energy from flared gas—natural gas that is burned during oil extraction—to power mobile Bitcoin mining operations.
Elmnts is poised to enter a growing market of tokenized commodities, which is currently led by tokenized gold products from Tether and Paxos, boasting a combined market capitalization exceeding $900 million. This shows the potential for tokenization to revolutionize traditional financial markets, creating more accessible and liquid opportunities for investors.
On top of all that, Elmnts' use of Solana's high-speed blockchain technology allows for seamless transactions and reliable tracking of assets. With its innovative approach to tokenizing mineral rights assets, Elmnts is poised to disrupt the traditional energy sector and pave the way for a more inclusive and decentralized financial future.
Click here to stay up-to-date on revolutionary blockchain projects like Elmnts.
Keep coming back,
Chris Curl
Editor, Daily Profit Cycle