Why Verra's Deal With Hedera Really is a Big Deal

This article was written by Steve Zwick, Co-Founder at CarbonParadox in reference to the announcement of the strategic partnership between Hedera snd Verra.

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The ALLCOT Blue Carbon Mangrove Restoration Project (4653 in the registry) has quietly made history. It’s the first carbon project developed under a fully digital methodology to enter the validation phase. If all goes well, this could mark the beginning of a much-needed overhaul in how carbon projects are verified and approved.

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Instead of relying on endless PDF files and scattered emails, this project uses a digitized version of Verra’s VM0033 methodology, which covers tidal wetland and seagrass restoration. It’s also the first to move through Verra’s backend systems as structured data, not documents—cutting down on review time, lowering costs, and reducing human error.

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The timing isn’t accidental. Verra just announced a partnership with the Hedera Foundation, which manages the Hedera Guardian platform—a blockchain-based system designed to track digital methodologies. The goal: modernize the carbon market’s plumbing. Verra provides the infrastructure, ALLCOT handles digitization through its ALLCOT.io unit, and Hedera brings the ledger technology.

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For years, validation has been the slowest and most expensive part of project development. Reviewers had to comb through dense project documents and re-do calculations by hand. The process often took months. With digitization, project data is submitted in machine-readable format and routed to the right reviewers. Built-in checks catch obvious mistakes before the project is even submitted.

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“This is the first time we’ve had a fully digital methodology go from start to finish,” said Raphaël De Ry, head of digital innovation at ALLCOT.io. “If we can bring turnaround times down from months to weeks, that alone is a major improvement.”

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The project’s underlying methodology—VM0033—is no small document. The base version includes about 8,000 lines of code. With the 40-year forecast logic built in, it grows to around 30,000. ALLCOT used its own software platform, Straatos, to make the entire thing machine-readable and integrate it with Verra and Hedera’s systems.

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It wasn’t a simple job. Verra had to build new systems to accept the digital input. Hedera provided the blockchain architecture. ALLCOT had to translate a technical document into structured code. "We were solving the puzzle from three different angles," De Ry said. "Now the loop is closed."

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Once approved, the digitized methodology will be open source. Anyone can use it. To encourage more development, Hedera is offering $5,000 bounties—up to $250,000 in total—for each new digital methodology submitted and accepted.

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The long-term goal is to create a fully digital MRV system—monitoring, reporting, and verification. That means once a system is validated, projects can plug into it and stream in data continuously, potentially enabling quarterly credit issuance instead of waiting years for field visits and audits.

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This could open the door for smaller projects, especially community-based ones, that have long been excluded due to high validation costs. “In the past, if a project was under 1,000 hectares, we had to say no. We couldn’t justify the cost,” De Ry said. “That’s starting to change.”

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Eventually, these systems may also improve transparency in benefit-sharing. In theory, future versions could track how carbon credit revenue is spent—whether it’s paying teachers, supporting clinics, or restoring ecosystems—using digital wallets and audit trails.

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For now, it’s just one project. But it’s a signal that the back office of carbon markets is finally catching up to the front-end rhetoric. And that’s long overdue.

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