Many Fisheries Aren’t Sustainable, But Ethereum Might Help
Blockchain has various food-related use cases – from beef to beer – but the technology’s applicability extends to the open seas (no, I’m not referring to OpenSea). Specifically, fisheries and the ways they are governed could benefit from blockchain. But first, some context:
A Brief Lesson About Fisheries
Within the fishing industry, there are entities called fisheries, which are tasked with raising or harvesting fish. More broadly, the definition of “fishery” includes the fish that live in a region and the fishers who catch them.
In total, fisheries are responsible for the employment of millions of workers around the world and the production of millions of tons of fish every year. Like any industry, especially one of this size, fisheries need to be managed.
Fisheries management, as it were, is a field dedicated to the protection of fishery resources, including the enforcement of sustainability-focused rules and regulations. Various inefficiencies exist, however, that ultimately enable overfishing (which also results in more bycatch, or unwanted sea animals caught together with fish). For example, certain areas do not possess stringent enough rules, some fisheries do not follow scientific advice, and there is often opacity regarding how the fish are caught.
Recognizing these issues, developer Darren Zal decided to create Fishare, a fisheries management platform on the Ethereum blockchain. He told ETHNews about some of the benefits blockchain tech could provide to fisheries management, namely transparency:
“Blockchains can be engineered for both transparency and opaqueness. Both are important and useful for fisher[ies] management, but I think the biggest benefits are from transparency. Fishers want to know who they are doing business with. Regulators want to know the rules are being upheld. Buyers along the supply chain want transparency to know what they are buying. Even for consumers, they want transparency into what they are eating, where it came from, etc.”
Transparency is a broad subject, but it encompasses many of the problems within fisheries management systems. For instance, blockchain’s immutability could help ensure that fisheries were adhering to their quotas and not overfishing.
Indeed, Fishare is based on individual fishing quotas, which essentially means a total allowable catch (TAC) is established and then divided into shares that are distributed to fishers. In other words, fishers can only catch up to their portion of the TAC each season, though they often can buy more shares from other fishers (or even from non-fishing-related brokers, depending on the system).
Not specifically tied to blockchain tech, the catch share model has been a part of fisheries management for decades to promote sustainable fishing practices, such as reducing bycatch, encouraging collaboration among fishers (which is important to avoid the tragedy of the commons), and providing reliable full-time jobs to fishers instead of seasonal gigs. When fishers are not racing to catch as many fish as possible, the fishing industry and the environment both benefit.
The implementation and enforcement of catch shares, however, is not a panacea. Zal brought up a few concerns, including the potential centralization and monopolization of fishing rights.
Within the catch share market, brokers may charge high transaction or leasing fees to fishers looking to acquire more shares, but not all fishers have the capital to participate in the share market. Therefore, shares may become concentrated among a few wealthy entities, as they are the only ones able to make the investment.
Zal believes blockchain tech may alleviate the situation. “There are ways that blockchains like Ethereum could help finance small businesses, for example, allowing them to use assets like boats as collateral for loans,” he explained. Within such a blockchain-based collateral system, fishers lacking conventional financial capital could lease shares they were unable to afford before.
Despite its potential, Fishare represents more of an introduction into how blockchain may support fisheries management. Extending upon the loan solution, for instance, Zal mentioned the possible integration of asset-backed lending protocols such as MakerDAO. In this case, the stablecoin DAI would mitigate the risk of volatility, as the cryptocurrency is tied to the US dollar.
Another possible improvement to Fishare includes the use of zero-knowledge proofs so that transactions among fishers, brokers, and other stakeholders remain private (though everybody still knows a transaction occurred). Of course, fisheries management necessarily includes regulation, so these proofs could be built with view-only access (in certain circumstances) to give regulators access to the transaction details.
Although the platform was created with fish in mind, Zal said the system’s modularity also enables developers to repurpose the technology for other assets. “For example, catch shares are basically a cap-and-trade system, which is used to manage oil and gas in some jurisdictions,” he elaborated. Many possibilities exist beyond the project as it appears today.
Fishare, with its reliance on catch shares, refines an existing system through the incorporation of blockchain tech. Rather than upending the current catch share model, the platform adds elements of transparency and financial leverage to further promote the goal of sustainability that initially prompted the development of catch share programs. In this way, a system like Fishare can build upon the stewardship efforts already being pursued by fisheries around the world.
Blockchain won’t save fisheries, but the technology represents a different way to approach problems with their sustainability and management.