Frequently Asked Questions

  • Introduction
    • What does Xpansiv do?
      • Xpansiv refines raw commodity data into transactable products. We collect primary and secondary data from commodity-production and supply-chain systems and convert it into a high-resolution, high-integrity data format called Digital Feedstock™. Digital Feedstock captures, tracks, and verifies each underlying commodity’s attributional profile and characteristics, converting production information into digital assets. For the first time, it’s possible to map, buy, and sell unique attributes that are permanently traceable—from source to market.

    • What is the Xpansiv Platform?
      • The Xpansiv Platform powers a first-of-its-kind marketplace, offering complete and timely information that redefines value based on impact. We convert raw production information into immutable digital assets—information that can be transacted and utilized to mitigate risk, create supply-chain transparency, verify compliance, and myriad other practical applications. The output of the Xpansiv Platform is Digital Feedstock.

    • What is Digital Feedstock?
      • Digital Feedstock is a digital representation of commodity data. It includes the physical and environmental realities of production, transportation, storage, and consumption. Digital Feedstock was developed using data science, digital-verification standards, third-party energy and environmental standards, cryptography, and distributed-ledger technologies.

    • What is a Digital Feedstock product?
      • A Digital Feedstock product is a package of attributes derived from a specific commodity source. In the case of an MCF of natural gas, for example, a corresponding Digital Feedstock product records the time and location of production, and also captures and certifies the deep attributional profile of all relevant information about the physical and qualitative metrics of production, e.g., the composition of natural gas liquids and co-produced CO2. Digital Feedstock is appended as the gas flows along physical infrastructure—through gathering systems, into processing facilities where it can be split into constituent components, through pipelines, into and out of storage, and all the way to end users. Digital Feedstock products can be digitally, contractually attached to the underlying commodity as a mechanism to record physical transactions. A unit of Digital Feedstock can also be detached at the point of production and digitally attached to another physical unit by a buyer eager to meet demand for resiliency, sustainability, and climate-risk management.

        Digital Feedstock reveals and codifies the differentiated intelligence about operational and environmental metrics. In the case of agriculture, that intelligence would include attributes like water, fertilizer, GMO, labor, non-deforestation, etc. In the case of oil and gas, Digital Feedstock can include flaring, fugitive methane emissions, hydraulic fracturing, and so on. In addition to source data, Digital Feedstock can also include secondary sources, such as environmental standards and certifications (e.g., IES Trustwell Gold) and data from drones, satellites, and methane sniffers. The Xpansiv Platform is also inclusive of developing technologies like AI, IoT, and the continuing convergence of algorithmically derived decision-making.

        The Xpansiv Platform is designed to enable unprecedented opportunities as digitization becomes ubiquitous. The market will decide what to do with this deeper information as commodities are tracked, contextualized, and verified—from creation to consumption.

    • Is Digital Feedstock a cryptocurrency?
      • Digital Feedstock is not a cryptocurrency, it’s a data format. Digital Feedstock is the delivery mechanism for commodity-market participants—i.e., buyers and sellers of quantitative and qualitative attributes as non-financial intangible assets.

  • Trading Digital Feedstock
    • Can Digital Feedstock be traded?
      • Digital Feedstock products are tradable, non-financial digital assets. Trading is possible either as a whole—where a unit of Digital Feedstock represents the entire attributional profile of one unit of commodity production, tradable alongside the commodity (e.g., physical barrel of oil or MMBtu of natural gas)—or in part, where an individual production or supply-chain attribute is transacted separately from the reference commodity. The latter case is most applicable when transacting environmental attributes.

        For example, a natural gas producer can generate natural gas from wells that have been certified to meet the ”Gold” or “Platinum” threshold requirements of the IES Trustwell Ratings System. Xpansiv collects data from the IES-certified wells and converts it into Digital Feedstock. One “attribute” of the resulting Digital Feedstock file generated is the IES Trustwell “Gold” or “Platinum” certificate for the reference gas volume equivalent (e.g., 100,000 MMBtu), produced over a certain time horizon (e.g., April).

    • Who would buy Digital Feedstock, and why?
      • This is a nascent market, but responsible supply-chain sourcing will define natural gas procurement for years to come. The most recent transaction in this space was Southwestern Energy’s sale of IES Trustwell Responsible Gas to New Jersey Natural Gas in September 2017 (more details here).

        The Xpansiv Platform enables the market for responsible natural gas to scale. Instead of producers having to sell specified “responsible” volumes of oil and gas to buyers, they’ll be able to sell the attribute of responsible production as a unit of Digital Feedstock, and market their physical volumes in an economically optimal manner.

    • Is Xpansiv buying the Digital Feedstock?
      • Xpansiv does not purchase, own, or take title to any production-source data, nor does it own or control how—or at what price—a producer takes its Digital Feedstock products to market. Xpansiv is a “data refinery,” converting source production data into a tradable digital asset. We’re also the “digital pipeline” that allows the “virtual commodity” to get to market. Xpansiv is agnostic as to the certifications or actual market product created. We are simply digitizing data into something that can be differentiated and monetized.

    • How does Digital Feedstock trade?
      • When a producer creates an account and onboards raw production data to the Xpansiv Platform, Xpansiv converts that information into an inventory of digital assets, which producers can view on the Xpansiv Registry. Producers can package this inventory into Digital Feedstock products based on the attributes of the underlying production, and move those Digital Feedstock products to a trading account.

        Xpansiv has entered into a relationship with CBL Markets, a leading environmental products exchange, to create new contracts backed by Digital Feedstock. Participants on the Xpansiv Registry can directly list Digital Feedstock products on CBL Markets, creating the first ever direct link between source production data and traded contracts.

        The first Digital Feedstock products listed and available for trading will be IES Trustwell Responsible Natural Gas Certificates. Digital Feedstock is the basis of exchange, bilateral, and (eventually) smart contracts, and CBL is our regulatory compliant marketplace to transact and settle those contracts.

        In the future, Xpansiv will offer participants the ability to design and sell whatever Digital Feedstock products the market demands. The Xpansiv ecosystem is designed to enable the trading of any production or supply-chain attributes deemed valuable—either separately, or alongside physical volumes of traded commodities.

    • Is trading Digital Feedstock the same as trading physical oil & gas?
      • Yes and no. The first set of Digital Feedstock products listed by producers are digital representations of the bundle of physical commodity attributes associated with the commodity’s certification (under the IES Trustwell rating system). The Digital Feedstock products are therefore non-financial, intangible assets that exist independent of the physical commodity, and represent the owner’s ability to claim such attributes. These initial Digital Feedstock products can be bundled with transactions involving the source commodity—but do not need to be.

        Going forward, as more and more physical systems and associated productions are onboarded to the Xpansiv Platform, Digital Feedstock products can be packaged to include the ability to trade physical commodities and attributes as unified digital assets. Producers will be able to list Digital Feedstock products that contain smart contracts for physical commodity trades as well as all verified digital representations of the associated attributes. The transfer of Digital Feedstock between accounts on the Xpansiv Registry can be used as evidence of title transfer.

        For physical transactions, Digital Feedstock can function as a “virtual assay” of production. In that capacity, the opportunities for optimizing physical trading and streamlining payment processes are enormous.

  • Transacting Sustainability Attributes
    • How can an attribute of production be traded separately from the physical commodity?
      • For decades, attributes have traded separately from reference physical commodities as divisible, intangible assets. For example, renewable energy credits (RECs) are static, proxy representations that signify one MWh of energy was generated from a qualifying renewable resource. Each REC has a reference serial number to effect physical settlement, and contains a bundle of clean-energy attributes associated with actual energy production from that resource. Buyers then purchase a volume of RECs independent of the actual electricity, taking title to the ability to claim the attribute—but not the physical commodity itself. The buyers can then attach those attributes to conventional power, and retire them in order to claim the purchase of clean energy.

        This traditional environmental market approach enables a fungible commodity (such as electricity) to be claimed as “wind power,” for example. The buyer of wind power is not paying for specific electrons that were produced at a wind farm; they are buying the right to claim the clean-energy attributes associated with the production of those electrons.

        Initially, Digital Feedstock products will operate in similar fashion, conveying property rights in the attributes. Like a REC, Digital Feedstock is the representation of separately traded attributes, and Xpansiv acts as the registry of transactions—validating the creation, transfer, and retirement of environmental attributes. Unlike traditional REC products, however, Digital Feedstock products enable buyers—for the first time ever—to transact the actual production data associated with a reference commodity. The Xpansiv Platform enables greater accountability and trust in environmental markets, born of the higher degree of technical integrity and digital verification that underpins Xpansiv’s data engine.

    • How does retirement work, when attributes can be traded speculatively multiple times?
      • Attributes are part of the “tradeable profile” of a production source. When a participant creates Digital Feedstock as part of an exchange contract, Xpansiv registers it within the ledger system. The Xpansiv Platform, in partnership with our connected exchanges, tracks each transaction in the append-only ledger and auditing system. Therefore, if the product’s contract spec does not require immediate retirement, the instrument can trade indefinitely. When an end-user wants to extract the claim of the underlying attribute set, they remove the units from the exchange and retire the Digital Feedstock. Xpansiv then generates the certificate of utilization, which can then be used in formal reporting for ESG purposes.

  • Transforming Source Data into Tradable Assets
    • How is Digital Feedstock created?
      • To generate Digital Feedstock, Xpansiv first works with commodity producers to collect baseline information about their physical assets. In the case of oil and gas producers, for example, these physical assets include oil and gas wells and related above-ground infrastructure. Depending on the degree of characterization required for a particular digital asset, Xpansiv collects as little or as much detail as required. For simpler products, this may only require revenue meter data and a certification. For more complex analyses, it may include completion schematics, process flow diagrams, hydrocarbon analyses, and the full suite of sensors on a platform. From there, Xpansiv identifies the existing meters attached to the physical assets, and interprets the data they generate in order to create a digital model of the asset. We then collect and apply validation and adjudication logic against the eligible data to determine whether or not the data achieves a threshold for environmental responsibility, based on third-party performance standards.

        Xpansiv collects real-time production data directly from producers by creating a highly secure, encrypted connection to production databases. After Xpansiv ingests production data, we refine and convert it—based on contract specifications—to create Digital Feedstock assets that convey the quantifiable data and qualitative value (e.g., certifications) of the underlying commodities. Digital Feedstock contains a dynamic view into every relevant attribute of production.

    • How complicated is it to onboard production data?
      • Xpansiv creates Digital Feedstock from raw production data at the request of a producer. Xpansiv can derive any number of attributes from the representative data, depending on producer discretion. This production data is segregated from all other producer data, and not commingled. The time and resources required to onboard data and create Digital Feedstock depend on the attributes of production the producer wishes to transact, the characteristics of the physical asset, and the availability and quality of the data. In the case of oil and natural gas—to the extent the assets are comprehensively metered and underlying documentation is available—we can characterize production to a high degree of resolution, quantifying production attributes like co-produced CO2, gravity, and sulfur content, as well as operational and environmental metrics like hydraulic fracturing, flaring, and fugitive-methane emissions.

        If that information is not available, Digital Feedstock can be created based on third-party certifications, where we simply require revenue meter data to create the digital asset.

    • What does a producer need to do on an ongoing basis to create Digital Feedstock?
      • Xpansiv requires a secure data connection to a producer’s database in order to continually receive data and refine it into Digital Feedstock. No special equipment is required, and the process is automated on an ongoing basis, requiring minimal resources on the part of producers.

    • Does Xpansiv require additional equipment or software to be installed?
      • Xpansiv does not require any special meter equipment or software to be installed by producers. We work with existing data, to whatever extent available. If producers want to package and transact Digital Feedstock products that contain attributes that are not captured or collected from existing metering or sensor data, Xpansiv will work with producers to identify how such data can be cost-effectively compiled and aggregated.

  • Integrity & Trust
    • What is the technology underpinning Digital Feedstock?
      • The information contained in Digital Feedstock is compiled from millions of data points collected from myriad complex physical systems, with resolution as fine as three-second intervals. To process this enormous depth of information, the Xpansiv Platform refines and structures data that contains nodes and edges representing physical meters, as well as the connections between those points. In order to reduce the computational intensity of representing a complex physical system, the model employs advanced data-analysis techniques, extracting deep information from limited observations.

        The digital inventory is then contextualized using matching and correlating algorithms to allow Xpansiv the ability to process and refine millions of data points per second. That real-time data is then packaged and productized to deliver digital assets that establish unique market value.

    • How can you be sure producers aren’t manipulating source data?
      • Xpansiv takes a multi-layered approach to establishing data integrity and preserving critical confidence in the source production data we transform into Digital Feedstock.

        Layer 1: Edge-Source Optimization: Xpansiv ensures that production data delivered to the platform is sourced as close to the generating device as possible. Xpansiv integrates with existing data-management systems to get direct access to production information, capturing data at granular time intervals to improve visibility into real-time processes. This integration enables us to confirm data integrity as close to the source as possible.

        Layer 2: Data Verification: As part of its thorough onboarding diligence requirements, Xpansiv mandates that companies demonstrate and attest to the veracity of every unit of their production data. This includes providing third-party documentation to enable Xpansiv to independently verify data integrity and claims made by the participating company. Xpansiv then screens and applies data MRV (measurement, reporting, and verification) standards to ensure that reporting accuracy is within an acceptable range. This includes data from highly regulated meters that companies are obligated to install and maintain by governmental authorities. These meters are designed to meet statutory accuracy standards for revenue metering and custody transfer, so that:

        • Revenue is allocated among fractional shareholders, royalties, and taxes
        • Production is reported to state and federal agencies
        • Producers are audited on these data and reports

        Transfer meters are calibrated on a specified timeframe according to API standards (as well as the U.S. Department of the Interior on federal lands) and require third-party calibration records. Companies that are not able to demonstrate data integrity and MRV standards are rejected, as are companies that fail to comply during ongoing engagement.

        Layer 3: Data Validation: Xpansiv applies data analytics to ensure reported data is consistent with historical data, performing checks on a resolution ranging from less than a second to hourly. We also compare company-supplied data to the data reported to state and federal agencies and third parties (e.g., midstream companies).

        Layer 4: Notice and Penalties: If, after investigating an anomaly, Xpansiv determines that fraud or data manipulation has occurred, we immediately notify all Digital Feedstock counterparties. In addition, onboarding companies agree that they are solely liable for deception of any sort, which would result in the suspension of their ability to generate Digital Feedstock, pending remediation to the satisfaction of Xpansiv and data-verification standards.

    • Does Digital Feedstock use blockchain technology?
      • Blockchain technology, a form of distributed-ledger technology (DLT), has garnered much attention as a solution to transactional challenges. Digital Feedstock uses similar principles, offering exponential benefits for digitizing commodity information.

        How Digital Feedstock Leverages DLT Features—Like existing DLT protocols, the Xpansiv Platform creates a new paradigm for managing data and transactions:

        • Framework: The Xpansiv Platform is an implementation of a data format (Digital Feedstock) with a set of core protocols governing participant behavior.
        • Account Management Functionality: Digital Feedstock commodity assets are created, transacted, held, and retired on a ledger. These digital assets and their associated attributes are verified against source data and linked with permanent, unique identifications.
        • Data Integrity: The ledger is an “append only” record of transactions, creating an immutable audit trail of production and transaction events. Cryptographic hashes provide actuarial-level proof of existence for data generated at the point of production.

        How Digital Feedstock Differs from DLT—The unique business requirements of commodity producers are not fully compatible with blockchain-like DLTs:

        • Complexity: Current blockchains are not equipped to handle the complexity of physical commodity systems. Digital Feedstock events are recorded at networked nodes which accurately reflect those systems.
        • Market Architecture: Commodity markets are designed to handle the transfer of physical and financial risks across a spectrum of attributes. With Digital Feedstock, the digital asset and its attributes can be bundled or unbundled, and referenced for a multitude of purposes.
        • Speed: Blockchains are historically capable of processing only several transactions per second. Digital Feedstock can process tens of thousands.
        • Privacy: Digital Feedstock operates on a private, central, permissioned system to keep customer data secure and confidential, but is designed to interact securely with emergent blockchains.
    • What steps does Xpansiv take to ensure data security?
      • Xpansiv ensures that all customer data is private by segregating virtual hardware in which production data is stored by the producer (single-tenant database). Furthermore, all data is encrypted in transit and at rest. Data encryption reduces risk across a number of scenarios. Most notably, if the data were stolen, it could never be viewed without access to a secret key.

    • Do buyers of Digital Feedstock see my proprietary production data?
      • No. When Digital Feedstock is transacted, only the marketable attributes are posted; any confidential information remains private. For example, if a producer has its natural gas production certified as “IES Trustwell Gold,” Xpansiv generates Digital Feedstock representing the certified volumes of natural gas, and creates an account for the producer to offer those certified volumes to the market.

        Xpansiv’s data refinery ensures the integrity of the certified volumes by linking them to source-production data. But the underlying data remains within the producer’s own account; the market sees only select information, and transacts the derivative certification attribute. The market never sees confidential production data.

    • How do you ensure volumes of production exist and aren’t counted multiple times?
      • The Xpansiv Platform is designed to ensure that traded products are unique and immutably connected to real production volumes. When producers integrate with the Xpansiv platform, we establish chain-of-custody to each unit of production, for each production source. That “fingerprint” is included in the Digital Feedstock that is generated. Every subsequent trade action stemming from the original Digital Feedstock is then treated as a new event to be validated before the transaction proceeds.

        Digital Feedstock is built upon an “append-only” auditing system, so input data cannot be altered and output data is considered a new entry. By validating the previous entries prior to performing a transaction, we “inherit” the chain-of-custody all the way back to the source.

    • How can you guarantee that product-specification rules were followed during a trade?
      • Xpansiv generates each Digital Feedstock product from source units of production that contain the attributes required to meet contract specifications. We encode business logic based on those specifications. We then test that logic, and verify outputs before any new products are incorporated into the platform. Once the product is active, this logic protocol acts as a filter of a producer’s eligible attribute sets from which they can fulfill trades. When a participant initiates a transaction, the Xpansiv Platform generates the underlying Digital Feedstock as part of the creation of those tradable products. The product ID is referenced within the provenance event, which also anchors the logic used in the creation of Digital Feedstock.

        Once a participant creates volumes of Digital Feedstock, the Digital Feedstock remains tied to that product specification in perpetuity. This means that subsequent participants cannot undo or change the content of Digital Feedstock in any way, and it’s permanently connected to the original product definition.

  • Methane Emissions
    • Can the Xpansiv Platform be used to track methane emissions?
      • Xpansiv’s platform can be used to characterize almost any attributes of commodity production, including fugitive methane emissions at the wellhead, and at any point further downstream where leakage may occur.

        The ability of Xpansiv to characterize methane emissions depends on the type and quality of data available. To the extent that the oil and gas assets are comprehensively metered and underlying documentation is available, we can characterize production to a high degree of resolution, quantifying fugitive methane emissions. If that information is not available, then Digital Feedstock can be created based on third-party certifications, where we simply require revenue meter data to create digital assets.

    • Do people really care all that much about methane emissions?
    • How is the Xpansiv Platform different than my existing process simulators?
      • Depending on the characteristics that producers wish to understand and market, Xpansiv can incorporate those attributes in the Digital Feedstock digital representation. In many ways, this is similar to existing process simulators. The difference is that Xpansiv is taking source data and converting it into transactable digital assets. Producers sometimes communicate highly detailed information from internal process simulators in order to relay responsibility efforts to stakeholders, but the markets remain understandably skeptical of the provenance and integrity of this information.

        Digital Feedstock is transactable—unlike data that emerges from a process simulator. Xpansiv allows producers to convert source production data into monetizable digital assets, unlike any digitization process available. The market decides the value of this information.

    • My assets are simple. How can they benefit from Digital Feedstock?
      • Xpansiv can add any number of attributes to Digital Feedstock volumes. Even with “simple” assets, Digital Feedstock can still be used to create value. For example, Digital Feedstock can be created based on third-party standards that require only a one-time certification process. In this case, Xpansiv would only need revenue meter data to create Digital Feedstock on an ongoing basis.