• General
  • Request for Comment - Flow Carbon/Goddess DAO X KLIMA Collaboration

Proposal

Introduce the Goddess Nature Token, GNT, into the treasury: specifically via, naked GNT, GNT/KLIMA, and GNT/USDC bonds.

Motivation

A collaboration between Flow Carbon/Goddess DAO and Klima will accelerate market adoption of tokenized carbon offsets, creating a liquid and transparent market. This market gives project proponents who create offsets access to instant liquidity, from the same pool that corporates can buy from at scale. Additionally, owning diversified, high-quality carbon assets and bridges will strengthen KLIMA’s treasury.

What is Flow Carbon?

Flow Carbon is a company based in New York that helps leading corporations, cultural institutions, tech companies, and individual buyers offset their carbon emissions by providing them with high-quality carbon offsets. As part of their operations, Flow is active at every level of carbon removal and protection projects, from helping finance projects – often nature protection projects – that are just getting started, to sourcing and selling offsets in the opaque and broker-dominated spot market. Having extensive experience transacting in the traditional market, Flow is now focused on leveraging Web3 to rebuild the carbon offset market as an open, accessible, transparent market with clear pricing and market-tracking quality benchmarks coded into different classes of tokens. Most importantly, it enables those doing essential projects that remove and store carbon to instantly bridge on-chain for access to direct liquidity.

Flow Carbon will be launching a Goddess DAO to govern the protocol in close proximity to the initial GNT launch, decentralizing governance of the project and enabling community decision-making. More details on the DAO will be posted in Flow Carbon’s Discord in the coming days.

What is GNT?

GNT is a bundle token composed of individual ERC-20 tokens called GCO2. Each GCO2 is backed 1:1 with one metric ton of un-retired carbon credits. Different GCO2 tokens are specifically linked to a specific batch of credits issued for a specific project. Each individual GNT token represents one metric tonne of carbon certified as an offset, and meets the following criteria, which directly track what corporate buyers are seeking in the market:

  • Certified by one of the market-recognized certification bodies, which currently are: Verra, American Carbon Registry, Climate Action Reserve, or Gold Standard
  • Certified pursuant to a nature-based methodology from the above registries (i.e. REDD/REDD+, ARR, IFM)
  • Vintage (issuance) year not more than five years old

The projects initially seeded into the Goddess Nature Token pool at launch include, among many others:

  • Katingan Mentaya, a very large forest conservation project in Indonesia that protects 943,676 hectares of rainforest and the habitats of 39 endangered species.
  • Luangwa Community Forests Project, a large-scale REDD+ project implemented in Eastern and Lusaka Province, Zambia with a project area of 943,676 hectares.
  • Russas Project, a large-scale forest conservation project in the State of Acre, Brazil with a project area of 41,976 hectares.
  • Madre de Dios Project, a REDD+ / CCB project in Peru focused on the protection of sensitive forest areas and endangered species in the Madre de Dios area with a project area of 7,749 hectares.
  • Valparaiso Project, a large-scale forest conservation project in Brazil with a project area of 28,096 hectares.

A litepaper on GNT can be found here.

Minting - The Two Way Bridge

Each GC02 token represents exactly one un-retired offset credit, held by Goddess DAO in a bankruptcy-remote, professionally managed, third party SPV account at one of the accepted registries, e.g. Verra, and attributed with a universally unique identifier (UUID). These UUIDs are published on Flow Carbon’s website and are used to create a checksum that links the individual carbon credits with unique tokens.

GC02 tokens can be minted and deposited into GNT pool tokens (more below) by anyone holding qualifying underlying carbon credits, by transferring those carbon credits to the SPV. Currently, no limits on minting are built-in; however, they could be added later, by DAO governance.

Bundle Contracts

While a VCU and the resulting GCO2 token originate from a specific project, its abstract properties may be the same as other credits. Hence, some VCUs have full fungibility across projects and can be bundled to represent a standardized underlying commodity. Multiple projects are thus bundled into one ERC-20 token contract – the GNT pool token – which represents the underlying commodity. GCO2 tokens can be added and withdrawn from the bundle.

Any token holder can unwrap the GNT for an individual GC02 from a bundle contract, for a fee. Additionally, any token holder can redeem a GNT for a live offset credit, for a fee. In this case, the live credit will be transferred to the token holder’s registry account off-chain.

GNT is the first bundle contract to be created by Goddess DAOand represents a pool of all nature-based credits. Future pools will have additional filters to create a variety of pools that serve different goals.

Retiring

The underlying carbon credit is retired when the token holder decides to do so. Retirement happens on-chain first and is later finalized in the SPV. Users will be able to retire GNT tokens held in their wallets using the Dapp on the Flow Carbon site.

To retire the underlying VCU of a GC02 token, the token needs to be burnt. For GNT, the contract burns the underlying GC02 project token and increases the retirement balance on the bundle. When a minimum number of tokens have been burnt on-chain and are awaiting retirement, the retirements take place in the SPV’s registry account as a batch, which receives a UUID. Checksums are used to link between off-chain and on-chain processes explicitly and in a tamper-proof manner. This allows for retirements of partial tons. Users who wish to have large batches of retirements made at the registries in a specific fashion can have those instructions executed by the SPV.

Purchasing & Trading

GNT will trade on AMMs on Polygon for anyone to purchase. Retail and corporate buyers will also be able to buy GNT off-chain via Flow Carbon’s website, using fiat.

Flow Carbon will be seeding the initial liquidity of the AMMs with a minimum of $5,000,000.

Third-Party Audit and Attestation

Flow Carbon has completed a security audit from Quantstamp. Details can be found here.

Flow Carbon has engaged a well-respected US accounting firm to conduct specified procedures that support the following assertions:
At any given point in time, the number of live credits held by the SPV matches the total supply on-chain for any given project
At any given point in time, the number of retired credits held by the SPV matches the total of retired tokens for any given project
Values can be independently verified on a blockchain scanner, and on Verra. To verify the individual tokens, the event log is checked to confirm that the UUIDs match the checksums and the amount. If a token is added to a bundle, it is examined together with the bundle.

What is in it for KLIMA?

KLIMA DAO gains exposure and diversification from adding to the treasury high-quality carbon credits that maintain their off-chain value and can be created by anyone.
Flow Carbon is pledging a minimum of $100k in joint marketing spend to increase the public exposure of KLIMA and the Flow Carbon/Goddess DAO/KLIMA DAO partnership.
Flow Carbon’s corporate sales team will be selling offsets with on-chain pool tokens to buyers and will be educating offset buyers about the benefits of holding and staking KLIMA, via Klima’s ‘Klima Infinity’ program, as a way to meet their sustainability ambitions.
A minimum of 2.5% of the fully diluted DAO is being set aside for GNT/KLIMA and GNT/USDC liquidity mining.

Vote

For: Introduce GNT as a treasury asset with naked bonds
For: GNT/KLIMA bonds
For: GNT/USDC bonds
Against: Do not Introduce GNT, GNT/KLIMA, and GNT/USDC bonds

    Klima diversifying their treasury with high-quality offsets is a great idea!

    some questions:
    Is it going to be an added risk to the value of treasury if one of the GNT tokens gets retired? From the proposal, it looks like GNT credits are still active and un-retired.
    What is Klima Infinity?

      Awesome stuff. Sounds solid.
      Only thing I dont really get.. isn't Flow Carbon doing the exact same thing as Toucan Protocol with their TCO2?
      Why create your own DAO with your own TCO2-equivalent token?
      If too many peeps copy-pasta Co2-DAO's we could see a lot of different XYZCO2-tokens at some point which could get messy no?

      Maybe I'm just missing a point here... or maybe it works out as long as KLIMA DAO is backed by all existing Co2-tokens?
      Looking forward to hear back..

        Nice.
        Pathways to growth

        Love the synergy with Klima infinity as well!

        Great exposure opportunity to traditional market customer base and diversification of Klima's treasury.

        Can we be provided in greater detail exactly what the $100K marketing spend constitutes? High level just seems as though business will be as usual enabling Goddess DAO to operate in both markets with traditional customers staying on the paper side.

        Also will Klima trading for USDC thus be split between BCT/USDC and GNT/USDC pool or will it just remain against BCT pool? If remains the same, GNT only stands to benefit while BCT takes on price action pressure. This is key for voters to input an educated cast.

          Nice, definitely for!

          My concern here is jurisdictional: New York is extremely inhospitable to crypto.

          I recognize that the Goddess DAO will be notionally independent from Flow Carbon, but I don't know that the NY AG will see it that way. I fear that the connection between the two will be a pain point for Flow and subsequently for any assets that Klima accepts into its treasury.

          https://ag.ny.gov/sites/default/files/cease_letter_redacted.pdf

          Now, if you tell me that Flow is going to register with NYS and receive a BitLicense, then that's great, but I don't see anything here about that.

          https://www.dfs.ny.gov/apps_and_licensing/virtual_currency_businesses/bitlicense_faqs

            Anything to make the price of Klima go up XD

            sig

            Retiring them is an on-chain action of the holder. As long as KLIMA is the holder, they cannot be retired.

            I'm for expanding Klima's treasury to include high-quality tokenized carbon projects in this space given solid due diligence and rationale. Looking forward to a AMA with Flow Carbon / Goddess Dao to hear more.

            Mellow it's totally different. Goddess tokens are unretired offsets, meaning they are live assets that fully retain their off-chain value, and can be retired by the token holder. This also means they are usable by corporations, who will not buy retired carbon offsets. Lastly, the first pool of GCO2 tokens are higher quality, nature-based only which is what corporations will buy and there are already corporates and companies lined up to buy the token for their offsetting.

              Mellow We are set up quite differently than Toucan. Our credits remain un-retired when they came on-chain. So far we have not seen a DAO to govern the Toucan bridge.