KIP-43: Coorest - Digital Environmental Asset Liquidity Program (DEALP)

optima

Summary
Whitelist Coorest as the pilot partner for KlimaDAO’s Digital Environmental Asset Liquidity Program (DEALP) and deploy a flagship KLIMA/CCO2 pool.

Motivation
The need to expand carbon liquidity within the KlimaDAO ecosystem is paramount in our continuous pursuit to streamline and stabilize environmental commodities markets. Coorest has agreed to be the launch partner of the Digital Environmental Asset Liquidity Program (DEALP) - enabling the bootstrapping of a KLIMA/CCO2 pool. KlimaDAO and Coorest are strategically positioning ourselves at the forefront of innovation, scalability, and accessibility.

This partnership aligns with our mission by leveraging both Coorest's technology and KlimaDAO's financial & technological acumen. It not only creates a synergistic collaboration but also provides a robust framework to fortify the liquidity and availability of carbon credits, thus contributing to a more fluid and resilient market. The proposed terms and parameters have been crafted to ensure fairness, balance, and the mutual growth of both parties, underlining our commitment to fostering a diversified and interconnected ecosystem.

Coorest will be the pilot partner for the Digital Environmental Asset Liquidity Program, which offers bespoke liquidity solutions to counterparties looking to create liquid markets for their environmental assets.

Proposed Terms
DAO Swap

KLIMA Price: 100 CCO2
Total CCO2 sent to KlimaDAO from Coorest: 2,424,242.42
Total KLIMA sent to Coorest from KlimaDAO: 24,242.42
Coorest to use KLIMA to bootstrap a KLIMA/CCO2 LP
KlimaDAO to hold CCO2’s, never to be sold in the liquidity pool.
KlimaDAO may list CCO2 on Carbonmark at any time.
CCO2 Swap Modeling here

Proposed Parameters
Whitelist Coorest for usage of KlimaDAO’s DEALP contract with the following conditions:

LTV: 100%.
Global debt limit (max borrowable amount): 25k KLIMA.
Interest rate: 0%.
sKLIMA deposit, sKLIMA repayment to retrieve CCO2/KLIMA LP.

Execution:

A vote in favor of this proposal supports these dependent actions of Coorest and KlimaDAO:

1a) Coorest will transfer 2,424,242.42 CCO2s to KlimaDAO immediately upon proposal passing.

1b) KlimaDAO will make payment to Coorest in KLIMA tokens, equal to 24,242.42 KLIMA tokens at a fixed price of 100 CCO2 / KLIMA immediately upon receipt of CCO2.

2a) KlimaDAO will deploy the DEALP contract to open a loan facility that allows Coorest to deposit sKLIMA, deposit CCO2, receive 100% LTV on the sKLIMA deposit, and deploy a KLIMA/CCO2 LP that is redeemable via repaying the sKLIMA deposit.

2b) Coorest will deposit sKLIMA and additional CCO2 to the DEALP contract at a fixed rate of 100 CCO2 / KLIMA to bootstrap a CCO2/KLIMA liquidity pool.

Conclusion
Embracing this collaboration with Coorest reinforces KlimaDAO's role as a leader in the decentralized climate finance space and signals our determination to pioneer pathways that enhance market efficiency and inclusiveness. By endorsing this proposal, we are taking an assertive step towards a future where carbon markets are more liquid, participatory, and capable of driving environmental impact.

If there is sufficient support, the KIP will move to Snapshot on 20/09/23.

AndrewSaul

Where is the LP going to be held? And where are CCO2 tokens currently living? Polygon POS?

optima

AndrewSaul LP to be custodied by smart contract and deployed via Polygon dex - most likely sushi.

CCO2 here: https://polygonscan.com/token/0x82b37070e43c1ba0ea9e2283285b674ef7f1d4e2 (no liquid market, yet)

sodiumstar

It’s not clear to me where the loan comes in. It sounds like Coorest is borrowing sKLIMA against sKLIMA, which seems silly. And who is depositing the liquidity pool tokens? I assume KlimaDAOs CCO2 tokens are part of the pool.

optima

sodiumstar The loan is an incentive for Coorest to LP - the contract allows for the deposit of sKLIMA and LPing of KLIMA -> so Coorest still captures any AKR KlimaDAO produces.

Coorest will deposit sKLIMA and additional CCO2 after the swap - KlimaDAOs CCO2 tokens are not part of the pool.

AndrewSaul

optima Sushi is less and less a good idea. It's becoming clear that place is winding down. I would be surprised if if it was still operating come early next year.
You might want to investigate a pool on Uniswap Polygon as that is a much safer bet as goes DEXs. Or maybe some internal pool on the 1inch network (though your volume will be the issue there).

KTOR

There are clear advantages to KlimaDAO here. This pilot will strengthen the DAO's position in the climate finance space, advance innovation in the DCM through a diversified and interconnected ecosystem, and promote a more efficient, accessible carbon market more generally. The partnership as it is envisaged here seems low risk, and I fully support it.

Looking ahead, I'd be interested to learn what future synergies have been identified between Coorest and KlimaDAO if the pilot succeeds.

Dionysus

AndrewSaul I agree 100% with you. IMO it makes sense to migrate existing tokenized carbon liquidity to Uniswap at this point.

There's a reason players like Solid World leverage Uniswap's infrastructure for their own platform.