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  • Request for Comment: Toucan NCT Bonds

tiltom see my comment above re. specific dates (outlined here https://governance.toucan.earth/t/rfc-governance-process/16)

In regards to a single standard, we are referring to TCO2s, the semi-fungible carbon tokens that back BCT and NCT; not BCT or NCT or any trading pairs (as a large advantage of on-chain carbon is that it can easily and verifiably be retired by anyone, not only traded or held).
Having one single carbon token standard while still preserving the attributes and complexity of carbon credits addresses many issues with the existing carbon markets, like fragmentation of credits in different registries, while at the same time still allowing a healthy carbon trading system.

I Wholeheartedly agree with the sentiment here from all the apes and I think it's absolutely ridiculous that you guys even consider the fact that it might be OK for you to come arbitrage 5 million dollars of value out of the Treasury and ask klima to burden seeding your pool back at a higher price with new investment that you alone benefit from. You guys are fucking crazy. I hope no one votes yes on this

I personally am okay with the mass rebalancing undertaken by Toucan. I think they acknowledged that there was an oversight in the structure of their token and they took the steps to retain value. I am also confident that once they have established better community governance that the rescued value will make its way back to Klima. I am not okay with delaying bonding of NCT as it delays climate action and stalls the accumulation of credits. I feel a lot of the votes here are spiteful and many of those on this forum have whipped themselves into a frenzy and are overstating the impact to Klima. I understand price is down, but it’s not because of the mass rebalancing.

    ela How you can claim that the value was never priced into BCT is really beyond me. If you do a back of the envelope calc, you can easily see that based on the suggested volumes and using $8 as a reference, it is anywhere between 25-50 cents per BCT. Granted, not massive, but BCT is currently at $4 and used to be at $5+ before the actions. If NCT doubles and goes to $15, then we are looking at close to $1 of value. Now, multiply this by the BCT held in the treasury and then let us know again why we should be fine with the resulting loss.

    This is a no for me until the aforementioned issues with the BCT pool raid is resolved.

    I can't believe the Toucan team expects the KLIMA community would ignore what amounts to theft from the KLIIMA Treasury.

    @Robdog This request amounts to adding insult to injury. Write the wrong that has been committed against the KLIMA community then we can discuss a path forward.

    Very interesting commentary. A few thoughts:

    1. NCT is the first liquid nature-based carbon token. As @greevesie suggest: delaying bonding delays climate action ... something we should all be against.
    2. Some (including IBuyShitCoins in the first post) are suggesting the Toucan team captured this value. It has been made clear this was not the Toucan team, but instead liquidity partners that will ensure liquidity for the long-term of the ecosystem (we've seen the value not captured aggressively dumped in recent days).
    3. I have trouble understanding what alternative route could've been taken? For reasons discussed, KlimaDAO could not have been involved due to challenges bringing this through governance.
    4. Toucan has done a nice job communicating their plans for a governance structure to help determine the future of the funds used in the mass rebalancing. Resolving the exact details will take time, but going back to point #1 climate action should not wait.

    As mentioned above, we are working with the community to align on what to do with the value secured in the mass-rebalancing action, and invite everyone to submit formal RFCs here: https://governance.toucan.earth/c/mass-rebalancing/2

    You can also add comments on our proposed governance process here: https://governance.toucan.earth/t/rfc-governance-process/16

    We are definitely not asking the Klima community to look the other way; on the contrary, we are hearing you loud and clear, and are open to any alternative courses of action you might suggest.

    greevesie I have no spite towards the Toucan folks, but I fundamentally cannot support taking the same assets back into our treasury at a higher price. At least until a formal agreement is put in place to return value, which I am surprised was not included with this proposal frankly.

      sirthus We invite you to put forward a formal RFC on our Governance Forum, with your suggested course of action.
      The reason why no agreement was included is that we are giving the community time to discuss our proposal and put forward their own.
      We are aiming to announce a final decision on the allocation of the funds on 11/3. You can see our suggested governance process here: https://governance.toucan.earth/t/rfc-governance-process/16.

        sirthus I personally think that Toucan could have just distributed NCT tokens among BCT holders in proportion to the size of BCT holdings at the time of the arbitrage. After all, it was BCT holders who were affected by the arbitrage, so they should be the ones to benefit if the goal of the arb is to rescue value and then return to the status quo pre-arb. The fact that Klima--who holds most of BCT supply--would get the majority of NCT is also part of that.

        But then again, I might be wrong. It's just my personal thoughts, after all.

        Thank you all for your thoughts and considerations. We appreciate everyone's feedback and opinion on the matter and want to make sure that everyone's heard and concerns are adressed.

        As @ela mentioned we have been very open and transparent with the community to ensure that everyone gets all the information that we have as to why the rebalancing was necessary, how it unfolded and what will happen with the funds. The whole team has been working hard the last weeks to introduce our new government process and intensify our commitment to communicate closely with the community and our partners along every step. You should all head over to the Toucan forum and participate 🙂

        The same level of care went into preparing and launching NCT and we wouldn't be posting this RFC if we weren't convinced of the opportunities NCT bonds will have for the Klima and Toucan partnership:

        Toucan and Klima have together successfully created a global floor for the Voluntary Carbon Market with BCT. Now is the time to raise the floor and bring in the quality that the planet needs to regenerate the biosphere and build the regenerative economy our planet needs.

        NCT was designed to create the highest level of quality possible in the VCM and introducing NCT bonds will send healthy ripply effects across the whole market, create fresh demand for buyers, set new incentives for the ecosystem and bring synergy effects to Klima by increasing the utility of it's carbon stack and further diversify the Klima treasury.

        We hope that you can see all our efforts to make things right and move forward together, so we can all be part of this and accelerate climate action together. 🌲

        IBuyShitCoins

        Toucan chose to launch liquidity itself without the help of Klima. Why are we needed to bond liquidity? We would have to build up substantial KLIMA-NCT liquidity before any volume would travel through the pool. If Klima was made aware of the new standards it would've been fair to allow Klima to claim ~ 90% of the arb using our treasury (since we held ~ 90% of the BCT supply). Then Klima could've used that newly minted NCT to form a KLIMA-NCT pool. But now Toucan already has an NCT-USDC pool, which breaks Klima's goal of being the central carbon trading pair of the on chain market.

        I just want to clarify this mis-understanding. We asked Klima for help to bootstrap liquidity for and NCT pool, as KlimaDAO did with Moss, but unfortunately the treasury hasn't been able to do that this time. This left us in a position where we needed to bootstrap the pool ourself, with liquidity providers who believe in our long term vision at Toucan. However this left us in a position where we didn't have full control of what NCT would be paired with.

        We did push hard to be able to bootstrap an NCT / Klima pool, and that is still something that we are committed push for because we want to help Klima fullfill its vision.

        Lastly we have been in direct communication with Klima policy and core through all conversations regarding which pools we can bootstrap and re-requested assistance in bootstrapping a pool multiple times. So to be clear it's not that we didn't want Klima's help nor did we 'chose' to do so without speaking to policy.

        We have done the best with the resources we have in order to bootstrap the first high quality tokenised carbon pool with deep liquidity without any help from anybody.

        Lastly thank you for sharing your view on this, and what you would need to see in order to vote on this. I understand your point of view, and appreciate you sharing it. We are committed to getting the rescued value back to those who deserve it.

          ela I'm going to vote no and look forward to revisiting this proposal after the final decision on 11/3. Until then, it seems like it would be premature to move forward on this one. We are value aligned so I think this can be figured out. Moving forward with the submitted proposal at this time without first fixing/addressing some of the underlying issues/disagreements would needlessly divide the community. A 'No' vote now and having Toucan resubmit after the resolution of the allocation of funds seems like the most sensible path.

            blankslate I agree. Evaluating this proposal is really not possible until final decisions are made on March 11th. I think any formal KIP should wait until after that point so all stakeholders can make a fully informed vote.

            I agree with the reasoning in the reply by @IBuyShitCoins .

            I will be voting No, and I will happily vote Yes in the future after resolution of loose ends with the current NCT supply.

            1. I do not agree that KlimaDAO should be buying back value extracted from it.
            2. The decision to extract the tco2s necessary to mint the first NCTs was highly centralized, and it doesn't sit well with me that the decision to rightfuly reimburse KlimaDAO this value is arbitrarily and conveniently made to be the first decision pushed off to the Toucan community.