Request for Comment: Toucan NCT Bonds
ollumi Neither you nor I nor the Toucan team determines what is "priced" into BCT and what is not, the market does, based on the information available to it, otherwise, you can stop listing BCT on any swaps and exchanges and just list it as a direct to consumer/B2B product only sold by you.
Every time the price of BCT goes over the price of the lowest quality credit permitted in the BCT pool (usually 2008 renewable projects), large quantities of these credits are bridged on chain an sold until the price of BCT returns to the the off-chain price of the lowest cost of production. This is how commodities work, and our pools function similarly.
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ollumi It's one thing to say the team with inside/proprietary information on redemption and access believes the market price does not accurately reflect the true value of the assets underneath, it's another thing altogether to simultaneously pretend this asymmetric information effect on price exist and pretend that BCT does not lose value from selective redemption by taking advantage of the asymmetric information. Toucan's "rescue operation" justification hinges on the very fact that the market would react to the release of this information to a greater public, yet continues to pretend it would have no impact on the price of BCT or recoverable value to BCT holders.
The value doesn't effect BCT it effects NCT because profit seeking actors would just dump these credits that they have taken in a zero-sum way.
Don't believe me ... look what happened to the credits that weren't rescued:
https://polygonscan.com/tx/0x01fca7b28e1ca071e1074e57c63e556af6af220df07c9efb7952a9a018d638ed
https://polygonscan.com/tx/0x3a6e6bc275a02e7327ce7be5b79e59c94a2c76e4b4f641d8954b339c13bca321
https://polygonscan.com/tx/0x12c672fa006fc1e628f5e4a5fb02dad21a825876ffe1f6158efa93213e97d19f
https://polygonscan.com/tx/0x15acf7c89a62f969037003b1c866c33144385114f68726adee2f50411526b2f5
https://polygonscan.com/tx/0xb0095710f47a82c6e94c99684899e1c18fd8cf3852a4c9fcb9a53dde0548328d
https://polygonscan.com/tx/0x119ff0caa53cee1b196eac8ce2a039c8f779bdfae5393b3bb00e0f92c770e0a3
ollumi This is a point I must stress because it's increasingly clear that some members of the Toucan team and its advisors simply do not respect market mechanisms or believe the purpose of these mechanisms is to be manipulated. This lack of respect for the demand side is more damaging than any positive "motivation" you may believe you hold.
If you have read and understood all the explanations that we have taken pains to put out on this and still feel this way, then I respect your right to an opinion.
It sounds like you're saying you would have let individuals actors extract the value and profit, and we all lose?
That was literally the only alternative or please tell me what you would have done?
(btw: first redeems by unknown actors on BCT starting 31st October 2021)
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ollumi To answer your question about the board, the funds are now in a 4/5 Multisig that consists of:
Klima DAO, BICOWG 1, Toucan Protocol, Moss, Regen NetworkIf that is the ultimate governing bottom line, what you're directly saying is that Klima would have at most a 20% say, and actually less because other signees were coordinated participants in the "rescue operation", is that correct?
It's literally the people who put the nature based credits in the BCT pool in the first place.
None of the signers participate in the rescue operation besides Toucan Protocol
ollumi This is your vision, not the market's decision. If you see robust initial enthusiasm for your framework, then experience a sudden decline in the enthusiasm, I would first look toward yourself and the products you make before blaming other market participants.
Please point me to where we blame other market participant for anything?
Also not sure what you mean about sudden decline in enthusiasm?
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Which...proves my point exactly, so I'm happy that you agree with me?
To borrow your tone in your replies: if you understand the effect of information, these transactions were done before the information was available to a greater public, while we're discussing why you would willingly 'chose' to continue to withhold that information rather than having it be out to the greater public. So to summarize, you're using transactions with insider information priced out of it to prove what prices would be with information priced into it.
If you have read and understood the conversations I've taken pains and my own valuable time to engage in good faith with your team on your server and on these forums and still do not understand why I feel that way, I think this proves my last point in my previous post. As for "only alternative" - as said already, you could've released the information to the greater BCT holding community - this is called transparency. If you were concerned about arbitrage, you could've either swallowed the pill that this is what market prices and your own product design dictated and shored up the difference via a capital partner, or been slightly less of a command & control operator compared to the route you chose and retroactively imposed selective redemption fees on nature-based credits in the BCT pool that would account for any projected price gap and announce the reason why, or selectively reached out to those who have been redeeming from your protocol with a bounty that represents a sure haul compared to the uncertainty of whether you would launch an NCT pool at all or whether the NCT pool liquidity could absorb their theoretical arbitrage maximum, or any number of other, non-self serving steps. But most importantly, I don't have to offer any of these alternatives to criticize what you did do: to paraphrase a certain comedian - I don't have to be a pilot to see a helicopter stuck up a tree and think that fellow screwed up.
That is my misunderstanding then, thanks for clearing that up!
I mean since you asked so nicely, here's an example, on KlimaDAO's forum in a RFC from a 3rd party no less, but I guess that's also consistent with how your server is mobilizing people from the Toucan server to vote on this KlimaDAO forum RFC - you don't see governance issues with voting on your own request to a separate, independent party?
I won't bother listing others where members of your team try to label other startups in the space as fragmenting your "one standard" and doing harm, people do see for themselves.
As to the sudden decline in enthusiasm, if you're not sure what I'm referring to, you wouldn't be here on these forums replying to me.
Hello Ollumi, I'm really sorry that you feel this way, and I apologize for you experiencing a lack of responsiveness in our Discord.
We hear and understand you, and we are working on making things right, so we can move forward together. We are all humans here aiming to solve the biggest challenge of our species, which should provide enough common ground to work out our differences in a way that satisfies all parties.
We would like to invite you on a call with members of the Toucan core, so we can have a fruitful conversation around the points you brought up. Please message me (ela @ Toucan | GMT+2) on Discord (DMs are open, otherwise please ping me on the Toucan Discord), so I can coordinate a time that works for you and the Toucan core.
Thank you!
After reading through the comments it seems to me that the biggest concern about this proposal is that KlimaDAO’s treasury would have to buy back what it had already paid for.
I think it’s worth to take a closer look:
Would KlimaDAO really have to start buying back the same assets (NCT and LP tokens) that were “taken out” of its treasury if NCT bonds would be introduced?
My understanding is quite the contrary. Klima will be able to sell bonds in return for NCT and LP tokens only to users who either sourced these NCTs via bridging or they bought them on SushiSwap after the NCT liquidity pool was launched and none of these assets were previously in Klima’s treasury (except the NCT that was redeemed by non-Toucan entities, over which nobody has power anyway neither now or in the future). The NCTs that were “taken out” from the Klima treasury changed their shape into the form of LP tokens – so to avoid misreference it only makes sense to refer to them as such hereafter - and Toucan have absolutely zero intention to bond any NCT-USDC LP tokens from the mass-rebalancing action.
Also, it’s both very dangerous and quite ridiculous would be to think that if a user who bought his NCT from the - currently still Toucan owned - NCT-USDC pool, isn’t acknowledged as his legitimate property, and thinking it belongs to Klima. It would make the meme turn reality in which Bugs Bunny says: “Our carbon.” Image of the meme: https://media.discordapp.net/attachments/846431959042621480/912120960906317864/Klima_Meme_1.png
This would also break the fungibility of NCT. I think there is no need to explain further why this narrative would crush the on-chain carbon market.
On the other hand what should we say to those who may want to bridge new NCT and bond them ASAP to the treasury?
Not enableing NCT bonds would both delay the inflow of carbon assets from the traditional market to the on-chain which would delay global carbon price increase, and it would prevent users to play the beneficial 1,1 strategy, delaying the increase of Klima’s runway. Btw, I think if Klima is offering to sell a bond, it is only doing so under such conditions that is beneficial to them, so Klima would lose potential revenue.
If we are delaying the launch of NCT bonds, we are essentially throwing the baby out with the bath water.
I ask everyone to reconsider this proposal and don’t see and point to Toucan as the single identifiable blameable actor. One can only do that because Toucan had to do the rebalancing operation themselves. By supporting NCT bonds, you are not doing Toucan a favor. You are doing it for the benefit of Klima, the emeriging On-Chain Carbon Market and mainly for the health of the Planet with all the living beings in it.
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Hi! IBuyShitCoins I also wanted to reply to your comment with my writing: https://forum.klimadao.finance/d/27-request-for-comment-toucan-nct-bonds/58
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Hi! ShimonD I also wanted to reply to your comment with my writing: https://forum.klimadao.finance/d/27-request-for-comment-toucan-nct-bonds/58
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ollumi To borrow your tone in your replies: if you understand the effect of information, these transactions were done before the information was available to a greater public, while we're discussing why you would willingly 'chose' to continue to withhold that information rather than having it be out to the greater public. So to summarize, you're using transactions with insider information priced out of it to prove what prices would be with information priced into it.
I hope I'm not the only person who doesn't understand what you have said here, maybe you can make your point more clearly please.
If by tone you're referring to facts rather than opinions, then yes please... let's do that.
ollumi If you have read and understood the conversations I've taken pains and my own valuable time to engage in good faith with your team on your server and on these forums and still do not understand why I feel that way, I think this proves my last point in my previous post.
Sorry what point exactly?
ollumi As for "only alternative" - as said already, you could've released the information to the greater BCT holding community - this is called transparency.
What information exactly the functioning of the pools has been consistent since they were launched, anyone could have redeemed from them at any time.
ollumi or been slightly less of a command & control operator compared to the route you chose and retroactively imposed selective redemption fees on nature-based credits in the BCT pool that would account for any projected price gap and announce the reason why,
This was a work in progress, but we didn't have time to implement this. We also are of the opinion that any changes to the BCT smart contract would have to be run by KlimaDAO first.
ollumi or selectively reached out to those who have been redeeming from your protocol with a bounty that represents a sure haul compared to the uncertainty of whether you would launch an NCT pool at all or whether the NCT pool liquidity could absorb their theoretical arbitrage maximum, or any number of other, non-self serving steps.
Unfortunately there's not email address attached to wallet addresses that we can reach out to... and we don't know who was redeeming. We couldn't do a public shout out for all the reasons previously mentioned.
ollumi But most importantly, I don't have to offer any of these alternatives to criticize what you did do: to paraphrase a certain comedian - I don't have to be a pilot to see a helicopter stuck up a tree and think that fellow screwed up.
Yes this is true. It is easy to make baseless accusations and attack my and Toucan's reputation from behind your anon profile. If you feel like removing your mask and prove that you don't have a secret interest in dragging our name through the dirt, and that we don't actually know each other, then please come to our office hours next week.
You have a personal invitation from me, even if you aren't a pilot,.
I will vote no. Klima is too dependent on Toucan already and there are some serious issues raised by the community about Toucan's behavior. Before addressing these issues it's a no.
ollumi I won't bother listing others where members of your team try to label other startups in the space as fragmenting your "one standard" and doing harm, people do see for themselves.
At toucan we do think that a single carbon standard is important.
First there was Verra VCUs. Now we're going to have have how many derivative tokens based on Verra VCUs, this further fractures and fragments an already fragmented market. This is totally unnecessary, and we have always been open to collaborating on a common standard to prevent this from happening.
Many bridges to a commons standard is vital if we're to make any improvement on what exists.
Thanks you for dragging this conversation through every amazingly shit thing you can think of to say about Toucan, and away from the actual topic of this thread... you're a true pro