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  • Request for Comment: Toucan NCT Bonds

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 😉

        I voted yes because I'm greedy and I want all of the carbon credits and liquidity pairs. I also have a feeling or a hope that MOSS would sell us their LP tokens in the future. (Anyone know more about that possibility, by chance?) Also, I don't feel like $5mm is that much money. It would be nice if Toucan reached out a $5mm olive branch, but that bitflip isn't gonna make me not want NCTs in the treasury.

        Disclaimer: I feel like I only have a surface-level understanding of this whole situation. If anyone smarter than me who disagrees with me would be willing to hop on a call in service of my education, lmk.

        Dionysus Agree with Dionysus here. Waiting for resolution and clarity on the NCT fund allocation...

        James

        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,

        James

        My point was clear, and I would otherwise gently steer you towards reading on information and markets, as well as what is long term equilibrium vs short term equilibrium, but I'm beginning to form an opinion your response was formed in bad faith, not lack of clarity or understanding, because:

        James

        What information exactly the functioning of the pools has been consistent since they were launched, anyone could have redeemed from them at any time.

        Let's make this crystal clear. In the AMA following the uncovering of Toucan's operation, the Toucan team explicitly claimed it could not work with Klima's policy team to "rescue" the nature-based offsets in the BCT pool in question because @Brian33 and the policy team at Klima insisted such a move would require a KIP proposal vote followed by a snapshot vote in the interest of transparency.

        or, from your own blog post:

        We were not able to share that this mass balancing activity was being performed with the Toucan community before it was completed. By publicizing that this value remained available to anyone, the arbitrageurs we were defending against would have been tipped off. Revealing this free value in the dark forest would have resulted in the rescue being front-run

        This is precisely how markets react to information, though either purposefully or inadvertently, Toucan decides to leave out the fact that both sellers and buyers would receive the new information, so value attribution wouldn't solely go toward arbitragers.

        Yet at the same time, Toucan continues to insist that the information on how to selective redeem had been out in the open all along. Here's the thing: You can't have it both ways - if you are worried that release information would create a rush to hoard NCT offsets in the BCT pool, then you are admitting access to that information was gated, whether by technical, physical, or other barriers. If you insist on the information was open and otherwise un-hurdled the entire time, then allowing the policy team to publish a KIP would have no material effect. As for the release of information of Toucan's interest in a nature-based pool, this was something your team had done long before the behind-the-curtains operation.

        You can't have it both ways. You can't claim a "dark forest" where information would spur immediate reaction, and that the information was out there all along.

        James

        I'm just wondering if there's a bit of self-awareness with anyone on the team at this point?

        Starting with the "rescue operation", with the exception of a few notable members of your team, every response in discord and forums I've heard coming out has been prefaced with "me me me", "I had no money so I had no choice", "this is what we think is best for ReFi", "this is our vision and you should be going along with it/are damaging the earth for not going along with it." Even the more polished mea culpa response from the blog post prefaces with qualifiers such as "the perception" that we did something wrong, etc. It is astonishingly tone-deaf and an own goal that no one forced you into. No one is trying to force you into a public caning, but you need to demonstrate at least a basic understanding of why certain stakeholders are unhappy with you to instill any confidence that you can redress lapses in the decision-making process that led to this outcome going forward. In your responses here, you have not.

        ela

        I would prefer to engage on open forums rather than closed because I've been engaged in way more bad faith engagements during my career, where the value to one party is the signal to the outside world rather than genuine dialogue, than I care to recall. That said, my goal here is not to embarrass or delegitimize anyone or any party, and I do believe in the value of engagement over opposition. I'd be happy to ping you via discord.

        James The main issue I see people having is a language barrier and the meeting of challenges to exchange snide remarks. Actually, not so much a language barrier I guess as it is just a poor concept of the assumption that the situation is clear to everyone. Misunderstandings of intention and assumption driven bias without clarity is big factor here. People tend to see things through blood red tinted glasses when in retrospect while having a certain narrative set. It also seems like a battlefield where one group is trying to have the higher ground because they perceive the past as a point where they were taken advantage of and now see the proposition as an offer to step on them again. In order to get past this it's going to take a bit of people on both sides walking in the shoes of their opposite. Some understanding and empathy. Not a spin on a deal of who is more important and who is trying to kick the other when they're down. Some times the hardest thing to do is to level with people and understand their point of view, but almost every time it is the single action that can begin mending even mortal wounds, none the less the superficial wounds. Compromise is difficult, but not as difficult as understanding what people aren't understanding and then showing them kindness while taking a new approach at leveling with them. It's only that difficult because some times the other party won't take the time to do it themselves, but regardless, don't let the words and actions of others define who you are going to be and how you are going to act. I say this because it is obvious that you are frustrated and I want you to know that it is alright to feel grief in the situation, but don't stoop just because someone is taking kicks at your ankles pal. <3

        While I prefer to limit my comments on the substance of the RfC under consideration, I'm very disappointed and disturbed to read the outburst of disrespect shown to KlimaDAO and key contributors in Toucan's Discord today, including from the author of this RfC

        john_forum
        " 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"

        My main point is double valued NCT was created out of the BCT via the TCO2 pool. So now we're being asked to bond back a 2x priced asset that features the exact same underlying TCO2s that were already represented in our treasury via our BCT share. Sure we get to 'sell more bonds', but from my point of view that extra value should already be in our treasury without needing to pay out the market with extra Klima. The most upsetting part to me: Klima originally deposited many of those nature based TCO2s into the pool before they were redeemed with BCT and turned into 2x value NCT. Until I see the final decision on this arb I simply refuse to move forward.

        "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. "

        I'm not sure where you think I've said this but I definitely am not claiming individuals are holding NCT that isn't theirs, what's done is done as far as market action. I also don't understand why the NCT changing form into an LP token makes a difference at all, the value is still there. 2x $s were created out of thin air using a TCO2 pool that Klima contributed to.
        I agree its not all "Klimas carbon", but we did own a significant portion of BCT in the market at the time of this arb, not to mention contributed a lot of nature based TCO2 tonnage to the pool.

        "Not enabling 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."

        I really don't think it's asking much to delay this decision until we see the outcome of the NCT arb. In the meantime we're still bonding BCT and MCO2.

        In the end all I really want is a reasonable discussion around the optimal arb outcome for both sides, execute that, then we can proceed as normal. There's too much bad blood around this topic regardless of who is right or wrong. The community needs to see us work together as partners and resolve the conflict before moving on. I will say I appreciate Toucan's effort in creating governance and the write up here - https://blog.toucan.earth/a-response-to-our-community-ahead-of-nct-launch/ . My only request is lets take promised action first before planning more action.

          IBuyShitCoins Thank you for the thoughtful answer.
          Regarding this proposal, I only concentrated to the question of whether or not to enable bonding right now, assessing the potential outcomes of the rescued funds and their related probability. After all, maybe I am wrong to think that ASAP climate action is more important than wait and see one month to an outcome which would probably be an outcome that the majority of the community would see as "ok, we got reassured about the rebalancing settlement and can enable bonding now".
          I mean, in my assessment, it's a low risk business to enable bonding now, but a high risk one to delay it if we consider what we pay (one month delay) for the comfort of waiting for a final decision that would most probably be a reassuring one anyway.

          Or can you foresee an outcome that is both probable and unacceptable at the same time in which case it would be a big no-no to enable bonding?

            john_forum

            I just know from a community standpoint most in Klima are confused about the situation and are upset by it. It doesn't really matter what side is right or wrong. I think providing closure and clarity will help us all move on and become stronger partners. In the mean time we're still taking in the same amount of bonding tons as we would with including NCT. We wouldn't increase our bonding capacity if we add NCT bonds, it'll just steal some capacity from other bond types. So I don't see it as delaying Klima's core goal waiting for this issue to be closed out.

            Unfortunately, No for now from me...I love Toucan, but first something need to be solved, then i will happily say Yes!

            • ela replied to this.
            • ela likes this.

              john_forum

              Let's unpack your post a little bit:

              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

              What's dangerous is you thinking leveraging insider information to extract value from one party then having the perpetrating party going back to the target of the extraction with a position of "you need to give this project of mine money for the greater good before it's too late!" is in any way legitimate. You fling around words like property, fungibility, and carbon carelessly, I don't. If anything, Toucan's operation destroys the whole trustless and transparent narrative rationale for bringing carbon credits on-chain, and it has shown in conversations in circles far and wide beyond blockchain and blockchain-curious, but perhaps you weren't listening when carbon pulse broadcasted it, or just dismissed it as sensational (which the trade publication is anything but).

              On the other hand what should we say to those who may want to bridge new NCT and bond them ASAP to the treasury?

              The right answer: We say "Hey, Toucan, let's come to a decision on the final results of an operation you started and concluded so many weeks back so we can move forward. " The wrong answer: We say "Hey Klima, you need to support this proposal I put up 4 days ago with your treasury or it will be too late for the climate!!!!" That is the pure, unadulterated gaslighting that has me increasingly incensed about Toucan's attitude.

              Not enableing[sic] 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.

              This would only be true if 1) NCT was the only bridge for off-chain assets to on-bridge and 2) Assets the NCT pool is bridging remotely impact global carbon price in the long run.

              1) Was very briefly true for Toucan when old defunct "carbon credits on blockchain" projects had gone dead due to lack of demand and new projects have not arisen due to lack of demand signals, but no longer is true, and Toucan knows it because certain representatives have gone around trying to bully people with a false narrative of "we are in it together (with me as captain of course), and it would be a shame if you went against the refi family" on Twitter and forums.

              2) Is never true, by design, in order to "facilitate liquidity". You can take the NCT pool design to any carbon expert and ask them if it'll raise global off-chain carbon prices. If anything, it propagates the off-chain status quo of incentivizing a glut of forestry avoidance credits with extremely questionable baselines, highly dubious permanence, and unavoidable leakage being marketed as "hey look, trees, we're green!" to the satisfaction of loggers who enjoy a bit of extra income and fossil fuel dependent legacy corporations who love a bit of extra green-washing. What is true is that this is one in a series of pool design experiments, something that won't get us where we want to be, but ultimately may be a useful step in learning-by-doing, with the caveat that useful information can be gleaned from the implementation and operation of the commodity pool, unobstructed by noise such as "was this demand for the pool actual demand or just a bunch of people who don't know the difference between avoidance and removal and bullied into it by the 'good for refi' narrative?" The rush to force the product into a very resentful buyer's hands is not key, proper alignment of interests is the key.

              f 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.

              This is what the fossil fuels lobby industry refers to and relies on as the "deflection" strategy. "Hey nevermind that I haven't made a decision in 3 weeks because I need to be deliberate and careful in my processes etc etc but you, you need to do this right now, or else you're bad for the climate." So let me respond in the hyperbole you seem to love to peddle, but in a more accurate fashion: supporting NCT bonds with this kind of "logic" and attitude toward on-chain demand, Klima would help Toucan irreparably destroy on-chain carbon as a concept for this phase of blockchain development, just as ClimateCoin did before Toucan. If you just swallow the load of false narratives, deflection, and general redirection embodied by the post I'm replying to, you would be helping to set back on-chain carbon for a crypto-generation.

              4 days later

              Klima couldn't extract any of this value because they're a DAO. I understand core Klimates knew about the extractable value for 6 weeks, but didn't do anything on behalf of the DAO during that time to capture the value I assume because they couldn't.

              This proposal to bond NCT makes it so the arbed value goes to depositors of nature based carbon credits, of which Klima is a participant! It seems like Toucan is looking to participate and cooperate in the KlimaDAO. There's no reason not work together the space is so small. I vote to allow bonding of NCT so Klima isn't backed only by MCO2 and BCTs but can diversify beyond these two initial assets.

              • ela likes this.

              Hey everyone,

              First of all, I want to thank you all for engaging in a thoughtful discussion around this RFC. We requested comments, and sure got some!

              It is quite clear from the feedback that the resolution to the BCT-NCT mass-balance fund allocation is a blocker to many in the community for their endorsements of NCT bonds. This process is now in the hands of the multisig (Klima, Regen, Moss, BICOWG, Toucan), and the draft timeline is as follows:

              • 2 March: Final date to submit RFCs to the form for consideration
              • 2 - 11 March: Deliberation by the multisig, drafting a final decision
              • 11 March: Final decision announced on the allocation of the funds

              I encourage everyone to participate and engage in this process (https://governance.toucan.earth/) and I look forward to the RFC on fund allocation that is in development by Klima DAO.

              Moving forward, if the Klima team would like to prepare a KIP relating to NCT, we are open to support it with feedback or materials.

              _NN_ _NN_
              Toucan is working on releasing a blog post with a status update regarding the mass-rebalancing, outlining the next steps in the governance process.

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