Summary

This proposal aims to expand KlimaDAO's footprint in the Voluntary Carbon Market by increasing the supply of $CHAR tokens through strategic partnerships and market operations. We propose to be a liquidity partner with Toucan to introduce $CHAR to the Base ecosystem, facilitating liquidity and enhancing market accessibility. Additionally, KlimaDAO seeks to enter into a forward purchase agreement with Exomad Green, the project developer of Concepcion 1, already whitelisted for deposit to $CHAR, to secure additional supply.

Motivation

The Voluntary Carbon Market is experiencing unprecedented demand, with significant implications for carbon pricing and availability. KlimaDAO must seize this opportunity to strengthen its position and influence within this rapidly evolving space. By partnering with Toucan, KlimaDAO will leverage Toucan's robust curation abilities and market presence to enhance the liquidity and availability of biochar via $CHAR liquidity. This will not only augment KlimaDAO's market operations but also accelerate the tokenization of environmental commodities.

Furthermore, entering a forward purchase agreement with Exomad aligns with KlimaDAO's strategic goal to secure long-term, cost-effective carbon credits. Exomad’s Concepcion-1 project is a proven and reliable source of high-quality biochar supply. By securing a supply of 2500 CORCs at a competitive rate, KlimaDAO will improve its market positioning, guarantee supply chain integrity, and support sustainable project development in critical regions.

Proposal

Liquidity Partner with Toucan:

  • Expand $CHAR to Base. Enhance liquidity and market exposure.
  • KlimaDAO will work with Toucan to secure and create a liquid market on Base for at least 250 $CHAR, ideally 500 $CHAR, to be paired with $KLIMA.
  • $CHAR will be sourced at a market rate of $160 per $CHAR
  • Minimum cost: $40,000 ; Maximum cost: $80,000

Forward Purchase Agreement with Exomad:

  • Secure a predictable and cost-effective supply of CORCs from the Concepcion-1 project.
  • Enter into a forward purchase agreement to buy 2500 CORCs at $140 per tonne.
  • This agreement will not only provide price certainty and supply security but also demonstrates KlimaDAO’s commitment to supporting impactful carbon removal projects, while expanding the network of projects in the $KLIMA ecosystem.
  • Cost: $350,000
  • Delivery: September 30th, 2024

Conclusion
The expansion of $CHAR and the strategic acquisition of CORCs through these actions will position KlimaDAO as a proactive player in the carbon market. It will enhance our capability to meet growing demand, make markets, and support global decarbonization efforts effectively.

This RFC will be live until assessed by the Klimate Review Committee (KRC) to be escalated to a KIP.

Can you explain more why you think that voluntary carbon market is experiencing unprecedented demand? I think the credit prices are on a low level, so weak demand.

    Alanos86 More specifically: market segments like biochar are experiencing unprecedented demand in response to the quality concerns in other methodologies. Durable removals are relatively unimpeachable, and we've seen volumes create a supply crunch in the biochar market - many suppliers on the Puro registry are sold out of supply for the coming year, and those with inventory have marked it up significantly(50-100%).

    So there is certainly weak demand for grid connected renewables, hydro, waste heat removal, some more ambiguous forestry methodologies - but that demand has shifted to quality and $120-$300 Biochar is getting the bids that can't afford $600-$1400 DAC ocean alkalinity enhancement credits.

    Buyers are fatigued by avoidance credits and quality concerns, the fact Biochar is considered a durable removal, sequestering carbon for up to 100 years in many methodologies - gives it a strong narrative that's already created significant demand over the last 18 months that we expect to continue.

    Cujo locked the discussion.
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