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  • Request for Comment - KLIMA X MOSS collaboration

ladaime

I don't want to infer anything, but you said earlier: "As it is structured currently, Klima risks not being able to secure credits... ", which to me sounded a bit like, if you don't get our credits from us, you will not be able to secure them as they are scarce and we are the largest holder. Sorry if I misunderstood 🙂

I do agree with a lot of what you say by the way, don't get me wrong. I think digitalizing the slow, outdated and expensive validation and registration process will be a great step forward to bring things like Klima closer to the original source. Hopefully one day it can become to PDevs what the agro futures market is to farmers.

I would disagree with the notion that working on a fixed margin is somehow romantic or bad, it just shows that you can have a clearly incentivized entity with known economics and value added which does not unnecessary make a service or product more expensive. Carbon margins should go down significantly in future when competition increases.

Your last sentence seems to be the crux here: The arbs and people wanting to combat climate change have vastly different incentives and the risk is fully taken by the latter so let's not be romantic here 🙂

Merry Christmas by the way to you, your team and everyone else here.

Euclid creating a liquid market on Polygon could drive most of the trading volume there. And if we force people to buy via Klima/MC02 pair we force buyers through 3 of our pools effectively (usdc -> bct -> klima -> MC02). The only negative to this is I don't think we can make our klima/MC02 pool the dominant volume for MC02 if buys have to undergo 3x slippage to buy...... I think I'd rather build a MC02/USDC pool and strive to make it the dominant trading pool. Lightly incentivize naked MC02 and mco2/usdc liq though to ensure our primary focus is still on BCT.

Overall In Favor of Klima/MCO2 and naked MCO2 bonds, as long as majority of bonding emissions remain focused on BCT.

I look a look at their Coinbase listing. They seem to have a lot going for them. I'm not certain how to verify what they have on there, but having raised seed funding and going for Series A is good along with their other successes. I'd love to see this happen!

ladaime I am certainly a layman so the thoughts that I consider are basic; Klima is a black hole for carbon, Moss looks like a trading platform for carbon - I do not understand why Moss would want to put their tokens into a black hole that cannot be traded. Forgive me if I have missed the point

    Definitely in favor for bond and liquidity option. Love the diversification of treasury.

    The process for bridging BCT and minting Klima is not that different from MCO2. Or do we really believe that carbon projects know how to use blockchain?

    I am referring to the fact that anyone can buy credits off chain and tokenize them by bringing them over the Toucan bridge, and minting Klima.

    With the Moss model:

    • only moss can tokenize the credits
    • they are credits that moss has selected and tokenized and they then sell to people, or moss themselves turn them into MCO2s

    I'd bet every single BCT outstanding was generated by companies or people that have extensive blockchain experience (including @Moss ) and made money just as Moss did. Buying low and selling high. This arbitrage is largely over now, so the driver for future generation of assets for Klimadao must come from verticalized or integrated players, like Moss - That are working on the digital generation of NBS assets.

    Opinion stated as fact. Arbitrage is increases as the price premium premium on chain increases. Unless you now think that the price of Klima isn't going to rise again. As the price of Klima rises, so does BCT and the arbitrage continues. The price at time of writing is $7.20 so please don't make sweeping statements that are untrue and pursue your own agenda.

    And the tokens don't compete, they complement each other, they are different animals: BCT is any Verra credit from 2009 onwards, MCO2 is a curated pool of REDD projects in the Amazon forest, a lot more scarce by definition.

    The moss token competes directly with the NBCT token which will be minted using the same decentralised methodology of bridging, where anyone can buy it offchain, bridge it and tokenize it.

    We need a unified on-chain carbon market with deep liquidity, not many competing commodities which fragment liquidity.

      Yes - good quality credits in a strategic market for carbon. Good partner to grow with.

      Spike

      If someone finds a niche where they can make a profit by doing that, isn't that a good thing? Does it really matter if they're profiting by being a middleman if the carbon price goes up, and decarbonisation projects happen which wouldn't have happened otherwise?

      Price will need to up even more in order to enables previously unviable projects, if people are sitting in the middle taking a slice of the pie as they always have. This is not necessary in the case of KLIMA DAO. There is no need, or justification presented that explains why Moss sitting between the projects and the Klima treasury is necessary.

      This is not an efficient market, and more efficient markets consume more, that means direct connection between project and treasury. If the project can't bridge and bond themselves fine... then tom, dick or harry can do it, there's no need to have a company in the middle, what's the point?

      This sets a precedent whereby Klimdao will then start taking more retailer tokens into the treasury and this is a completely different path than what we have walked thus far IMO.

      Spike My understanding is that the journey from "I have a great idea for a decarbonisation project" to "Here are your BCT tokens for this year" is a multi-year process requiring a lot of specialist knowledge and interactions with several different organisations. If Moss have a way to streamline that process for qualifying projects, doesn't that mean they're enabling projects to go ahead which otherwise might have stalled or not started in the first place?

      As far as I understand Moss buys already existing carbon credits and tokenizes them, and sells them. They don't develop projects. Please correct me if I'm wrong about that.

      Spike I thought the plan was always to have multiple "pools" of tokenised carbon offsets - e.g. nature-based, direct air capture, etc. Are you saying that Klima should only ever be backed by BCT? Also, doesn't bonding the base carbon tokens for Klima have the effect of converting less liquid, heterogeneous carbon tokens into a more liquid, homogenous asset (i.e. Klima)? Or, have I misunderstood the point you were trying to make?

      There are more pools coming on Toucan protocol, including the NBCT pool, and we will now have 2 NBCT pools instead of one with shallower liquidity. The MCO2 won't be compatible with the Toucan protocol, and any inter pool compatibility protocols that are developed under this approach. A better solution would be to put MCO2 token into the Toucan NBCT pool and put it into Klima that way IMO.

        RainbowWarrior The moss token competes directly with the NBCT token which will be minted using the same decentralised methodology of bridging, where anyone can buy it offchain, bridge it and tokenize it.

        From what I've seen, there's no public information regarding nBCT (nature-based BCT). Toucan hasn't released any details officially announcing a pool, and hasn't disclosed things like methodology accepted, year, and other requirements. We also don't know when this token will be released.

        I'm still learning about the carbon markets, but from what I understand, nBCT are for general nature-based carbon credits, and MOSS focuses on REDD credits specifically in Brazil, which in theory would have a higher premium. The size of the LP pools we create are largely based on demand, so if MOSS doesn't facilitate huge volume, we simply retain that pool and shift emissions to where we think is best.

        I would like to see from the MOSS team:
        1) Progressive decentralization: A timeline on when users could tokenize their carbon credits.
        2) More concrete proof of the carbon credits, visible to the community. Toucan has developed a system where anyone can verify the carbon credits are (though a little arduous as its very early on in the ecosystem). I've seen that there is a verification system, but if we can see the Verra credits themselves, I'd be much more comfortable in it.
        3) Further incentives for the KLIMA protocol to take in MOSS and/or KLIMA/MOSS LP. From the discord discussions as well as here, it seems that the community believes the MOSS is gaining the better side of the deal here. From moss's side, they are providing:

        • A commitment to bond 15k MOSS for KLIMA (Can we also get a commitment on how long this will be staked?)
        • 500k MOSS to pair with 500k KLIMA, shared between KLIMA and MOSS
        • 30k for marketing.

        I would propose that the LP that MOSS holds should also be bonded as well, so that the entire LP is in the treasury. Facilitating liquidity is the most important of out of the 3 commitments, and I'd rather that be the focus rather then the other 2.

          It's wonderful to see the awesome discussion and contribution by everyone. My question: Is the MOC2 token only forestry(redd+, ........) based token or do you guys intend to include other project types in the long run?
          I was scrolling through and seems like MOSS has acquired a very small amount of supply from the energy industry project as well.

          It was a test transaction at the beggining of the MCO2 token, we will keep focus on nature based solutions on amazon rain forest.

          Given there are people for and against, wouldn't the best way to make this work is by having the KLIMADAO review all the data of all MOSS tokenization transactions (since that seems to be the most contentious element ), every 6 to 12 months ? If they are taking advantage of the relationship, say by mis-representing the quality of the offsets they tokenize or by not being transparent enough or who knows what else, then the DAO can remove them. And as part of this, I would make them provide 100pct of the liquidity for at least the first year. This way it's their capital most at risk.

          As a VC backed company, if the money people behind it are really in support of the mission, and can create value, they will find the capital to support the liquidity needed, OR, they will limit the number of MOSS tokens that can be created , which in turn will reduce the amount of capital they need to provide for MOSS liquidity

          based on my understanding, and I of course could be wrong, this approach reduces the risk to the KLIMA treasury and to KLIMATEs

            mcuban Naked MCO2 bonds at first would be the lowest risk for Klima. While that's up and running MOSS and other partners could start to build up liquidity on Polygon, and if sufficient liquidity is achieved, we could then think about having MCO2-KLIMA or MCO2-USDC bonds. This is also a way to judge MOSS and their partners' skin in the game for pushing liquidity toward Polygon and making it the climate finance blockchain.

            The idea of 'auditing' bridges in this emerging DeFi x Carbon ecosystem every few months makes sense and will help build confidence in the overall market. We'll have to explore how to best execute that either from the DAO side or in collaboration with another organization (it could very well be an extension of ICROA in the future, if DeFi begins consuming more and more of the legacy carbon market).

              I posted this collaboration as a suggestion in Discord last month. I read their whitepaper and we had a brief discussion on Discord but I wasn't able to follow through after that. I am glad to see MCO2 finally made to the Forum. I believe it will add value both in terms of optionality in treasury and in marketing. It will strengthen KlimaDAO's OG status in this particular niche. Yes, from me.