• General
  • Request for Comment - KLIMA X MOSS collaboration

I have some questions and some concerns about this proposal, which are detailed below:

  • TIMING of this proposal - Why is this proposal being pushed 2 days before the Christmas holidays when both the Klima community is mostly offline for the holidays? This proposal deserves robust and authentic community discussions, especially including its carbon market expert representations. As such, it does not sit right that this proposal was posted at this time. Adding the first new asset to the Klima treasury is a big decision that deserves authentic community engagement.

  • COMMUNITY VALUES & DECENTRALIZED FINANCE - Should the first new carbon asset included in the klima treasury be moss? Is there a risk to adopting a heavily VC-funded, centralized exchange traded asset as the first expansion of the Klima treasury? Is moss a web3-first organization? Does that matter to the Klima community? Does the Klima community value community-engagement first, or just arbitrage and making money? Do our collective values demand of the Klima community that we are adopting co-creative and community supported protocols? What are the values of the Klima community beyond making money? What are the moss organizational values and how to they anticipate collaborating within the decentralized finance community moving forward? What decentralized exchanges will they be listing on? Do they have a decentralized exchange strategy? Why did they list on centralized exchanges first and not take a more community-centric asset listing approach? In a highly connected and highly collaborative blockchain-carbon protocol community, moss seems to be taking divergent tactics in comparison to the other highly defi and highly collaborative projects. Does that even matter?

  • CLIMATE EXPERT OPINIONS - What are the role of carbon market expert opinions in decisions around what types of new assets are adding to the Klima treasury? How are we incubating thoughtful, expert informed discussions in the context that the carbon market is extremely nuanced? What is the role of the average defi Klima holder vs. a Klima holder with extensive carbon markets experience in these discussions? Do those of us with extensive experience have an obligation to educate and inform the community when these proposals arrive? Does the Klima community even acknowledge the carbon markets expertise in its own community? Or, is this just a defi, sounds good, hi-five style of approving new assets?

  • RISKS TO THE LEGITIMACY OF THE KLIMA PROTOCOL - What is the risk of not extensively scrutinizing new asset proposals to the legitimacy of the Klima treasury? What are the standards that new assets must meet in order to be included in the Klima treasury? Are moss assets the same quality, or lower or higher, than assets already in the treasury? How do we ensure we protect the validity of the protocol by having robust asset types discussions in public forums? Whose role is it to incubate these discussions? Are there standards that first need to be more clearly established before a proposal for a new asset can even be considered by the community?

  • UNCLEAR VALUE TO KLIMA HOLDERS - The value to moss in this proposal is the marketability of the moss token which increases if they can say it is accepted into the Klima treasury. However, what is the distinct value that Klima holders, especially HODLers, will gain from the acceptance of moss? The points I raise above highlight that there may not be full values alignment between moss and the klima community - what does the community think? What does the community expect from new asset proposals regarding clear community benefits and is there a role that organizations proposing new assets must first play within the klima community itself in order for its proposal to be considered?

  • UNCLEAR ROLES BETWEEN MOSS TOKEN AND BCT AND TCo2 - It is unclear in this proposal if moss is asking for moss token to be directly accepted to the Klima treasury, or if it is expecting to convert moss tokens into BCT to then convert into the treasury? If moss tokens aren't converted to BCTs, does this not put the stability of the BCT and its accompanying pools at risk? Are moss tokens not just the equivalent of a Tco2e NFT (ie. they are just tokenized VCUs)? Does Toucan support this proposal? Are they aware of this proposal? What is the tokenization architecture that moss has used? What chain and what protocol are they using the tokenize these VCUs? Is the technical tokenization design as strong as Toucan's? Does the Klima community need another alternative tokenized credit asset at this juncture? Does this create pool risk or risk to the legitimacy of the BCT asset? Greater clarity would be welcomed around these token and pool mechanics as they directly affect the profitability of community pools and the defi returns of the Klima community. Ensuring tokenization architecture meets a minimum viable criteria for global carbon accounting purposes ought to be further explored.

  • CAN WE LEARN MORE ABOUT MOSS - What are moss values? What is their organizational history? What is the structure of the carbon credit deals that allow them to have access to this volume of carbon credits? Since the community is less familiar with their work, it would be good to know more about them at this juncture to ensure transparency across community decisions-making.

  • CAN WE LEARN MORE ABOUT THESE TOKENIZED CREDITS - MOSS TOKEN? Are these just tokenized VCUs or is there some additional value-add that is not transparent? Has anyone looked deeply into the validity of these projects, their documentation and verification? Does that due diligence not matter if they are using the same Verra methodologies that are already accepted to the Klima treasury? Since they are trading higher than other carbon credits of the same type, does that indicate there is a value add of the moss token, tokenization generally, or that these assets are over-priced in the marketplace? Will the project developers that have developed these projects be fairly compensated within the deal structure of the moss token? Is this a simply arbitrage or are there other economic benefits these land stewards will receive? Do these land stewards have any role in the tokenization? Should they? Will they reap any of the economic upside of the defi rewards in klima? Are they included or have they been left behind? (I would ask these questions of any project development relationship, which I personally feel are critical values to explore regarding the decentralized empowerment of the role of land stewards in climate impact projects and ensuring economic parity in the marketplace include ALL actors).

  • CAN I GET A KLIMA ROADMAP? How will Klima evolve over time? Is there the expectation that Klima will accept multiple types of tokenized carbon assets? How will additional standards be proposed to the community to expand the inclusion criteria? Should we expect Klima to move beyond tokenized carbon? Who makes decisions? How are they made? Can we see the governance standards that the KlimaDAO proposes for how to conduct these proposals and inquiries? Can we put this proposal inside of the broader roadmap context during its consideration period?

Disclaimer: These are my personal opinions, and not the opinion of any entity. I am asking these questions in order to incubate a ROBUST community debate, and to ensure that the community deeply considers the nuances and implications of this proposal. I have not yet formed a personal opinion as to whether I am for or against the proposal, however, I carry the concern that there is not a deeply informed discussion emerging.

    Moss tell me more about this statement - "we are working in a transparent and secure way to decentralize more."?

    Isdatcool I also agree that there needs to be more clarification about the tokenization architecture - can @Moss share something for the community to better understand how this "bridging" is similar or different from toucan or other tokenization architectures?

    0xFelix agree with this analysis - potentially a large risk to destabilizing existing BCT pools, right? has anyone modeled this affect? if so, can they share that analysis in this forum? I am leaning away from supporting this proposal because I don't know if the ecosystem can handle the price shock after affect of a MCO2 bond. It seems safer to require conversion to BCT at this juncture to ensure market stability. This is also a critical architecture question - is every new potential bond proposal going to deflate BCT? The decision for moss's proposal would establish a community precedent - we should see some real math around this before just saying yes.

    Nikodemos agree - i would like to see this tokenization architecture transparently in this forum so the community can more deeply understand it. insufficient details are available on the website to conduct a deep inquiry at this juncture.

    RobXRP THIS is critical - who makes these decisions and how? Feeling uncomfortable with the defi-high five yes's - can we get explanations for why people are saying yes? This is just the 1st proposal of this kind - shouldn't we be first asking how these decisions are made, rather than trying to make a decision based on 1 proposal? (I love a clear and public process for decision-making -> personal thoughts)

    SBax_Regen
    I appreciate your thorough reply to this proposal and have provided my thoughts below - I think you bring up some interesting questions about the role of KlimaDAO, bridge entities, and other actors in the space.

    • TIMING of this proposal:
    -Klima has been in internal discussions with MOSS to learn more about their platform, as have members of Toucan, for months now. I’d remind you that Klima has advisors who are members of BICOWG, and we certainly do not need to run policy decisions by a third party industry body whose job is to be impartial. Moss’s post is for discussion purposes, and that’s precisely what is happening right now.

    • LACK OF COMMUNITY CO-DEVELOPMENT:
    -Again, this is a KlimaDAO decision, not a BICOWG decision. There are carbon market experts within KlimaDAO’s core team and countless others who are active in the community. Everyone is open to share their perspectives on this forum and I do not believe one specific group holds agency over others in the community, and certainly not the DAO itself.

    • COMMUNITY VALUES & DECENTRALIZED FINANCE:
    “Should the first new carbon asset included in the klima treasury be moss? Is there a risk to adopting a heavily VC-funded, centralized exchange traded asset as the first expansion of the Klima treasury?”

    -This is a very curious point, given that KlimaDAO itself has received VC funding, as have many carbon market entities who have utilized Toucan’s bridge. Are you concerned with VC funding in the carbon market space in general? My understanding is that Toucan themselves are pursuing VC funding – does this change your calculus of their ‘web 3 values’?

    -The climate space is seeing a surge of VC capital due to an awakening on the importance of the the work happening here - as well as various macro factors which make companies operating in the space quite attractive investment opportunities (e.g. the general bullishness of the VCM and compliance markets).

    • CLIMATE EXPERT OPINIONS:
    -KlimaDAO is fortunate to have attracted many individuals with deep carbon market experience to our team and community. This ranges from project development & financing, corporate climate strategy development, and voluntary and compliance market trading. I’d expect each of them to weigh in on this discussion and share their perspectives. I don’t see a need to call into question this community’s ability to analyze this opportunity and move forward in a way that is most advantageous to KlimaDAO and our vision.

    • RISKS TO THE LEGITIMACY OF THE KLIMA PROTOCOL:
    -“Are moss assets the same quality, or lower or higher, than assets already in the treasury?”
    I know you know the answer to this question but I don’t want to automatically assume you’re doing this just to cause FUD. Perhaps you can elaborate on your understanding of BCTs composition and that presented by MOSS so that I and/or MOSS can better respond to your concern.

    • UNCLEAR VALUE TO KLIMA HOLDERS:
    -Please see my first post in this thread.

    • UNCLEAR ROLES BETWEEN MOSS TOKEN AND BCT AND TCo2:
    -This is a question for Klima’s policy team to model and handle. These discussions are on-going and will certainly be shared with the community prior to any vote if this becomes an official proposal.

    • CAN WE LEARN MORE ABOUT MOSS:
    -I expect the MOSS team will be happy to answer additional questions about their organization and host an AMA with the KlimaDAO community – we’d expect nothing less!

    • CAN WE LEARN MORE ABOUT THESE TOKENIZED CREDITS - MOSS TOKEN?:
    -I provided Verra registry links to each of their projects in my first reply. The question we need to ask ourselves is to what extent bridge entities are responsible for due diligence. Do you expect Toucan and all future bridges to conduct in-depth due diligence on every project they allow in? Or, are we comfortable allowing the carbon market experts, certification bodies, VVBs, etc, make those decisions? Considering future bridge plans which have only methodological and vintage requirements for their new pools, I’ll make a confident assumption that the quality of MOSS’s smaller, curated pool, would on average be higher. Consider that Pachama offers e.g. the Agrocortex project (meaning that this project also went through their satellite analysis program).

    -Current bridge designs focus on bandwidth rather than curation. To a certain extent we need to trust that the existing quality management practices in the VCM are adequate. We could ask ourselves, for example, how the level of scrutiny differs between a VCS + CCB credit compared to an alternative certification standard, like Plan Vivo.

    • CAN I GET A KLIMA ROADMAP?:
    -Absolutely, and an updated vision document with accompanying roadmap will be released by mid January. Until then, I’d encourage you to review our early Medium posts which provide context for our mission.

      SBax_Regen

      Just wanted to add regarding our view in policy; We should be viewing all carbon assets with a neutral stance. BCT has been a great carbon asset, but because the space is so new, we shouldn't disregard other assets coming into the space. When new carbon bridges and token emerge, we heavily encourage them to make a post as well, as I feel collaboration yields the greatest results.

      SBax_Regen It is unclear in this proposal if moss is asking for moss token to be directly accepted to the Klima treasury, or if it is expecting to convert moss tokens into BCT to then convert into the treasury? If moss tokens aren't converted to BCTs, does this not put the stability of the BCT and its accompanying pools at risk? Are moss tokens not just the equivalent of a Tco2e NFT (ie. they are just tokenized VCUs)?

      Regarding stability; more carbon assets introduces more stability into the carbon ecosystem, as now users have a method of pricing different quality of carbons. Klimates are able to choose between BCT or MCO2, and the treasury has a lower dependence on the toucan bridge, promoting decentralization and diversity. Policy team will take account all of the qualifications of the token and determine how much should be in our treasury.

        As a Klima co-founder and core team member, I am strongly against this.

        The argument for me isn't about the quality of the credits, it's that MCO2 pretty much acts as a Moss token by proxy. Moss is a centralized, VC backed company , they are picking the projects, buying the credits tokenizing them and then selling them. This kind of policy decision enriches them, and other MCO2 token holders, and is again just another middleman, who I thought the whole point of this was to replace?

        With BCT, any carbon project can bridge their own tokens and mint Klima or use the BCT to take out a loan and finance themselves. None of this is possible for MCO2 and centralised approaches like this.

        On top of all of this, we have fragmentation of liquidity, and competing tokens... again... re-inventing the same this that was always there off chain in the first place.... The whole point of bringing credits on chain is to build an abstraction layer and meta-registry on top of these different credit types, but now we have another abstraction next to an existing abstraction, and we just end up with an even more ugly fragmented, illiquid monster markets than before...

          This criticism is far from the reality of what happens in countries covered by forest areas such as Brazil. Here in Brazil, these liquidity instruments, like mco2, offer carbon asset distribution solutions that have never existed before. As a result, more and more forest conservation projects have emerged, and the income from credits at source has increased, making many conservation projects that were not financially viable to come into being. Mco2 is an important solution for credit originators, as we now have distribution channels for our assets and with increased liquidity we have increased the price at source

            Brian33 I am all for further decentralization that decreases the pressure on the toucan team, and for opening up avenues for other tokenized carbon assets to be included in the klima protocol. That seems like a logical progression and maturation that will be necessary for scale.

            However, I don't think that BCT and MCo2 are meant to be parallel assets, right? MCo2 is a REDD credit, ie. a digital forest carbon asset that focuses on a distinct area of the world - which is many ayers more granular than BCT - ie. VCU (ie. BCT) -> nature-based VCUs -> REDD projects -> Brazilian REDD projects (MCo2); It feels extremely granular from an asset pattern level to structure MCo2 as a bond given that it doesn't even represent an asset class or index type, which would be natural first step of BCT alternatives.

            I'm not opposed to including MCo2 as eligible to become BCT, but it doesn't feel the same as a BCT. It feels eligible to become a BCT.

            I am additionally wondering if there is public criteria for which specific methodologies can become a MCo2? For Klima to accept MCO2 at the token level, it has to accept its underlying criteria, which isn't highly detailed in this proposal, which just lists a few verra project links in the comments. For example, if MCo2 decides to accept Gold Standard projects in its criteria, is there the possibility that these MCo2s could be bonded in a pool even though Gold Standard is not yet accepted to the Klima treasury? Since MCo2 is a fungible asset type, is there a way that the criteria of what is within a MCO2 can be sure to meet the criteria of Klima (as is done by the Toucan bridge)?

            This relates to the underlying question of what is the hierarchy of inclusions criteria - is that still driven by the methodology inclusion criteria of the klima treasury? Can an asset, once included, divert from that inclusion criteria, or is bound by it? I don't know the answer here so looking for others opinions on these relationships.

              Tiago Thanks for further elucidating the additionality associated with these specific REDD projects - this seems to be the case with liquidity at large for many types of methodologies that are included in the Klima treasury at current. Can you share more about the financial relationships moss has with the project developers? Does Moss buy the credits, and that is the only financial transaction, or do the project developers have some role in the defi upside of MCo2? I'm personally curious as to their role in your ecosystem.

                Dionysus i'm excited that you've chimed in here as we always have great discussions! a few responses:

                original Q: "Is there a risk to adopting a heavily VC-funded, centralized exchange traded asset as the first expansion of the Klima treasury?”

                • I'm not for or against VC funding as I've been on all sides in my career (as you know). I'm pro climate impact investing of all colors! The point I am trying to highlight is that in this context moss is a centralized corporate entity, not a DAO, a blockchain company, or a layer 1 protocol with a decentralized community, so the financial upside to this decision distinctly benefits their investors, who they have a fiduciary responsibility to maximize corporate profits for. It's web2 + bridging, and mirrors the OTC market relationships which klima states it intends to disrupt. A centralized organization listing a carbon token on a centralized exchange as its launch strategy does allow for people to purchase MCo2 easily, which is great for moss and opens avenues for liquidity, but is something quite different than many of the protocols and DAOs of the space are designing or coordinating for with decentralized exchanges. To some people, many of whom invested in the klima treasury, this distinction is quite important and is something they are designing to disrupt. Perhaps what I am uncovering is that the klima community is agnostic to these power dynamics? If carbon is tokenized carbon, perhaps that is the most important aspect to consider in this proposal's context?

                original Q: “Are moss assets the same quality, or lower or higher, than assets already in the treasury?”

                • Not trying to be a FUD-muffin, although i do like to bake a little dissent pie when it creates good conversations 😉 I was trying to uncover if there was something distinct about the Mco2 that wasn't clear in the proposal (is there extra project verification or remote sensing or something?). It would be great if the moss team could clarify their role in the project links -> are they just performing the role of a bridge? did they buy these credits outright? are they performing project financing? are the MCo2 tokens so distributed because of their listing on coinbase that this would be a mute inquiry at this juncture?

                • for public record, I feel aligned with your comments overall about the reliance on existing standards. at the maturation level of this marketplace it's a reasonable approach to ensuring quality, and i wasn't directly questioning whether these 4 projects were more or less quality than a BCT; it's well known that i feel index differentiation is a valuable strategy to create informed price discovery for different forms of carbon, and that the blended price average of BCT is what it is! that question was posed as an invitation for moss to offer more detail if they felt it was relevant, and i think it's a worthy edge to explore as it underpins core tokenomics questions that have real financial outcomes for klimates.

                Q: Learn more about moss

                • yes to AMA! since moss have a fairly limited role in the klima discord channels they dont feel as entrenched in the public discussions as some other projects and partners do - i think the community would welcome the opportunity better understand this organization, and to have a health QA session to address some of their questions!

                Q: role of moss token, bct, TCO2?

                • I look forward to seeing this modeling! I'm a numbers gal, and I know that understanding the economic upside (or downside) of a for or against vote would provide many people an effective way to make a decision on this proposal, all other inquiries aside.

                Onward!

                RainbowWarrior

                The argument for me isn't about the quality of the credits, it's that MCO2 pretty much acts as a Moss token by proxy. Moss is a centralized, VC backed company , they are picking the projects, buying the credits tokenizing them and then selling them. This kind of policy decision enriches them, and other MCO2 token holders, and is again just another middleman, who I thought the whole point of this was to replace?

                I thought the point of Klima was to drive up the price of carbon offsets to make it cheaper for companies to not pollute in the first place, and to make it profitable for projects to pull carbon out of the atmosphere - i.e. using market mechanisms to incentivise the behaviours we need.

                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?

                With BCT, any carbon project can bridge their own tokens and mint Klima or use the BCT to take out a loan and finance themselves. None of this is possible for MCO2 and centralised approaches like this.

                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?

                Also, if MCO2 is a treasury asset, that doesn't stop projects from bridging to BCT - it just offers another option that some projects might be able to use.

                On top of all of this, we have fragmentation of liquidity, and competing tokens... again... re-inventing the same this that was always there off chain in the first place.... The whole point of bringing credits on chain is to build an abstraction layer and meta-registry on top of these different credit types, but now we have another abstraction next to an existing abstraction, and we just end up with an even more ugly fragmented, illiquid monster markets than before...

                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?

                  SBax_Regen

                  I see what you're saying now. At a high level, KLIMA currently has an intrinsic value of 1 carbon tonnage. This means (if this proposal passes snapshot), both BCT and MCO2 are used to back each KLIMA token, as they both represent 1 carbon ton. Since both are VCU's, as well as MCO2's carbon credits are comprised of more higher quality carbon credits, its valid to consider it for backing.

                  For certification, I regard both Verra and Gold standard to be very reputable carbon certifiers, so if in the future BCT or MCO2 decide to go that route, then we'd still accept them as a carbon asset.

                  I an in favour of bonding for both the pair and the MCO2 token