KlimaDAO Forum

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.

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.

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.

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?