MarcusAurelius

  • 14 Oct
  • Joined Nov 28, 2021
  • optima this is an exciting first step into the brave new inter-chain world, and I think Base is a very appropriate choice for the first new chain to deploy this strategy on given their rapid growth, large userbase and connections with corporate and institutional clients via Coinbase.

    As this initial cross-chain approach rolls out, I'm curious to learn more about any sources of digital carbon emerging on Base. Meanwhile, Axelar seems like a useful and reasonably secure mechanism for providing retirement functionality for carbon credits available on Polygon PoS.

    I'm curious if any Klimates have experience working with Axelar on other projects? From what I've seen it seems quite robust and relatively easy to implement.

    I'm also curious which DEX we'd be deploying the KLIMA/wETH liquidity on? The top DEXs on Base are Uniswap and Aerodrome... any opinions out there on which to prefer?

    • I'm glad to see this amended proposal with more favorable terms (folding in existing forward financing funds for this project and making year 3 purchase contingent on brokering of existing forward units).

      I'm also glad to see Aither engaging the community via office hours tomorrow, though I would still like to see some level of engagement between KlimaDAO and the project developer directly.

      Nevertheless, I am more convinced of the value of having KlimaDAO as the main project proponent, and the smaller locked-in check size appeases my concern about draining the DAO's stablecoin reserves with this deal.

    • Aither_Carbon thanks for addressing my questions - though given the delayed response the poll has now closed with more votes "against" than "for" - so per KlimaDAO's governance framework, this proposal won't move forward to Snapshot as-is

      Again, I want to emphasize that I would love to see KlimaDAO be a project proponent, it just seems to me that this proposal is sized too large and the methodology is too new/high-risk to be allocating this amount of capital to a single project.

      I hope a similar proposal will come forward in future that is a more modest size and doesn't overly expose the KlimaDAO treasury to one particular project/methodology. I'd also love to see the project developer themselves engaging in the KlimaDAO governance/diligence process.

    • Especially given the large size of this deal, I'm concerned that neither Aither nor the project developer has engaged in forum discussion regarding this proposal

      While I supported the original HECTOR forward financing proposal, as it stands, given the large size of this follow-up proposal relative to KlimaDAO's available capital and the remaining unresolved questions, I do not support this proposal in its current form and have voted "No"

    • Cujo while this is an exciting opportunity to have KlimaDAO more deeply involved in the project development process, I have several concerns that have not yet been addressed in previous discussion of this proposal.

      1. How does the project mitigate the risk of carbon credit price volatility over the 5-year term? Why is KlimaDAO paying $15.75 per tonne over the life of the deal, when we purchased 16,667 tons for $14.75/ea? Does a larger check size not correlate to a lower price? This is tough to swallow...
      2. Is it possible to reduce the check size? $1.2m is a significantly larger capital deployment than past forward purchases, and would consume the majority of the treasury's remaining idle cash - I'm concerned we are putting too many eggs in one basket...
      3. Is the involvement exclusive? What exactly will the PDD look like with KlimaDAO as “stakeholder”? Are there other investors or financiers who will also be included as stakeholders in the PDD?
      4. Given the first vintage is 2023, I assume this project is already underway and the registration process has started? How much does it cost to get a new village online, and what is the carbon sequestration potential of each new village? How many villages/communities are these installed in so far, and how many are there left to be installed? Could someone from the project also provide some kind of budget or breakdown of overhead costs/fees vs. the price that KlimaDAO is paying?

      Again, I understand the general benefit of having KlimaDAO more involved in a project's early development, but I am concerned about the size of the ask, combined with the risks around a new methodology, and the low level of optionality this would leave for KlimaDAO's treasury... I need to be convinced the large deployment and project risks are justified

    • Overall I am strongly in favor of this proposal. It clarifies many operational aspects of KlimaDAO, provides a mechanism to automate the toilsome process of issuing and removing permissions, as well as increasing the level of decentralization and transparency in key decision-making processes.

    • optima since Toucan's governance forum was decommissioned, there is currently no way for KlimaDAO to influence BCT pool parameters

      Given that KlimaDAO holds 90%+ of BCT tokens, it is critical that KlimaDAO has a clear mechanism for governing the BCT pool, and this proposal provides such a mechanism for a relatively modest cost (compared to the total value of the BCT pool)

      I am in favor of advancing this RFC to KIP and will vote accordingly as a member of the KRC

    • Cujo very exciting opportunity to diversify the treasury's methodology composition, and given Gold Standard's recent publication of their working group reports which provide a clear path for tokenization, I'm optimistic the DAO will actually be able to take delivery of these GS credits via tokenization

      I'm in favor

    • I'm in favor of this proposal - diversifying the treasury's registry exposure to include ICR is very sensible, and this project seems very promising and relevant, despite the smaller number of credits to be delivered in the short term.

    • I'm in favor of rebalancing KLIMA/USDC liquidity given the very low utilization at the current level of liquidity.

      Agree with Optima's assessment that deploying treasury capital to support CEX liquidity should only be done opportunistically, but having the KLIMA on hand to take advantage of opportunities like launching new KLIMA-carbon liquidity pools or bolstering CEX liquidity rather than sitting underutilized in KLIMA/USDC makes sense to me

    • This is an exciting opportunity to expand the Digital Carbon Market and KlimaDAO's ecosystem, demonstrating the unique advantages of open, permission-minimized infrastructure for climate finance.

      Voted "yes"

    • Dionysus thank you for addressing these points.

      On the merits of the separation: KlimaDAO is aiming to disrupt a high margin, low volume incumbent industry with a high volume, low margin business model.

      That model relies on demand for carbon credit retirement, and the biggest consumers of carbon credits are outside of the web3 bubble. Furthermore, most web3 projects are not prioritizing sustainability initiatives given the difficult conditions and need to preserve runway.

      So we must seek out end-users who are not yet onboarded on-chain, which requires providing a clean, clear and user-friendly experience, more akin to Goldfinch's new UX or friend.tech rather than assuming users have a wallet with funds onboarded already. Automated integrations via Provide's SAP integration and the Carbonmark API also represent key levers for attracting new demand.

      On the specifics of the proposal, my concern with tranched funding is that it perpetuates the tenuous short term funding asks that have created uncertainty for existing KlimaDAO contributors and limited our ability to attract and retain top talent (especially engineers).

      That said, I am in favor of some formal mechanism to ensure that Carbonmark's product development accrues value to KlimaDAO.

      This has been one of the biggest disappointments in the development of the ReFi/Digital Carbon ecosystem: very few players are proudly standing alongside and building products that support KlimaDAO's pioneering infrastructure, instead extracting value from the pools we provide liquidity for or building around it by avoiding the retirement aggregator.

      As Dionysus said, all of the initial contributors to the new Carbonmark organization will be KLIMA holders, and therefore values-aligned, but some formal mechanism in the new Carbonmark organization would ensure that even if those contributors move on, the new organization would still be aligned with KlimaDAO's long term success.

      I think a revised version of this proposal, KIP-45a, could incorporate the feedback provided so far and chart a clearer path forward for the new Carbonmark organization. In particular:

      1. Lay out the planned roadmap for Carbonmark (though it will be much the same as that outlined in the previous funding ask for Product & Engineering)
      2. Clarify the source of funds, estimated budget breakdown, etc. that 0xy as shared in his responses to comments since the original proposal
      3. Specify that a mechanism must be included in the founding docs/bylaws of the new Carbonmark organization to align with and accrue value to KlimaDAO based on the success of Carbonmark's products.

      As for the size of the ask, personally I don't find it excessive at the reduced burn rate, and 18 months is already on the edge of a viable runway for a new organization just starting out (especially in the current funding environment).

      There is a lot of work to be done integrating new credit supply into Carbonmark from ICR, Coorest and others in the pipeline pending governance approval.

      This important work will both benefit KlimaDAO by providing more throughput in the retirement aggregator and any liquidity pools launched to support these new credits, as well as Carbonmark by providing users with a broader range of high integrity credits. There is also potentially an opportunity to integrate forward credits from the Solid World pools into Carbonmark, which will entail additional engineering work.

    • Very exciting opportunity for KlimaDAO to move into the removals space!

      I'm still learning about the details of Limenet's process, but I have some general questions so far:

      • Has the methodology actually been deployed in production yet?
      • If so, how many tonnes have been delivered so far?
      • Where is the first production plant located? I see there was a pilot site in Italy but also noted that energy grid carbon intensity isn't favorable for large scale production in Italy
      • Glad to see the methodology involves a third party verification process - have any specific third party verifiers been identified yet? Didn't see any listed on the website
    • aOCP thanks for submitting this response to KlimaDAO's RFP for alternative carbon standards!

      Look forward to engaging with your team as the KlimaDAO community considers inclusion of these assets in our ecosystem - I met one of your team members, Alejandra, when we were both on a panel at Impact Blockchain Conference in Paris a few weeks ago

      A few follow-up questions:

      1. For the carbon-denominated assets, how many tonnes do you anticipate issuing by the end of this year and next year?
      2. Have you already submitted, or do you intend to, submit an application for CCP labeling from the ICVCM?
      3. Of the 12 projects already in the pipeline, could you provide a breakdown of the methodologies they'll be issuing under? Curious to understand which methodologies will have the most supply coming online in the short-term
      • AndrewSaul thanks for these comments and your continued support

        Totally agree re: grant hamster wheel, thankfully KlimaDAO has clear levers for capturing value from its products and services (e.g. liquidity provider fees, bonding, retirement aggregator convenience fee) so we aren't reliant on grants, but adoption of digital carbon for a diverse set of use-cases is critical to drive activity through those systems.

        Historically we've worked with a variety of DeFi and broader web3 projects to compensate for their historical and ongoing emissions using KlimaDAO's digital carbon market infrastructure, such as Goldfinch, Alchemix, and Polygon PoS itself. This is definitely an important area to continue to focus on, but ultimately is a pretty small segment of global emissions.

        In terms of integrating sKLIMA as an asset into other DeFi protocols, KLIMA isn't a network-specific gas token like SOL - it's designed as a liquid medium of exchange for environmental assets and the governance token for managing the KlimaDAO protocol and treasury. So, I'm not sure the analogy with liquid staking tokens like mSOL or rETH is super relevant - curious to hear what specific kind of integrations you have in mind.

        For instance, there has long been a borrowing/lending pool that includes sKLIMA on market.xyz: https://polygon.market.xyz/pool/5

        We've also led the market in developing climate positive NFT strategies, some of which involve sKLIMA, as outlined in this blog post: https://www.klimadao.finance/blog/climate-positive-nft-guide

        In terms of integrating KLIMA and carbon credit retirements into other on-chain services like gaming and social, definitely on the radar. For instance, I've been trying to get a carbon credit retirement Collect module added to Lens Protocol since last year - it took them awhile to figure out their process for enabling community-contributed modules, but I worked with a hackathon team at ETHPrague last week to get a proper Lenster integration built out, and look forward to that module being accepted by the Lens Protocol community.

        That said, I'm not sure staking is "easy to understand" for non-crypto people. In my experience, technical terms like "stake," "wrap" and "bond" tend to confuse non-crypto users, so we've limited those interfaces to the KlimaDAO dApp and moved the more "user facing" functionality for buying and retiring carbon credits to a separate application, Carbonmark, that is more user-friendly and less crypto-focused.

        Hope that addresses your questions, happy to discuss further

      • ICR thanks for the reply, that approach to methodology lifecycle management makes sense to me

        • ICR likes this.
      • ICR thanks for this thorough RFC, glad to see more registries seeking to integrate their credits into KlimaDAO's digital carbon infrastructure

        A few questions come to mind:

        1. What is the process for accepting (and deprecating) specific methodologies? Will any methodology that follows the ISO standard be supported? For instance, will older CDM methodologies be allowed to issue credits under ICR?

        In particular, I'm concerned about the potential for methodologies like HFC-23 decomposition that attracted so much controversy being able to issue again under ICR. Legacy registries like Verra explicitly deprecated this particular methodology, and I'm curious if ICR has a process for managing methodologies through their lifecycle (methodology creation, first issuance, revision, and if appropriate, deprecation).

        2. What does the project pipeline look like? How many tonnes do you anticipate being issued in the next year?