Cryptophiles are embracing carbon. When it comes to the carbon market, cryptocurrency technology is creating waves. Amounts in the millions of dollars worth of carbon credits. For offsetting greenhouse gas emissions have been virtually attached. To freshly issued cryptocurrency tokens and removed from circulation in recent months. The technology, according to some market players. Is providing transparency to the uncontrolled voluntary carbon market. And assisting in the creation of new incentives for initiatives. That improve the environment. Not everyone is persuaded, however.
Many businesses that want to offset their greenhouse gas emissions purchase credits. That indicate reductions in greenhouse gas emissions. These credits, each of which represents one metric ton of carbon dioxide. Are derived from programs such as tree planting. Or the establishment of renewable-energy farms that have been certified. By a third party as having a positive climate impact. They are exchanged on informal marketplaces. Where they command a variety of values depending on the carbon-removal activity performed on them.
Some participants in this rapidly expanding market want more transparency. And uniform norms, claiming that a patchwork of standards. As well as unclear prices make it difficult to compare credits. Plus determine whether or not the projects are genuinely beneficial to the environment. Industry group, the Taskforce on Scaling Voluntary Carbon Markets. Asserts that by making it easy to trade credits and trace them. Such as by documenting transactions publicly, more companies will be able. To employ offsets to help them reach their climate-change objectives.
Toucan, a DeFi project started in October for Cryptophiles
Toucan, a decentralised finance, or DeFi, project that began in October. Claims that its technology can be of assistance in this situation. Toucan allows customers who own carbon credits to link those credits to digital tokens. Which are then traded on the exchange. BCT tokens (which stand for Base Carbon Tonne). Can then be traded on cryptocurrency exchanges to make money. The nature of the underlying projects remains unchanged. But Toucan claims that by giving real-time pricing data. As well as a public record of deals, it will facilitate trading and promote transparency. Allowing investors to see who is taking the credit for supporting climate-benefiting initiatives.
“In order to maximize their impact, the world’s rapidly expanding voluntary carbon markets. Must be operated on a transparent, digital, and neutral basis.” Said James Farrell, Toucan’s technology leader.
Founded in Switzerland, Toucan is one of several initiatives. Not all including cryptography — aimed at overhauling the voluntary carbon market. By providing more transparent pricing and ownership data, among other things. So far, more than 17 million carbon credits have linked to BCT tokens. Making them the most valuable cryptocurrency. BCT was recently trading at roughly $5.50. Which means that those also carbon credits are now worth. More than $90 million on cryptocurrency platforms, according to CoinMarketCap.
Carbon offset companies aren’t Toucan’s main users
Carbon offset companies aren’t Toucan’s main users. Klima, a crypto asset created on the same day as Toucan. Has been driving BCT activity since October. The two projects are “friendly and synergistic,” according to Toucan’s website.
This Klima run by KlimaDAO, a decentralized autonomous organisation. That coordinates crypto initiatives.
The KlimaDAO allows BCT holders to buy Klima tokens. As a result, the BCT tokens stored in the KlimaDAO treasury. And cannot used to offset carbon emissions. Traders can speculate on a carbon-backed crypto asset. By trading Klima tokens on cryptocurrency platforms.
Bitcoin mining consumes a lot of energy, hence it has a terrible environmental reputation. Klima’s mostly anonymous developers think its tokens assist the climate. Klima should raise prices by limiting the supply of carbon credits, they argue. Making carbon-offsetting projects more profitable also and encouraging more.
But Margaret Kim, CEO of Gold Standard, one of the major carbon-credit registries. Says Klima hinders market transparency initiatives.
“We strongly oppose speculative usage of blockchain technology in carbon markets,” she stated. “We are concerned about Klima since the creators remain nameless. Which goes against the need for transparency in climate action and carbon markets in particular.”
Klima’s credit balances may fluctuate. The treasury described as a “carbon black hole” on the KlimaDAO website. Although the project’s protocol allows credits to released if Klima falls below BCT. Klima has so far outperformed BCT.
Additionally, KlimaDAO’s developers are nameless. But “their acts are entirely visible,” according to Toucan’s Farrell.
Those Klima coins back by about 14 million BCT tokens. Out of a total of over 17 million BCT tokens.