Introduction

$Klima is an algorithmic carbon-backed currency on the Polygon chain aiming to become a liquidity engine for the carbon markets. Klima DAO allows Web3 builders and users to participate in the carbon market through the KLIMA token. KLIMA tokens are fungible, are backed by at least 1 Verified Carbon Unit* in the Klima DAO treasury, and holders of KLIMA will have the ability to vote on Klima DAO policy.

History

A group of anonymous builders launched Klima DAO on 18th October 2021. Klima DAO is a fork of Olympus DAO, and its token $Klima is a rebasing token similar to the mechanism of $OHM.

Mechanism

Bridging Carbon Credits on-chain Regenerative projects in the real world help remove the greenhouse gases from the atmosphere using reforestation and other regenerative techniques. These projects create an equivalent amount of Carbon credits available on the market through a verification process agreed upon by the voluntary market. These carbon credits are then tradable and are utilized by large companies to offset their carbon footprint by purchasing them off the market. Thus, indirectly funding these projects. However, the current carbon market lacks the liquidity to sustain efficient trading.

Toucan Protocol is a web3 project which provides the infrastructure to bring these off-chain Carbon Credits over to the blockchain. Like we have bridges to send crypto tokens between L1s or L2 blockchains, the Toucan protocol acts as a bridge between the real and blockchain worlds. Users or projects can bridge their Carbon Credits after undergoing the verification and validation process by Verra. Verra ensures valid tokenization and that the real-world carbon credits are retired forever to avoid duplication and malpractices.

Known on-chain tokens for Carbon Credits

BCT: Toucan Base Carbon Tonne

NCT: Nature Carbon Tonne

MCO2: MOSS Carbon Credit Token

Bonding Klima DAO uses the bonding mechanism from Olympus DAO; that is, they provide $Klima at a discount to anyone who bonds their on-chain carbon credits with their protocol. The users get cheaper $KLIMA, and the protocol grows their treasury of Carbon Credits which is used to back the value of the Klima token.

Intrinsically, the value of 1 $KLIMA token is 1 unit of Carbon Credit, but because there is no cap to how high the price can rise, the value of $KLIMA is up to the market.

Staking

$KLIMA holders can stake their tokens to earn an agreed-upon APY from the DAO voting. The staked KLima token is $sKLIMA, which rebases as per the APY.

Goal

The broader goal of Klima is to become a "Blackhole for Carbon Credits." The DAO's treasury promises to lock in the bonded Carbon, which helps raise the prices of Carbon Credits in the market.

Higher costs to obtain Carbon Credits would subsequently cause companies and organizations to work on reducing their carbon footprint instead of just offsetting them.