Discussion for CGP 30: Add voluntary carbon credits to the reserve

Hi all,
this is a thread for discussing CGP 30: Add voluntary carbon credits to the reserve.

Much of the current discourse around the environmental impact of cryptocurrencies centers around the carbon footprint of bitcoin. The design of Celo addresses this concern in three important ways:

  • First, the Celo consensus protocol uses an energy efficient proof-of-stake mechanism.
  • Second, the protocol offsets the carbon emissions associated with consensus at the protocol level.
  • Third, there exist tokenized carbon credits on Celo (for example mCO2), that then enable composable ecological assets.

CGP 30 is the result of the Call for Proposals of the Reserve for tokenized carbon credits, and proposes to add a small percentage of tokenized carbon credits to the reserve allocation.

The current PR for the CGP can be found here: celo-proposals/0030.md at master · celo-org/celo-proposals · GitHub

Appreciate all feedback!
Thanks,
Markus

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Love it! This is a great step towards building a monetary system that encourages the preservation (as opposed to exploitation) of the earth’s natural resources.

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Hi @MarkusBerlin ,

As I understand, putting carbon credits in the reserve would not be collateral so much as a commitment to offset a certain amount of CO2.

Surely carbon credits have an expiry date? Or am I misunderstanding what the MCO2 credits are?

In other words, do carbon credits provide solid collateral that can be liquidated if the reserve comes under pressure?

Thanks.

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Great questions, thanks @Pinotio.com.
First on the token itself: The cMCO2 token is issued against a pool of projects. These (certified) voluntary carbon credits do not expire (until they would be purchased by someone that would like to consume and cancel them as a compensation for carbon emission).
Then on the commitment to offset CO2 emissions: The platform offsets carbon emission directly on the protocol level, so it is not planned initially to consume the credit and cancel the token, but rather hold onto it, and therefore add to the value of this asset class by holding it in the reserve. On the use of this asset as collateral: The reserve / the community can hold onto this asset, as long as there is a liquid market for it, it would qualify as a reserve asset. Of course the reserve / the community could also decide at some point to consume or cancel the asset, or the stability protocol could make it necessary to trade it.
When the reserve has a target allocation dedicated to nature backed assets (or carbon credit), more demand for stablecoin would also create a higher demand of the reserve for these nature backed assets (similar to the link between the governance asset and demand for stablecoin). This would have a very positive effect on the environment, a thriving ecosystem would also protect our natural world.
Please let me know what you think!!
Thank you.

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Some thoughts re: carbon credits as collateral:

Members of Curve Labs has been actively researching carbon credit/offset tokens for usage as collateral for over a year now, starting from the initiation of the C02ken project. Our ultimate aim is to create regenerative currency as described in this blog post by myself.

Our thinking on using credits as collateral has fluctuated quite a bit in this timeframe, and there are a number of design considerations that need to be applied:

  • On one hand, using credits as collateral suggests increased demand for these credits, as it reduces the secondary market supply. This, ceteris paribus, increases the price and consequently reduces the incentives for polluters to pollute.

  • On the other hand, credits represent a financial artifact that is meant to be retired. This means, essentially, carbon credits are meant to be burned at some point in their life. There is no instance of a collateral being used in DeFi that is implicitly intended to be burned at some point in its lifecycle.

Navigating this design tension — the social utility gained by increasing credit price vs. the intrinsic aspect of credits being burned — requires some careful navigation. Effectively governing the amount of carbon credits in the reserve – and the type of these credits – will require a more activist approach than simply setting a value (.5%, per your proposal). What could/should such an activistic governance look like?

  • The first and most important issue is that what you are proposing is a de facto monopoly in support of the cMCO2 token. This creates a bottleneck and a reseller monopoly. A more appropriate artifact to collateralize would be something of a carbon credit index — likely some sort of n-dimensional bonded surface (i.e. Balancer LP tokens). To emphasize my point here:
  1. To initiate the nature backed assets portfolio purchase $500,000 worth of existing MC02 tokens. The purchase of the token will be done in an over the counter transaction, directly with the issuer. The support team is evaluating current possibilities to safely store the token.

Given that the outstanding liquidity of the MCO2 token is $1.2m USD, you are effectively suggesting to purchase 40% of all liquidity outstanding in a single OTC deal. This illiquidity rate is a substantial risk to the integrity of the reserve that can be effectively mitigated through an index product. If I can be frank, this $500,000 purchase is a great deal for MO2, but a dangerous deal for CELO token holders – the other means of offsetting risk here is to have an OTC swap arrangement that runs both ways, but I very much doubt that MO2 would be willing to buy the reserve’s bags if the price of their token collapsed.

  • Building off of this, the second issue is that you suggest that the quantity of carbon-credit based collateral be governed by the reserve. This negates the design principle of subsidiarity: the community is not qualified, nor should it microgovern such a small concentration of reserve assets. I would propose that in addition to a carbon index — to negate the reseller monopoly you are proposing — that the governance federalize and a well qualified group of carbon experts be responsible for governing the index weights. Essentially, the .5% weight you are proposing would remain governed by the Celo holders as a whole, but the concentration of carbon-based assets in that index would adjust according to its own governance. A simple hack for governing the index is to assign its governance to LP token holders of the index itself.

Here is somewhat of an architecture of what I’m describing, borrowed from the Klima DAO, which Curve Labs researcher and C02ken founder Raphael Haupt is helping steward:

And an embed of the architecture itself:

Now, moving onto some more general issues…

“as more assets get tokenized in the future, the partitioned reserve mechanism allows for the reserves to include real assets. This is helpful from a stability perspective, and also allows for natural-capital-backed means-of-payment currencies (for example, currencies backed by forestland), where the growth in demand for those currencies will increase the amount of natural capital backing them.”

You are making a number of problematic assumptions here:

The types of natural capital assets you are describing here are tangible ecosystem assets and geographies, which implies that you are imagining ownership tokens. But carbon credits are not tangible assets; they are an abstracted representation of a change of ecological state. That is: you do not need to own ecosystem assets to sequester carbon and receive a proof-of-sequestration; you need only to get a certifying party in the carbon value chain to rubber stamp your project efforts. Returning to my point, though: Celo’s mission is to empower and work with last mile users. Many of these users live in environments of low social trust, without functioning or heavily biased legal systems. Ownership tokens do not function in low social trust environments as they need a functioning and crypto-literate legal system to retain their value. If the legal system does not uphold the true owner of some extent geography and its associated natural assets, then there is no way to redeem the tokens. Now this in itself is not an issue so long as you are working with ecological state tokens, and not ownership tokens. The difference I discuss at length in the Kolektivo white paper under the “Natural Capital System” section (pg. 35):

Comparison table embed:


Adding uncorrelated assets to the reserve further diversifies technological and price risk. Adding tokenized carbon credits to the reserve is another step towards a nature backed currency.

You are assuming that MO2 tokens are uncorrelated to the crypto-market as a whole, but I can easily demonstrate that is not the case. Here is the 90 day MO2 price over time:

price

I do not even have to calculate the coefficients for each crypto-asset for you to see the obvious correlation here. The reason MO2 is correlated here is simple to understand: most of its liquidity is against USDC. Most of USDC’s liquidity is weighed against other cryptocurrencies. If you want a truly uncorrelated asset, it needs to be introduced to a different liquidity environment.


In general – and in conclusion – I’d like to say that the thing I find most alarming here is the two assumptions you have made regarding the liquidity of MO2 token and its correlation to the other reserve assets without offering any sort of viable mathematical proof or tokenomic simulation. This looks and feels like an inside deal to me and seems absent the rigor required for understanding risk from a strictly quantitative point of view. I believe a protocol needs to be established that includes simulation and analysis for any and all assets added to the reserve.

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Thanks @MarkusBerlin for your clear answer. I can now see how the credits (unless consumed) could provide collateral.

The quality of the collateral then will depend on the quality of the certification of the credits. What is your assessment of the quality of MCO2 credits? How do they compare to best practise in terms of certification? Is this quality of certification reflected in their price?

Thank you for this detailled post. I think that this proposal comes in good faith, but I agree - especially after reading your points - that it is in need of much more rigour if it is to strengthen rather than weaken the reserve.

One question, it seems to me that (ideally) the certification process would make the carbon credit a tangible asset and that it would be an ownership rather than an ecological state token. There are many issues with fungibility in certification, but in principle I think this is possible. Would you agree?

I’m not sure if it is being done, but in principle one might use tokenized oil, or an oil index fund as collateral in reserve. Therefore, I don’t see the fact that the credit could be “burned” as an issue here. Could you expand on this?

Thanks for your comments @papa_raw!!
I fully agree with you on your initial two points that a) an increased demand for carbon credits increases the price of carbon emissions (all else equal) and therefore reduces the incentives for polluters to pollute. And another yes, if someone needs to retire carbon credit, they can purchase carbon credit and burn it, or the community could decide to burn it. But in order to respond to your conclusion, I would like to comment on a few misinterpretations in your text on the proposed CGP:

  • the reserve had and still has an open Request for Proposal public that invites any projects to propose tokenized carbon credit and will open up a second RFP for Nature Backed Assets. Currently, as discussed in the community call on this topic, only Moss replied to that RFP, so we are not proposing a monopoly of one token, and it is certainly not an inside deal. This is a public governance proposal. The reserve should be open to add more of these types of assets (tokenized carbon credit, also token with higher liquidity), and this addition would be just a start to add more nature backed assets.
  • you proposed that the reserve should look at an asset that tokenizes a carbon credit INDEX, to not rely on a single carbon credit issuance. This is a great point, I fully agree and this is exactly what this token is doing: if you take a look into the CGP the respective constituents of the token, i.e. the underlying projects, are all linked in the CGP. We also looked at the respective verra registry entries and linked them and requested audits on these projects, these are also linked in the proposal.
  • I am not proposing to purchase 40% of the outstanding liquidity in an OTC deal, I am proposing to purchase additional carbon credits directly from the issuer.
  • The CGP does not at all assume that this asset is uncorrelated, a fully uncorrelated asset would be hard to find. It just assumes that since this token is collateralized by a different asset class, the correlation of the token with the other reserve assets is lower, relative to the other assets. While this is an assumption, the asset would add to diversification of the overall risk as long as the assets are not perfectly correlated, and they are not, you showed that in your graph. Even if that assumption would not always hold in future, as markets can sometimes be messy, the 0.5% allocation would not add substantial downside risk, with the upside that, next to the positive impact on the environment, it could add diversification benefits in some market environments. These days currently are the perfect example, let me share some more basic analysis on this point:
  • You are right, more analysis is always good and I am happy to discuss what could serve as a good estimate for an empirical correlation between the reserve assets and I would be interested in what you mean with a mathematical proof. What do you have in mind there? To add a bit more background on this: Very simple estimates of the (USD based) return correlation between BTC and ETH indicates that this year the correlation between those assets is higher than 0.85 (based on a 30d, 60d, 90d, 180d, and 360d estimation). Certainly it is much harder to estimate a historical correlation for MCO2 with these assets based on the available history. You can estimate on a short time horizon or bootstrap data on this time horizon and simulate it. Or we take the current market as an example and look at data on CMC, that shows that the correlation based on the last 100 days (1d and 7d) of MCO2 / BTC and of MCO2 / ETH is approx. half of the correlation than that of BTC / ETH. Again, these are just estimates given the available data (To simulate this: In the stability analysis we have modelled correlation between reserve assets via a factor structure and included market wide jumps in the resulting asset set), but it indicates that now the correlation is very low, relative to other reserve assets and therefore would add diversification benefits in this market environment. And even if the observed low correlation would be representative, it says not much about the relation of (crypto) crash correlation (or non-linear effects) and normal time correlation. But the last 100 days hint to the potential conclusion, that price crashes in the market for carbon credit are not always related to price crashes in the market for crypto assets. In the end the most important point is that the asset also diversifies price risk. If you would like me to add more analysis, please let me know.

I hope this covers your concerns on the proposed token in the CGP and I am very happy to chat more about nature backed assets and their potential. Please let me know if you have other questions or would like to dig deeper into the simulation.

A response:

I would like to comment on a few misinterpretations in your text on the proposed CGP:

Before responding here, I want to point out that my response was to this proposal as written, interpreting the text and nothing but the text. My assumption in responding to this proposal is this is the proposal that is intended to be proposed. Please let me know if that’s not the case.

Currently, as discussed in the community call on this topic, only Moss replied to that RFP, so we are not proposing a monopoly of one token, and it is certainly not an inside deal.

This proposal actually does propose a monopoly of one token – according to its text. Now how did this monopoly come to be, and why is it problematic?

The curation process applied to arrive at this monopoly was “people who applied to the RFP.” The principle issue here – one I deeply contend – is that an RFP is not a suitable methodology for selecting reserve assets. RFPs are fundamentally reactive: they ask current market participants who are aware of the RFP to provide some sort of current solution to a problem, but if the problem is not well scoped, the solutions will not suffice.

(1) I don’t think your problem is well scoped, which is why I highlight the differences between ecosystem assets (ownership tokens) and ecological state assets – these are fundamentally two different types of tokens that behave in different ways. This RFP seems to be dealing with the latter, and I’ll be the first to admit that I am heavily biased against ecological state tokens of global scope (more on this later).

(2) A proactive approach that is contingent on some collateral asset protocol is going to get you higher quality collateral than an RFP. I briefly discuss what such a protocol would look like at the end of this post. But in general: reaching out to groups like Nori or Klima DAO and thoroughly researching this issue makes much more sense than believing that they will run over to Celo’s ecosystem to be added as collateral. From a purely PR perspective, Celo simply doesn’t have that level of industry clout (vs. something like DAI).

In relation to (1), you say:

The reserve should be open to add more of these types of assets (tokenized carbon credit, also token with higher liquidity), and this addition would be just a start to add more nature backed assets.

… and it’s not clear what you mean here. Assets that are “nature backed” suggest you are talking about the ownership of natural capital, but this is not what carbon credits are – they are ecological state tokens that demonstrate a prior change of state. By using them as collateral, you are increasing demand for them according to the reserve’s money demand, but I don’t believe you are efficiently solving your stated problem, which is “protecting our natural world” – you are in effect subsidizing a receipt that grants some right to pollute, which we don’t want to do in the first place. Regardless of whether or not this introduces substantial risk to the reserve, it does not incentivize future proofs-of-state change; or to the extent that it does it’s a secondary effect of being selected as collateral.

The more obvious mechanism here is to simply (a) directly pay those groups sequestering carbon or (b) create a mechanism that does incentivize future proofs-of-state change. (I discuss this at length in the Kolektivo whitepaper and suggest that parametric insurance would be such a suitable mechanism). There’s a real tendency to overengineer things in this space, so solutions like (a) tend to be overlooked. Finally, if we agree that simply increasing the cost of carbon credits in the open market is the primary objective, then why bother with collateralizing them and introducing risk to the reserve? Simply (c) purchase them outright and retire them.

We spent 12 months banging our heads against the wall looking for a way around this core issue with collateralizing ecological state tokens (a token, again, which exists to be burned). We couldn’t find it in the global liquidity environment, but we think it’s feasible in a localized liquidity environment with clear relationship between the reported proofs-of-state change and community currency users. I again discuss this in the aforementioned whitepaper.

you proposed that the reserve should look at an asset that tokenizes a carbon credit INDEX, to not rely on a single carbon credit issuance. This is a great point, I fully agree and this is exactly what this token is doing: if you take a look into the CGP the respective constituents of the token, i.e. the underlying projects, are all linked in the CGP.

Yes, but you missed the entirety of my argument, which was to apply the principle of subsidiarity in a blockchain-native environment. This is why I propose an N-dimensional bonded surface (e.g. Balancer) and not an index built on social trust and audits: it enables decentralized governance to occur for LP-token holders at the appropriate governance level of recursion.

I am not proposing to purchase 40% of the outstanding liquidity in an OTC deal, I am proposing to purchase additional carbon credits directly from the issuer.

I either don’t understand you here, or you’re saying the same thing twice. If you are buying $500k of tokens OTC from the issuer, you are still buying tokens equal 40% of the outstanding liquidity on the secondary market today. Maybe you can clarify this point again.

It just assumes that since this token is collateralized by a different asset class

This might be a language issue here, but I believe the token is not collateralized: it is wrapped and represents a carbon credit (right to pollute).

It just assumes that since this token is collateralized by a different asset class, the correlation of the token with the other reserve assets is lower, relative to the other assets. While this is an assumption, the asset would add to diversification of the overall risk as long as the assets are not perfectly correlated, and they are not, you showed that in your graph. Even if that assumption would not always hold in future, as markets can sometimes be messy, the 0.5% allocation would not add substantial downside risk, with the upside that, next to the positive impact on the environment, it could add diversification benefits in some market environments.

If you’re assuming this is true, this is a problem: it should not be an assumption. You should be proactively calculating the correlations for each “natural capital asset” available and high quality on the market today and reaching out to those ones that maximize your diversification strategy. Simply accepting the first accept – in our case MCO2 – to apply to the reserve seems like a rather non-rigorous means of accomplishing what you’re describing above re: diversification.

next to the positive impact on the environment

This seems like a stretch. The opportunity cost of spending $500k on these tokens (which are receipts representing a right to pollute) and adding them as a form of very risky collateral vs. simply paying $500k directly to sequestration efforts is questionable (either through donation or purchasing and retiring credits). Given that we work in a Web3 environment, this $500k could even be spent on capital formation for those project groups that engage in proofs-of-impact by investing in their tokenization and institutional formation as DAOs. I imagine this sort of creative investment strategy will become popular for “green investing” in the future.

Some final responses:

Certainly it is much harder to estimate a historical correlation for MCO2 with these assets based on the available history.

This in itself should be a red flag for adding any form of collateral to the reserve. if what is needed and prioritized is that which “diversifies price risk,” then this needs to be quantitatively expressed with clear thresholds as to what and what isn’t appropriate. From my perspective, simply because an asset only makes up .5% of the reserve doesn’t mean it shouldn’t be subjected to a standard, baseline level of scrutiny. But more than this: it seems to me a good reserve asset standard would lay out…

  • What correlation values are acceptable (relative to the other collateral in the reserve, and those collaterals relative to each other)
  • The liquidity depth of each asset
  • The % of all liquidity outstanding held by the reserve (this again is my biggest issue with this token)
  • For wrapped assets: the match between the asset and its wrapped counterpart. If wrapped credits are trading higher than their legacy counterparts, something is extremely wrong (which I believe happened with MCO2…)
  • The trust assumptions latent in each asset. You are making, for instance, many social trust assumptions about this token that are not present with any other token in the reserve (perhaps excluding DAI – but it is far more politically decentralized than this token).
  • Public, relevant simulations data. You guys do a great job in the stability paper. For adding new assets doesn’t it make sense to do the same?

Cheers.

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@MarkusBerlin , @papa_raw - just a comment on MCO2 correlation.

If you are finding high correlation between crypto and MCO2 that suggests to me a high level of concern that MCO2 is not truly tracking CO2 prices.

I would expect some correlation between CO2 credits (not MCO2) and crypto prices, but anything higher than 0.5 seems wrong. If MCO2 correlation is higher than 0.5, that suggests to me that MCO2 is not a trustworthy carbon credit.

I think it would be an idea, in deciding whether to accept a carbon credit, that the carbon credit crypto should be able to show that their price is highly correlated with some independent real world CO2 price (maybe chainlink have something?)

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Great discussion, @MarkusBerlin, @papa_raw, @Pinotio.com!

Let me take a step back because I think that the discussion ventured beyond the scope of the proposal at hand.

I think we all agree that the ultimate aim is to add nature-backed assets for ecological regeneration and risk diversification purposes to the reserve. This is an ambitious long-term goal and the proposed addition of MCO2 tokens should only be regarded as a first step in this direction.

What @papa_raw is describing is a more broader framework of (i) how assets should be added to the reserve and (ii) how reserve weights should be chosen for a given set of assets. I agree that these are important questions, as these are the steps that we will have to think about to decentralize the reserve further. But I think it is beyond the scope of this proposal, which is essentially an incremental effort to diversify the reserve as it currently is away from BTC holdings to other tokenized assets given the current reserve mechanisms in place.

The proposal also does not propose a monopoly of one token. It is the first of (hopefully) many initiatives to diversify the reserve away from pure-play crypto holdings towards nature-backed assets. This does not preclude the addition of further assets in the future. It is also always good to think about improvements to the selection mechanism to identify candidate assets for inclusion in the reserve but given the current selection mechanism in place (RFP), we should think about whether the proposed inclusion of MCO2 tokens is beneficial for the reserve or not.

In my view this reduces the current discussion to the following three open questions:

1. Will the 0.5% shift away from BTC holdings to MCO2 holdings add stability to the reserve? (see discussion between @MarkusBerlin, @papa_raw and @Pinotio.com )

The question is not whether MCO2 is the least correlated asset out there (it isn’t). The question is whether by replacing parts of the current BTC holdings with MCO2 holdings we increase overall reserve stability and I believe there are good reasons to think that the answer is yes.

Whether or not MCO2 increases reserve stability depends on whether MCO2 itself is more volatile than BTC and whether MCO2 exhibits lower co-movement with remaining reserve assets than BTC (assuming we would only look at reserve volatility). While I am very hesitant to rely on the limited data that we have so far, I believe the plot above as well as the estimates provided by @MarkusBerlin strongly suggest that this is the case.

But volatility and correlation measures alone are neither particularly reliable (given low data availability), nor sufficient to talk about stability because they do not adequately capture the risks associated with extreme events (crypto crashes etc) that @MarkusBerlin mentioned.

The more convincing argument from my perspective is the fact that MCO2 tokens do not only reflect overall demand for crypto tokens but also for CO2 credits. An increase in demand for CO2 credits should be reflected in MCO2 but shouldn’t affect BTC at all. Similarly, a crypto crash may drag down BTC and ETH but there would still be a use case for CO2 credits traded on a blockchain. This is from my perspective the key diversification argument for shifting part of the current BTC holdings away from pure-play crypto assets (and here towards MCO2).

2. Is there sufficient liquidity in the market that MCO2 holdings can be liquidated in case the reserve comes under pressure? (see discussion between @MarkusBerlin and @papa_raw)

That’s difficult to predict as it, for example, also depends on future demand for CO2 credits. The way I see it is that this “liquidity risk” needs to be weighed against the “diversification benefits” above and that overall there should still be a net benefit to the reserve.

In addition, I understand that a MCO2 token holder has in fact legal ownership over an underlying carbon certificate. This implies that even in an illiquid MCO2 token market, the non-tokenized carbon certificate would still have value on the broader carbon credit market. This would certainly be a last resort option but would nevertheless mitigate the “liquidity risk”.

3. Is the certification process behind MCO2 sufficiently rigorous so that MCO2 can qualify as a reserve asset? (see question by @Pinotio.com )

The proposal has more details on this but here is my understanding: all projects behind MCO2 tokens go through an extensive due-diligence process and are audited by third-party auditors before they receive their carbon credit attestation. The projects that we selected, in fact, underwent a second, additional certification process to ensure additional environmental and development benefits.

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Thanks @Slobodan .

Re Q3, MCO2 does not seem to be priced like a carbon credit. It seems to trade more like a random crypto token than a CO2 credit.

That is my biggest concern with adding MCO2 to the reserve.

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Jumping a bit late to this discussion. From my point of view, as just a regular CELO holder, this proposal doesn’t really make much sense to me.

I am having hard time understanding what is the purpose for MCO2 to be a reserve asset:

  • It doesn’t have much liquidity
  • Even for its small liquidity that it has overall, it doesn’t have good or efficient cross-chain arbitrage, so prices on different chains can be multiple %-age points different if not more.
  • It doesn’t seem to track any real world prices (assuming because there is no easy way to arbitrage MCO2 with other carbon offset instruments). It seems to behave as more or less like a random crypto token.

I have hard time seeing the benefits of adding such a token as a reserve asset. I think if at least the issue of efficient cross-chain/cross-market arbitrage would be resolved, then it might be more sensible even if it has small amount of overall on-chain liquidity. But without that this seems like a super random move for no real benefit of CELO holders or the reserve.

I plan on voting NO for the proposal in its current form.

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I love the idea of some natural backed token in the reserve. However as i understand it carbon credits like what MCO2 represents are supposed to be short lived and expire. since MC02 doesnt do this it seems to act less like a carbon credit token. And if it did expire / was burnt then a portion of the reserve would vanish which does not seem good for collateralization levels.

right?

something like Our Tokens | Ekofolio I believe would be more of a natural backed token.

if anything MCO2 could be a good onchain alternative to WREN.

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Hi Celo community,

Addressing here some of the questions that were raised on the chat.

1 MCO2 are fully backed by real VCUS as can see on the agreed procedures report from Armanino.

2 MCO2 and cMCO2 are fully interchangeable via https://brigde.moss.earth, the first bridge created between celo and ethereum.

2 MCO2 and cMCO2 are fully interchangeable via https://brigde.moss.earth, the first bridge created between celo and ethereum

3 MCO2 carbon credits are the first version of tokenized carbon credits, and the liquidity and the awareness about this kind of asset token is yet being constructed. Nevertheless, you can see the total liquidity on Moss Carbon Credit price today, MCO2 live marketcap, chart, and info | CoinMarketCap
and Moss Carbon Credit (MCO2) valor, cotação, gráfico e preço hoje | CoinGecko.

4 Voluntary carbon credits last forever, they don’t expire, so tokens on the reserve would not be burned.

Regards,

Hello all,

The pricing question is a good one. In the voluntary carbon market, the prices of carbon offsets are very hard to pinpoint. It’s not like a typical commodity market where everyone in the world knows the exact price of oil. Voluntary carbon markets vary greatly depending on a number of factors, including the project type, who the buyer is and the vintage. Some buyers are willing to pay a lot more for certain kinds of projects, particularly in their sectors (eg: a transport company interested in buying offsets from transport-related projects). And some projects have unique characteristics (additional co-benefits, for example) that raise the price of those credits. Some companies are willing to pay very high prices if the project helps catalyze new technologies. So the pricing is really all over the map, but that said, $5-$6 is in the range for a large number of projects of this type.

Current retail prices on main sites in USD per ton:

Atmosfair 28 usd
Offsetra 20 usd
Project wren 18 usd
Carbon credit capital 14 usd

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