The Climate Collective Treasury [v2]

We’d like to announce a “V2” update to the Climate Collective Treasury proposal as a CGP for the Celo community. This proposal takes into account feedback from our initial proposal summarized here:

  • Amount of funds requested: though the on-chain governance fund contains >10M CELO, there is ~6.7M CELO unallocated per comments from @Tobi referencing this forum thread. The revised amount is 4.7M CELO detailed in the proposal.
  • Use of funds towards liquidity: we have restructured the ask here and want to be clear that it will not be used towards incentives, but rather to help the Climate Collective team source liquidity from larger institutions and backstop investors. We are also working with DEXs, DeFi for the People, and other groups to source the required liquidity and incentives.
  • Focus on Natural Capital: as suggested by @Pinotio.com we have trimmed down “nice to haves” of supporting NFTs, Digital Cash Operations, and Carbon-Grants in order to focus on Natural Capital Tokens and ReFi Products that help add new assets to the Celo Reserve and position Celo as the home of ReFi, with the urgency expressed in his latest comments.
  • Diversity/Decentralization of Multisig: the initial proposal had a majority of web3-native members with direct associations with Climate Collective, cLabs, and the Celo Foundation. We have reworked this to include members from other areas and projects including Loam, Roda, and SimplexDNA. These new members add deep expertise with ecosystem sciences and experience with on-the-ground projects that create a more holistic and well-rounded advisory team. This has been our main focus since v1 was published that we believe has been time well spent.
  • Correlation with stablecoins: as @MilaRioja pointed “the more stables in circulation, the higher the need to have REFI projects composing Celo reserve”. Our focus will be on onboarding more Natural Capital in the Celo Reserve so that other groups’ work on increasing stablecoin adoption leads to increased regenerative activity and broader success for Celo.
  • Naming: Use of the word “Treasury” is fine.

We are excited to have this revised proposal published on Earth Day & Celo’s 2nd anniversary, and welcome feedback on the CGP here.


Table of Contents:

  • Overview
    • Objective
    • Proposal Overview
  • Areas of Focus
    • Natural Capital Tokens
    • ReFi Products
  • Structure
    • Climate Collective Members
    • Multisig
    • Budget
    • Compensation
    • Verification
  • Context
    • Marketing Challenges
    • Known Constraints
    • Proposal Risks
  • Appendix

Overview

Objective

The key objective of this proposal is to rapidly position Celo at the forefront of the Regenerative Finance (”ReFi”) movement. To this end the Climate Collective Treasury will galvanize activity around development of climate-related web3 initiatives, particularly around tokenized natural capital that can be onboarded to the Celo Reserve.

Proposal Overview

The primary purpose for funding the Climate Collective Treasury is to support projects utilizing web3 to combat climate change through grant funding for project development and Celo integration. The proposed areas of focus broadly map to initiatives from the Collective’s founding members (outlined in Structure section). The Climate Collective Treasury will be considered a success if it positions Celo as the go-to climate-positive blockchain and ecosystem in the near future.

Areas of Focus

There are two key areas this effort will focus on (see Appendix for more information on current targets and strategic partners).

Natural Capital Tokens (natcap)

Definition: Semi-fungible ERC20 tokens that represent either:

(1) An outputs-based financing of an ecosystem service such as a carbon offset
(2) Ownership of territory or other ecosystem assets
(3) Stewardship of an ecosystem producing valuable ecosystem services (e.g. token payments for ecosystem services such as biodiversity).

Mission: To systematically increase the liquidity of existing natcap tokens on Celo, and support the development of new climate-positive tokenized assets

Context: Through CGP30 Celo successfully onboarded a 0.5% target allocation for MCO2 tokens to the Reserve in late July ‘21, and founded the Climate Collective in early October ‘21 to achieve the target of 40% nature-backed assets in 4 years. After the launch of Toucan Protocol and KlimaDAO in mid October ‘21, the majority of on-chain natural capital has gravitated to the Polygon network (including MCO2 since KIP7 in mid January ‘22), with a healthy distribution between the Klima reserves and DEX liquidity pools.

In order to codify standards for natural capital in the Celo reserve, Celo must increase the liquidity and diversity of natcaps on its own chain by either bridging or natively supporting projects who produce natcaps. The following table is a snapshot of the Climate Collective’s Green Token Dashboard prototype as of 3/7/22 — an early attempt to articulate a methodology for natcap “certification” that adheres to strict, pre-defined standards about what does or does not qualify as a natcap:

Name Symbol / Chains Supply / Market Cap Liquidity Reserves
Toucan Base Carbon Tonne BCT / Polygon Supply 18,260,576 / $52,225,249 Sushiswap holds 6M in USDC pool + 1.37M in KLIMA pool + others = 7.37M BCT ~ 33% Klima holds 9,154,847 BCT = $34,650,680 = 51%
Toucan: Nature Carbon Tonne NCT / Polygon Supply 1,191,322 / $7,660,200 Sushiswap USDC pool 924,100 = 77.5% N/A
Moss.Earth: Carbon Credit MCO2 / Ethereum, Polygon, Celo 3,185,540 / $32,239,317 Ethereum: 2,845,084 (92%); Polygon: 251,870 (5%); Celo : 88,586 (3%) Uniswap ETH + USDC = 1,737 (0.06% onchain); Quickswap USDC = 50,364 (33% onchain); Ubeswap mcUSD + others = 2,093 (3% onchain) No ETH reserve; Klima holds 165,654 MCO2 = 65% onchain supply; Celo holds 83,333.67 MCO2 = $1,186,475 = 94% onchain supply

Target Outcomes

By 6 months from now:

  • Collaboratively define quantitative standards for reserve assets including legal due diligence, financial measures (liquidity sources, transaction volume, historical prices, available trading pairs, etc.), ESG criteria, and availability on Celo
  • Complete Balancer v2 contract migration in partnership with Symmetric and port the Gnosis Safe and key Safe applications to Celo, opening up the possibility for a Carbon or ReFi index on Celo, ReFi DAOs on Celo, and supporting composable DAO tooling (e.g. Zodiac, a Safe app that enables cross-chain DAO formation).
  • Launch & publicize Toucan Carbon Reference Pools on Celo during Q2, as well as other carbon assets.
  • Develop cohesive strategy around existing and imminent natural capital assets including Moss (MCO2, NFTs), Toucan (BCT, NCT), FlowCarbon (GNT), and Untangled Finance (SOT)
  • Establish Carbon SubDAO and LP-Index to curate natural capital asset holdings, for future use in the Celo Reserve through separate governance proposal
  • Leverage above LP-index to broker token sales with institutions and other backstop investors to create deep liquidity supporting natcap launches. Provide up to 1M CELO (~$2M) in initial anchor liquidity for the purpose of minimizing slippage until pool is of a sufficient size and LP diversity is achieved, after which pool tokens may be recalled and repurposed for grant issuance

By 10 months from now:

  • Support new use cases including plastic credits, forward financing, land ownership, regenerative community currencies, and DNA sampling-based biodiversity credits
  • Submit proposal to Celo Governance to onboard a Carbon SubDAO-governed LP-index of natcap tokens
  • Support projects in implementing geospatial web3 primitives, such as Astral Protocol’s upcoming GeoNFT, for the purposes of tokenizing land ownership, data-production, stewardship, or augmented space
  • Experiment with Internet of Things (IoT) sensor integrations and other environmental monitoring, reporting, verification (MRV) applications.

ReFi Products

Mission: To use constructs from Decentralized Finance to help frame the regenerative economy

Target Outcomes

By 6 months from now:

  • Develop and maintain “ReFi Pulse” with financial measures and ESG indicators, similar to DeFi Pulse for regenerative assets in partnership with Prime Ratings
  • Facilitate certification of Celo blockchain as carbon-negative from accredited institution
  • Develop and maintain Celo Energy Consumption Report to help projects explain Celo adoption to their users and/or community
  • Support social tokens linked to regenerative activities and impact communities through ecosystem fund with Socialstack
  • Support select regenerative NFT projects using existing tooling from Tatum on Celo
  • Establish ReFiDAO platform and associated initiatives positioning Celo at the center of ReFi
  • Issue a quadratic funding round on Celo for ReFi projects across web3, using a quadratic funding primitive such as Clr.Fund
  • Help bootstrap natural capital related DAOs with ecosystem partner PrimeDAO and participate in governance

By 12 months from now:

  • Experiment with new token issuance models that are related to climate or ecological data, combining several Climate Collective members’ composable protocols to create an end-to-end solution combining MRV, Oracles, Geographical demurrage, and remittances to mobile wallets (such as an airdrop that can be claimed by persons experiencing serious heat stress) to prove the concept of a “ReFi Stack”.

Structure

Climate Collective Members

The Collective’s 13 founding members have demonstrated commitment to our mission and successfully delivered relevant work on Celo. Grant recipients from the Treasury would be admitted to the Collective after meeting these membership conditions through a publicized induction ceremony. All members are expected to join a lazy committee to support governance processes such as curation of CLR Quadratic Funding rounds, elections of Carbon SubDAO, participation in virtual events, and involvement in future products, events, and initiatives.

Table: Climate Collective current members in alphabetical order

# Name Representative
1 Allegory Ed Walters
2 Astral Protocol Holly Grimm
3 Byterocket Marvin Kruse
4 Celo Xochitl Cazador
5 cLabs Slobodan Sudaric
6 Curve Labs Patrick Rawson
7 Flori Maria Alegre
8 Flow Carbon Dana Gibber
9 Kolektivo Labs Luuk Weber
10 Loam Birju Shah
11 Moss Luis Adaime
12 Regen Network Gregory Landua
13 Toucan Protocol Raphael Haupt
14 Wren Landon Brand

Multisig

The Multisig contract address is 0x275D5828bF7e5aaf51Bf8EF2f0668ac4a98F0d23 and can be found here

# Name Affiliation Address
1 Nirvaan Ranganathan Climate Collective 0x42B4a02f79438D558AB33E326638ed752b94D187
2 Craig Wilson Climate Collective 0x52b485860cB58d1f283D23985002fE1B9CC8311E
3 Slobodan Sudaric cLabs 0x19c280d792429243007c91041c56bA5344726341
4 Luuk Weber Kolektivo 0x0261842bdDB13418fAe2B7567fc340bAa585b950
5 Renc Korzay Regenerative Finance Foundation 0x23d817fA0F3C9F77e45880dBE99eDDfafB59142c
6 Kianga Daverton AcreDAO 0x5b9C98e8A3D9Db6cd4B4B4C1F92D0A551D06F00D
7 Maria Li Steward 0x3a5e88f79af1d863001d1abeb92418b1403f2cfa
8 Ale Borda Gitcoin, Fifty Years 0x82c4d6f212F30701234aDbFfbB5ed8D65B06910C
9 Birju Shah Loam 0x671367581a1038f3d1edda106097c945e5a16231
10 Tom Walker SimplexDNA 0x09d2abefa41fe1a5f15eeac62dbc3af977c54eab

Budget

This CGP is requesting 4.7 Million CELO from the on-chain governance Community Fund, which will be distributed as indicated below. Based on grantee requests, some of the CELO tokens may be collateralized in the Celo Reserve to mint and disburse cUSD. Temporary liquidity will be recalled when the conditions outlined above are met, then redistributed towards the other budgeted areas.

Area Allocation (MM CELO) Approx MM USD (Celo ~ $2)
Project Development 2.3 4.6
Community Building 0.5 1
Operations 0.12 0.24
Marketing 0.78 1.56
Temporary Liquidity 1 2
Total 4.7 9.4

Compensation

Using past proposals’ as a benchmark, we propose for the equivalent of $100/hr payable to senior advisors in cUSD within an expectation of at least 10 hrs/week, be paid as compensation for the administrative operations of the Climate Collective Treasury. This compensation will be reserved for multisig members who are not directly affiliated with Climate Collective, the Celo Foundation, or cLabs. The Climate Collective team works full-time on sourcing, scoping, and administering the grants with support from the multisig members to align on grant outcomes and efficacy towards progressing the stated goals. Any unused funds will be used towards grants.

Verification

[
  {
    "contract": "GoldToken",
    "function": "approve",
    "args": [
      "0xc8cBB71E25caF708Bcf55564b7ed7aA692de25c1",
      "4700000000000000000000000"
    ],
    "value": "0"
  }
]

Context

Marketing Challenges

To many followers of both industries, “crypto & climate” seems like an oxymoron or contradiction primarily due to the negative coverage around Bitcoin and Proof-of-Work. Changing this impression is crucial to community development and adoption of Web3-based ReFi products. The Celo community briefly experienced such social media backlash following the announcement of the Kickstarter integration.

The Climate Collective will provide resources that help projects explain their decisions to leverage web3 tools towards climate action, with a focus on highlighting Celo’s carbon-negative status, mobile-first sustainable architecture, and other unique features.

Known Constraints

Based on conversations with prospective Climate Collective grant recipients and Celo ecosystem members, we have identified several “primitives” and integrations currently absent on Celo but not directly linked to climate.

  • Treasury Management using Gnosis manager applications
  • Cross-chain DEX integrations beyond SushiSwap
  • Token-gating integration for Discord to foster productive DAO communities
  • Analytics platforms such as Dune Analytics for live blockchain statistics
  • Integrations with Centrifuge, Goldfinch, and other existing protocols tokenizing Real World Assets

Proposal Risks

We have identified the following risks:

  • Technical risk based on missing primitives: as outlined above, there are currently several “functional primitives” or technical building blocks missing from Celo that may deter certain projects or founders from building on Celo
  • Competitive risk: certain other blockchain foundations are offering higher value grants
  • Performance risk based on where the Treasury is allocating capital: this is mitigated by three checkpoints to gain feedback from community members
  • Legal risk: tokenizing land or other ecosystem assets requires substantial buy-in from current institutions and legal systems.
  • Conflict of Interest Risks: In the case of a conflict of interest with one of the multisig signer, the COI will be disclosed and the multisig signer will not participate in voting on that specific proposal. Members have been deliberately chosen to minimize potential conflicts of interests with cross-functional members of the ecosystem. For instance, a representative from SimplexDNA would be recused from grant-making decisions related to the project.

Appendix

Natural Capital Tokens

  • Current Targets: SimplexDNA, Sanergy, Senken, SolidWorld, Thallo, Silvi, Mad Agriculture, Droneseed, Carbon Path, EdenDAO, Kolor
  • Strategic Partners: Moss, Toucan, FlowCarbon, Kolektivo, Astral Protocol, Curve Labs, cLabs, Symmetric

ReFi Products

  • Current Targets: Athena Protocol, Offsetra, Raiz Vertical Farms, Supermetahumanfutures, Steward, DeTrash DAO, Acre DAO, Climate DAO, Thought for Food
  • Strategic Partners: cLabs, PrimeDAO, ReFiDAO, CLR.Fund, Ubeswap, PoolTogether, GoodGhosting, Socialstack
4 Likes

Thanks @nirvaan , my initial reaction:

Putting in the work
You’re clearly putting in a lot of work on this, and you’re taking into account feedback. I think we as a community should support people/groups like this because we urgently need to move Celo forward, and we need to show that we support people/groups that get things done.

BTW, this data shared is also very helpful.

A target for reserve capital
I suggest we aim to get at least 20% of the CELO reserve into natural backed capital by end of 2022. This doesn’t have to be a hard goal, but I think it’s good to aim because it gives a simple metric providing clarity on progress.

How important is it for us - as a community - that ReFi assets be native to CELO?

  • On the one hand, if they become native on Ethereum/Polygon, have we failed in our mission? Is it already too late for CELO to be the native chain for ReFi?
  • On the other hand, maybe our unique offering is cStables backed back natural capital.

Either way, bridged assets are problematic from a reserve safety standpoint. I’ll be posting specifically with ideas on broad (not just ReFi) reserve decentralisation next week.

This won’t work with 10 hrs/wk
This is a huge project. I suggest taking away the 10 hrs/wk cap. In fact, it seems essential there are people full time on this if it is to succeed. I’m hesitant to support without people spending a lot of time on it - it’s just too critical for CELO.

Too many groups involved?
Ok, I’m open to supporting the proposal as is, so I put this out as a loose idea:

  • Are there too many groups involved? Usually when I see this it means that none of them really have a strong interest, they’re just loose affiliates.
  • Would it be better to split this into two separate independent climate efforts, each with more skin in the game?
    Overall, the workload and detail seems huge in this proposal.

All I want to see (my personal view) is if we had even just 2 really solid ReFi assets that made up 10% of the reserve each. Whatever is the simplest way to do that we should do it. No messing around.

As mentioned above, other blockchains have more funds to spend on this. So we won’t differentiate ourselves by being comprehensive. I think we can only differentiate by being very focused and executing well and quickly.

Overall Level of Funds Spending
When I talk to the community about CELO, a lot of the reason people got involved is because of climate/ReFi. So, we should be differentiated on this and it makes sense to spend a large portion of the on-chain fund on it. Looking at 10M CELO total, it seems reasonable to spend half of ReFi. I would probably prefer to have that split into more than one group - for redundancy - but if we only have one group of motivated people, then we shouldn’t be picky.

As a side note, my current view is that we should be using a big portion of the remainder of funds to support cStable launches in specific regions. Possibly a LatAm fund (run in spanish and/or portuguese) and possible another regional fund (India would make sense to me, but the regulatory issues scare me). Obviously some portion of overall funds needs to go to other things as well - e.g. Celo Community Fund 2, and there’s some work I think we should do on decentralising reserve management that I’ll write on soon.

5 Likes

Thanks @Pinotio.com for the prompt feedback! We deeply appreciate your support and enthusiasm on this effort. To your points:

  • Targeting 20%: I would be interested in the community feedback as well as the cLabs/Reserve team here (@Slobodan, @MarkusBerlin thoughts?). It’s ambitious given we cannot jeopardize the ability of Mento to peg stablecoins, but I certainly agree setting this target can help create a “self fulfilling prophecy”/a concrete target for the Reserve which is ultimately our end goal. I think a risk model similar to MakerDAO (as you referenced in your previous comments) would be helpful here, but also think we need to ensure we don’t repeat mistakes from existing protocols and broaden our holdings beyond carbon assets.
  • Assets native to Celo: agreed that bridged assets are potentially problematic and don’t quite help us position Celo as the home of ReFi. IMO it’s not too late as the main existing players with live tokens are Moss, Toucan, and Flow all of whom are/will be on Celo by Q3. Our goal with this proposal is to help new assets launch natively on Celo, then potentially bridge to other chains. I will echo you and @MilaRioja that cStables play a big role here to scale up % and absolute amount of natcap in the Reserve, and look forward to reviewing your post next week.
  • 10hours: I phrased this badly - the Climate Collective team works full-time on sourcing, scoping, and administering grants (which I’ve updated in the proposal above). The multisig members, particularly the recently-added senior advisors, will be less hands-on and help advise the disbursements at a higher level using summaries from our management team.
  • Too many groups: we have been deliberate with including members particularly from Curve Labs and Kolektivo who are actively pushing the boundaries of natural capital, they certainly have a deep and demonstrated interest in natural capital along with relatively newer groups from Loam, SimplexDNA, and Roda. How would you envision this as two separate efforts? I do agree that our main value proposition is not wanton capital but rather SMEs and seasoned builders who can reliably bring natcap projects to fruition.
  • Levels of spending: would appreciate community feedback here, we are being cognizant of the unallocated funds (~6.7M Celo) to leave enough CELO to support complementary efforts.

Again thanks for the swift and constructive feedback, looking forward to your next posts and responses from friends in the ecosystem.

2 Likes

I always love how thoughtful your inputs are @Pinotio.com

Some thoughts:

Small note here: Curve Labs is developing Toucan on Celo. Our first sprint is a bridge using Optics, and is very practically oriented towards getting natCap liquidity going on Celo ASAP; the second sprint is a more tactical full protocol deployment, which means that you’ll be able to mint Toucan carbon reference assets natively on Celo. I cannot speak to the architecture or development efforts of other ReFi tokens currently.

I’m going to cut myself down a bit and quickly note that native protocol deployment does not help with overall security, as there is still the bridging mechanism, i.e. a failure of the token on Polygon would still be an issue and vice versa for Polygon should a token fail on Celo (and something that we are aiming to mitigate in our work currently, but this requires further R&D).

I want to testify that around 3/4ths of the Collective’s current 14 members are “more” than loose affiliates and are in regular sync and have been for the past four months. Convos are in general deepening and becoming more “real” post Celo Connect where everyone had a chance to jam IRL. You’re right in that there are a few more affiliate-y folks in the membership list that are being pulled in to discussions on an ad hoc basis, but in general, this is a functioning “proto-DAO” of sorts that will be able to establish common standards and make collective progress towards making Celo the “ReFi chain” rich with natCaps.

Final thought: I would push back on this and say that there’s a lot of evaluation that needs to be done to determine whether a collateral is healthy or not. While 20% is a good stretch goal at the end of the day risk trumps all and any KPI here should not be pursued eschewing risk.

7 Likes

Thanks @nirvaan and @papa_raw .

Just on the funding amount, good to get more community input.

I think denominating in cUSD (with a max CELO cap) certainly would be beneficial (as it means the community can issue more grants if CELO price rises, which it should if we execute well on these initiatives).

4 Likes

Thanks @Pinotio.com for the suggestion of denominating the amounts in cUSD - given the amount currently unallocated on-chain I’m not sure how much more we could request, @Tobi perhaps you have thoughts on this? Hopefully others in the community chime in for feedback on the proposal and the amounts.

1 Like

Don’t have further thoughts - I’d personally vote yes and think the funding amount is fine for such an important part of Celo’s mission. The community fund is growing at ~5 million CELO per year if I remember correctly, so it’s also refilled at a fairly high rate

1 Like

Thank you for the chance to chime in here.

  • As a community member, I take issue with dedicated community funds toward any kind of marketing budget. All of the “marketing” that, for example, Ocelot has seen, as well as the vast majority of what I personally observe coming from successful DAO spaces/protocol treasuries, is organic. Even more, the community building piece of the budget here should more than cover it, even with the challenges described regarding “crypto + climate”. As further insight and food-for-thought, I can shed some light with another anecdotal data point: I contribute to a working group for she256’s governance delegations where we discuss various projects’ governance proposals. It recently came up (unprompted) that with certain proposals folks raised concern for having felt a tendency toward greenwashing, and are acutely aware of & sensitive to when it’s occurring. Excess marketing, especially paid spend, will almost certainly do this and hence this is more of why organic should be the default approach.

  • Regarding budget, 1M CELO (and/or equivalent in cUSD) in “temporary liquidity” seems very unnecessary to me. This doesn’t seem like it needs to be in here and seems to indicate an unnecessarily larger ask just to include more buffer. Could someone please explain if I’m missing something crucial?

  • Regarding constraints,

  1. In fact a member of the Ocelot multisig currently does immense work on tokenomics design as a veteran contributor for Centrifuge (seeing as it’s mentioned here in the proposal). As this constraint for ‘real-world’ assets is more closely related to the intended purpose of the climate treasury proposal, we’d be more than happy to facilitate a potential collaboration if mutually desired.

  2. It is already possible to token-gate a Discord server with Celo-based tokens. I’d be more than happy to walk folks through how to do so.

I do have to confess that overall, and observing from the outside, this proposal leaves you with the feeling of insiders just getting more inside. While I respect the Climate Collective, its goals, and individual members as people, the Celo Foundation created/drove/sponsored this effort, and the Celo Foundation already has a vast endowment of the current total CELO in circulation. There is more than enough that can be pledged in commitment — perhaps in reallocating funds from “defi-to-refi” for the people, assuming there are still funds left from the $100million commitment (transparently whether there are or not we as a community would not know, as it currently stands). This feels like the Celo Foundation seeks to take approaches such as this for efforts to have more “community legitimacy” and not seem like it’s all just coming out the same pocket — but the irony is that it could, so why should the community even further subsidize it?

If the answer is that “the reserve just needs more natural-capital-backed assets”, then in my view this proposal should be laser focused on simply that — and involve a dedicated, diverse team of independent folks to do so.

The template should be prioritizing multisig signers who are non-Celo/cLabs/Foundation employees or grantees or insiders.

Lastly I need to draw attention to what I, and many others within the community, consider an extremely important point:

I do not want to speculate on identities of the members of this multisig — so just simply based on a quick search, you can see that virtually all members on this multisig are masc-presenting individuals.

Women and people of color — especially femme-presenting POC — should be the template, and Ocelot is a prime example of this. For comparison, the Ocelot multisig is comprised of 82% women + queer/trans + non-binary folks.

I would encourage all proposers here to introspect on their own biases, and ask themselves tough questions about why this multisig group was OK enough to them to even make it to this stage, now formally proposed on this forum in writing in two whole versions. I do not say this to sound alarmist, and please do not misread my tone, but this is a huge red flag in my book.

Appreciate all of the work that can address this feedback in earnest.

Hi @gabrielllemic

I disagree with your approach to inclusion on the forum, on a few fronts.

  • I think sometimes we can have diversity within groups, and sometimes we can have diversity of groups. Diversity and inclusion comes in many forms and I think we should welcome groups to bring many forms to the table. It’s good to have people like you asking questions on inclusion, but I caution against us as a community being too prescriptive. There are many perspectives globally on what inclusion means, and we are a global community.
  • For example, your comments address race and gender, which are important. One might separately raise the point that most of our multisigs in the community are heavily english speaking and US/Europe-centric. Your criticism is strong. Maybe it is fair or maybe not, but it is important to consider that we all can be judged for omissions in our approach. There are many axes to inclusion. For me personally, I have been encouraging proposals and multi-sigs to have more multi-language and global coverage for members. I think this is critical to Celo’s global mission. I’m sure others would like to see other forms of inclusion.
  • I think your specific remarks to Pat Rawson on the Ocelot forum post show a lack of respect for him as an individual. Even if you think his remarks on the forum were unfair or aggressive or had underlying bias, I don’t support criticism of people based on their skin colour, gender or sexual preferences.
2 Likes

First, I’d like to say that I greatly appreciate all of the feedback on v2 of the proposal - both positive and critical. It’s these iterative processes that make web3 so dynamic and robust. Full disclosure, I come to web3 from a climate background, so as I have come up to speed quickly, I fully acknowledge that I have gaps and look to this community to help fill them and educate me.

I’ll address a few of the concerns here and hopefully, this will provide context and better understanding.

Liquidity: In the time that we have been working with our partners, the Climate Collective has seen a need for liquidity as new climate-backed tokens from our grantees and members launch. The entirety of this proposal is allocated for grants, but given a need for immediate liquidity, we see it as beneficial to our grantees and partners to help also provide them with liquidity from as-of-yet unused grant funds.

Representation: Both @gabrielllemic & @Pinotio.com are correct. Representation is incredibly important, and that representation should be geographically, socioeconomically, racially, and gender-diverse. All we can do here is acknowledge those points, accept responsibility, and try to continue to do better. Our first proposal did not have multi-sig feedback that addressed this particular issue, so we are grateful to receive it and plan to act on it. Our aim was to fill the multi-sig with people that represented expertise in various areas of our intersection of web3 and climate - agriculture, finance, biodiversity, carbon - and try to expand & decentralize it away from Climate Collective team directly.

Marketing: All dollars in this proposal are going to grants, and the breakdown is an estimate of what grantees will be spending that money on. We anticipate that there will be marketing dollars spent to drive the adoption of these projects.

Climate Collective: It should be noted that the Climate Collective is a wholly separate entity from cLabs and the Celo Foundation. While we work closely with them and are always grateful for their support and guidance, the goal of the Collective is to be an independent organization that makes decisions based on the input of its members, not the Celo Foundation.

Appreciate all this good faith feedback. It is making us better and our proposal stronger.

4 Likes

This could be a good org to reach out to regarding graphic/cultural representation https://www.refibysouth.com/

1 Like

Targeting 20%: I would be interested in the community feedback as well as the cLabs/Reserve team here (@Slobodan, @MarkusBerlin thoughts?). It’s ambitious given we cannot jeopardize the ability of Mento to peg stablecoins, but I certainly agree setting this target can help create a “self fulfilling prophecy”/a concrete target for the Reserve which is ultimately our end goal. I think a risk model similar to MakerDAO (as you referenced in your previous comments) would be helpful here, but also think we need to ensure we don’t repeat mistakes from existing protocols and broaden our holdings beyond carbon assets.

Thanks @Pinotio.com for your thoughtful input. I would say it depends on what exactly we mean by targeting 20%. If we are talking about signalling that we would like to have 20% by EOY, yes, and I think that’s in line with what Climate Collective is trying to achieve (through the 40% in 4 years target).

If we are talking about actually achieving 20%, i.e. moving 100M USD into Natcaps by EOY, I am with @papa_raw on this one. From my perspective, careful assessment of reserve assets is key. This includes risk aspects (liquidity, security, legal etc.) but also impact aspects (how does the asset actually contribute towards the preservation and restoration of natural capital). I am not saying that 20% is impossible but we will simply have to go step by step and think carefully about upcoming CGPs to increase the target allocation towards natcaps.

I would also like to reiterate in this context that the proposal goes beyond bringing natcaps into the Celo Reserve. There can of course also be brilliant ReFi projects on Celo that have nothing to do with the Reserve. So I think from the Celo ecosystem perspective, the natcap allocation of the Reserve should be one metric to track but not “the” metric.

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I want to share my overall support and excitement for this proposal and make a small point related to the diversity point.

In my six years of working in the Web 3.0 space, the Celo ecosystem and Climate Collective, in particular, is the most diverse group I’ve been able to operate in.

I’m glad we’re taking diversity seriously while improving the world; this is why I build on Celo!

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Hi folks, @Slobodan kindly shared some time with me today to discuss ReFi.

This touches also on questions from @markbarendt on the Reserve Decentralisation thread and also @John.Fletcher on the thread about adding more stables to the reserve.

Summary
I know there is a lot more in the proposal above, and I am both omitting a lot of good ideas and a lot is over my head until I learn more. Still, these few points above helped to ground me a bit on what makes big picture sense for what we’re doing.

These notes aren’t comprehensive but hopefully add some colour from a ReFi-outsider perspective.

What kinds of natural capital are we looking at?

Short term, voluntary carbon credits like Flow GNT and Toucan NCT are being considered.

  • Both would be native tokens on Celo (avoiding bridging risks). I’m actually not sure now if cMCO2 is native or bridged, but it’s what we have in the reserve today and it’s also a voluntary credit token.
  • Voluntary credits are much less liquid than mandatory credits (like in the EU and California) and trade at a much lower price (see some charts here: Live Carbon Prices Today, Carbon Price Charts • Carbon Credits). However, they are much more easily tokenizable as there are no regulations (by definition) or KYC.
  • It’s hard to know where price goes for these voluntary tokens (probably true as well for mandatory credits, although there is a regulatory driven demand for those). Of course it’s hard to know where Bitcoin and Eth prices will go as well. All in all, carbon credits, and specifically voluntary credits would be a (perhaps ideally small) portion of total natural capital reserves.
  • On a rather specific note, it’s important that Celo buy tokens in a revolving fund of credits, one in which market participants are regularly burning tokens (which allows the oldest tokens in the pool to be minted). The specific risk here is that the reserve gets stuck holding very old credits (which will tend to trade at increasing discounts to newly issued credits).

Longer term, there is one option that is clear to me so far, which I (my description only) view as ReFi impact bonds - basically tokenized loans that go to ReFi projects.

  • A company called Real World Assets (working with Maker) had analysed in detail how to structure these products for a DAO. It seems piggy backing on this, and having companies like RWA tokenize (tradable) bonds for the Celo reserve is a good option.
  • These loans/bonds would be fiat denominated and also yield bearing. From a reserve stability standpoint, this is good because that would provide correlation with cStables.
  • One of @sep 's five principles of money for Celo is to avoid debt. However, Sep has also mentioned that features of Celo don’t have to meet all five principles, they can meet one or some. Here, it’s the natural capital backing that would be met.
  • In principle, I would imagine a company like RWA could also tokenize the equity of ReFi initiatives, if we really wanted to avoid debt. My view is that some debt makes sense for stability reasons.
  • To be clear, this approach involves trusting RWA. There are a few approaches, but one is that RWA (or others) would propose certain groups of projects/initiatives to Celo governance. Over time, it would make sense for Celo to work with many companies like RWA for diversification.
  • A little bit as with voluntary carbon credits, there are strong aspects of impact type investing that are subjective and this can lead to gaming and adverse selection for buyers of debt/equity in these projects. This is obviously a significant risk.

Wildcard idea
I see a way to use perpetual futures (as FTX do for stocks and crypto tokens) to create synthetic versions of carbon credits (and perhaps other commodities, equities or bonds). For example, a perp could be created natively on Celo that tracks European trading credit (ETS credits). It might seem that not owning the underlying credit is out of line with the reserve’s mission, but - on further thought - I believe this is not the case. If there were an ETS perp trading on Celo, as the reserve buys it, the price would go up. This creates an arbitrage with real ETS credits and puts upwards pressure on the real ETS credits. So I believe there would be a real market impact. These products are not permitted in the US but there are lots of perps on FTX for non-US investors. I’ve done some outreach. Could be a bad idea, but could be worth a small pilot.

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Nice @Pinotio.com

Other options for tokenizing may include projects like Centrifuge (CFG) and Goldfinch (GFI), maybe Maple.

I’ve been poking around over in those parts a bit and my impression so far is that ‘anyone’ can propose projects to tokenize and even define the legal terms they prefer. They seem to use Dai mostly but I doubt that is an absolute necessity. Seems to me that cStables might be at least technically possible.

This idea might deserve it’s own thread.

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