Klima DAO is a decentralized autonomous organization (DAO) and Real World Asset (RWA) protocol dedicated to driving climate action. By leveraging a carbon-backed, algorithmic currency called the KLIMA token, Klima DAO aims to increase the price of carbon assets and incentivize significant emissions reductions.
Objectives
Klima DAO’s primary goals are:
- To lock away carbon credits in its treasury, creating a supply squeeze to drive up prices.
- To align economic incentives with climate action, making it profitable for users to contribute to emissions reduction.
How It Works
Klima DAO operates by using carbon credits from the Voluntary Carbon Market (VCM), where each credit represents the reduction or removal of one metric ton of CO2 from the atmosphere. The KLIMA token is backed by one Base Carbon Tonne (BCT) token, equivalent to one tonne of carbon emissions reduced or removed.
The Toucan Protocol facilitates this by bringing carbon credits on-chain, converting them into BatchNFTs, and then into fungible TCO2 tokens. These tokens are deposited into carbon pools to create BCT tokens, which back the KLIMA token.
Participation
Users can get involved by purchasing BCT or KLIMA tokens on SushiSwap on the Polygon network. Additionally, users can obtain discounted KLIMA tokens through a bonding mechanism by depositing BCT or liquidity pool tokens into the treasury. Staking KLIMA tokens offers high returns, with an annual percentage yield (APY) of around 37,000%.
Climate Impact
By hoarding carbon credits and driving up their price, Klima DAO aims to pressure polluters to cut emissions. Higher carbon credit prices also channel funds towards genuine sustainability projects. This model aligns climate action with economic benefits, making it profitable for users to lock away carbon and earn returns.
Challenges and Success Factors
Key challenges include ensuring the credibility and transparency of carbon credits, achieving mass adoption of the KLIMA token, diversifying into high-quality carbon credit pools, and scaling to include the compliance market.
Conclusion
Klima DAO represents an innovative approach to combining DeFi and climate action. By creating a regenerative economic system that benefits both users and the environment, Klima DAO has the potential to drive significant positive change. Its success could pave the way for a new financial model that prioritizes sustainability and climate resilience.
Website and Social Media
Website: https://klimadao.finance/
Social Media: https://twitter.com/KlimaDAO
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