A lot has been said about cryptocurrency and NFTs with regards to their impact on the environment. While most of us know that these talking points don’t tend to be fairly balanced, I think there is something we can proactively do to build the Doodles brand and positively impact the world.
As noted in this Doodlebank proposal to Make Doodles carbon neutral: “Carbon emission offsetting can be achieved in other more directly impactful ways such as paying for tree planting, conservation efforts as alternatives to simply purchasing carbon credits.”
Introducing KlimaDAO, an organization making green energy projects more profitable and sustainable while pollution becomes more financially demanding. In their own words:
Klima DAO is a collective of environmentalists, developers and entrepreneurs who aim to pool their knowledge and expertise to drive change in the carbon markets, today.
Klima DAO is building an open-source, transparent community that will leverage the power of Web3 to deliver immediate and measurable climate-positive impact.
Klima DAO is an evolving network coordinating the delivery of climate finance toward high-impact and validated sustainability projects which produce tangible environmental benefits.
For more information on Klima, you can read through their (excellent) docs here:
Alternatively if you prefer to listen / watch, a Klima core team member made this 18 minute presentation for the UN Innovation Network here: Blockchain & Climate Change - YouTube
Using funds from the Doodlebank, we will buy enough $KLIMA to offset our carbon footprint. Additionally, rather than simply buying the token, we will also stake with their protocol using their contract. Overtime, this will help incentivize more carbon credits being brought on-chain and Doodles having an outsized contribution to the carbon market.
Using the Doodles smart contract (
0x8a90cab2b38dba80c64b7734e58ee1db38b8992e) on Ariel.is, it is estimated that the Doodles smart contract has a footprint of 2259K kg of CO2 emissions. Using another tool, Carbon.fyi, it is estimated that the footprint is 412.9K kg of CO2 emissions:
For calculating the price ceiling, I will use the higher estimate of 2259K kg.
Carbon credits tend to be scaled to tons, meaning one carbon credit is equivalent to the reduction or displacement of 1K kg of CO2. Currently, each $KLIMA is backed by 5.95 BCT (base carbon tonne brought on-chain by the Toucan Protocol).
2259 tons / 5.95 = ~380 KLIMA tokens.
Each KLIMA token (as of 12/28/2021) costs $350 each. 380 tokens * $350 = $133,000 ~= 35 ETH.
Why do we care about being carbon neutral?
It has become clear that ‘business as usual’ is not sufficient for slowing the momentum of climate change. Using our treasury funds to become carbon neutral effectively raises the price of carbon, thereby making green energy projects (solar farms, planting trees, etc) more financially viable. Additionally, it would require companies that simply purchase carbon credits while operating as usual to pay a more fair price for those offsets and/or to adapt more environmentally friendly practices.
Why not just purchase the carbon credits directly?
While I think this would be an excellent alternative proposal, in my opinion it’s too passive. By buying up the base credits, we become carbon neutral but it doesn’t advance beyond that. If this proposal is preferred, I would much rather have the proposal be that the Doodles directly funds a green energy project (solar farm, planting trees, etc). However, certification of these projects and the carbon credit verification process is extremely time intensive (18+ months).
Additionally, with buying carbon credits, there’s no real exit strategy. We either sell our credits (and lose carbon neutrality) or we hold indefinitely. The ROI is purely in the form of positive brand influence which is difficult to measure.
Klima presents a novel solution to a global problem. In their words:
As the protocol grows, Klima DAO will solve the critical problems of the carbon markets:
Illiquidity: Carbon Credits come in many different varieties; carbon brokers and middlemen are used by buyers and sellers, fragmenting the total liquidity of the market.
Opacity: Trades occur often behind closed doors, allowing buyers to underbuy the market.
Inefficiency: buying and retiring carbon credits comes with friction and barriers, by utilizing the polygon ecosystem, it removes this friction for all users.
As noted in the previous question, Klima also provides an exit strategy while remaining carbon neutral. By staking through their protocol, the Doodles will compound their KLIMA over time. Eventually, this will allow Doodles to sell extra KLIMA while remaining carbon neutral AND gain positive brand influence.
I will caution this that I am not experienced with managing treasury funds. For the purpose of this proposal, I will defer to the Doodles team on the logistics but here is my understanding from a high-level.
Cost: 35 ETH.
- Bridge 35 ETH to Polygon chain (where KLIMA is currently supported due to low costs and energy impact of transactions on Polygon network).
- Using SushiSwap or other preferred exchange, swap ETH for USDC.
- Using SushiSwap (where the official USDC/KLIMA LP exists), convert ~133,000 USDC for 380 KLIMA tokens.
- Using KlimaDao dApp, stake 380 KLIMA tokens.
- Flex carbon neutrality.
I am always seeking to learn. Please provide your feedback so I can be challenged to present the best proposal possible. Some initial questions:
- What do you like about the proposal?
- What are some edge cases to consider?
- What concerns might you have?