Neutralize Doodles Carbon Footprint

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

Proposal

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.

Calculations

Determining impact:
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.

Determining cost:
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.

Total:
Each KLIMA token (as of 12/28/2021) costs $350 each. 380 tokens * $350 = $133,000 ~= 35 ETH.

FAQ

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.

Why Klima?
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.

Procedure

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.
Steps:

  1. Bridge 35 ETH to Polygon chain (where KLIMA is currently supported due to low costs and energy impact of transactions on Polygon network).
  2. Using SushiSwap or other preferred exchange, swap ETH for USDC.
  3. Using SushiSwap (where the official USDC/KLIMA LP exists), convert ~133,000 USDC for 380 KLIMA tokens.
  4. Using KlimaDao dApp, stake 380 KLIMA tokens.
  5. Flex carbon neutrality.

Final notes

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?

Thanks for taking the time to submit this proposal. I feel we have to answer two questions here:

  1. Do we want to be carbon neutral?
  2. How do we make it happen?

I need to dive deeper on KLIMA to have an opinion so I’ll give you my thoughts on it later.

Thanks for your feedback Jerjer,

  1. Do we want to be carbon neutral?

This is an excellent question which depends on all 5.4k Doodle holders. I am deeply passionate about supporting initiatives to help combat climate change but I am only 1 Doodle.
Is there a way we could poll the larger Doodle community before evaluating these paths?

  1. How do we make it happen?

The way I see it, there are two main paths: (1) fund an environmental project or (2) essentially fund the project(s) impact / completion.

Per path (1): As I mentioned, this path can be both logistic and time intensive. If we wanted to be officially carbon neutral, we would need that project to be high enough impact to displace between 413K - 2259K kg of CO2 emissions and to go through the verification process. That verification process can take 18+ months. Maybe there would be some opportunity for an ROI here but still the effort requirement is too high for most.

Per path (2) - Recommended: After the impact of a green project is measured and verified by a trusted third party carbon offsets are awarded. These projects then typically sell their carbon credits to carbon credit brokers because it can take a while to find those end-consumers who will be buying those offsets. Here is part of where the problems of illiquidity, opacity, and inefficiency in carbon markets manifests.

However, for our purposes of how to become carbon neutral, we could buy enough carbon credits directly to offset our footprint. Carbon offsets vary in their price because they vary in their underlying technology. For example, nature-based offsets are valued differently than something like Direct Air Capture (which basically sucks Carbon directly out of the air and stores it deep underground) so not all credits are equal. BCT is some of the cheapest credits available on the (onchain) market. MCO2 is another carbon credit token which is nature based and a bit more expensive – though Klima has a proposal out to work with the issuers of MCO2 to start adding MCO2 to the Klima treasury.

Alternatively, we have what I outline in the proposal: buying a carbon-credit backed currency which would effectively let us claim carbon neutrality and (ideally) also offer a path towards positive return on investment.

My caution to the Doodles community is that there is a multiple assigned to KLIMA versus the underlying credits. However, this is because the market is pricing in growth. The proposed cost is a bit much to swallow. At the same time, bold proposals are needed to actually gain traction and I (personally) think this is a risk which is worth the reward. I will follow-up with an updated cost analysis as well.

Thank you for taking the time to write up this proposal!

Pasting what I shared on discord:

  1. Is there a more ‘doodle’ way to do this? Klima seems like a cold way to do it, although I understand the rationale. Coming from doodlebank without involvement from the broader community seems rather cursory too.

What can be done to make it more doodle-y:
2. Instead of it being withdrawal of ETH from doodlebank, we encourage individual doodlers to contribute to a specific initiative like planting trees (i.e. Target 10,000 trees to cover the carbon footprint, 1 tree per doodle minted Plant a Billion Trees can be any legit platform).
-Doodlers show their transaction proof and are eligible to receive a special POAP featuring burnt toast artwork (tree + mascot)
-POAP holders are eligible for a raffle to win a doodle from the team vault or fractional doodle from the new incentive proposal

  • Chances to donate correlate to how many trees a doodler helps to plant.
  • If tree planting target is hit, maybe it unlocks more doodles for the give away.
  1. This way, we incentivize the community to take ownership (and create awareness) for helping to bring carbon neutrality to doodles.

  2. Because of the team contributed doodle and official POAP artwork, it shows the world that the team believes in it and makes it ‘official’.

  3. Optional: we include 10k trees in the doodleverse lore.

Thank you again for driving this conversation! :heart:

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I really like the proposal and the way it’s been thought through. I’d be happy to support this motion.

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