#ReflySummer: Driving demand for on-chain carbon on Celo

Toucan recently deployed NCT and BCT tokens on the Celo blockchain, enabling web3 builders to weave carbon into the fabric of their protocols, or to build on top of Toucan infrastructure.

As on-chain carbon markets take shape, companies and individuals are increasingly able to use ethical blockchains to drive healthy demand for carbon credits — and this is very needed to improve and scale voluntary carbon markets at a rapid pace.

Web3 builders play a key role in expanding demand for carbon credits with high integrity through novel protocol design. We’re excited to support those  building applications that leverage carbon credits on open and planet-friendly blockchains like Celo.
Ian Poirier, Head of Web3 Partnerships, Toucan

Web3 empowers every user to become directly engaged in investing in climate projects, by adding a layer of transparency and accessibility to carbon markets that previously simply didn't exist. New protocols open up a host of innovative use cases for credits. They are leveraging decentralized finance (DeFi) infrastructure to drive climate action, create new incentives for holding or retiring carbon credits, or automate the offsetting process.

This post explores some interesting use cases that are particularly important for driving demand for on-chain carbon credits on the Celo blockchain.

Automated climate investing

Let's take Spirals, for example: Users can stake their Celo tokens on the Celo blockchain. With Spirals, they can choose to allocate a certain amount of their staked Celo towards funding climate projects. Under the hood, this includes purchasing NCT, which is directly backed by nature-based carbon credits. Users will receive $SPRL tokens in return for their contribution to climate financing, and can then vote with their tokens on which climate project they would like to invest in.

Spirals helps to internalize the negative environmental impacts of our current finance system, and is creating a flywheel where greater use of the protocol leads to greater environmental impact. This is a key underpinning value of the regenerative finance (ReFi) movement.

By building at the infrastructure layer, Spirals will be a multiplier of all existing impact built on Celo. Toucan builds the carbon infrastructure required to enable any of this to be possible. We couldn’t be more excited to work together!
Helena Merk, Co-Founder & CEO of Spirals Protocol.

Decentralized carbon marketplaces

Web3 can also address the inefficiencies of voluntary carbon markets, which are plagued by issues of fragmentation, transparency and accessibility. An efficient and — equally important, open — on-chain carbon market infrastructure allows individuals and corporates to conveniently participate in climate investing, without having to go through brokers or approval processes.

Senken is a project aiming to make it easy for any company to access web3 carbon supply and support individual climate projects. They are driving demand for carbon credits with their user-friendly climate finance gateway. This moves us increasingly towards an integrated and digitally native carbon market.

“We are very pleased to be able to build on Toucan's carbon infrastructure. We strongly believe that an ecosystem is not just for marketing purposes. We need to live it. Only together can we succeed in combating climate change. I look forward to many more steps to make Toucan's pioneering work in digitizing the VCM accessible to non-Web3 stakeholders.”
Adrian Wons, Founder & CEO of Senken.

Automated offsetting

Another application of web3 demand projects relates to enabling users to automatically offset the climate impact of their crypto activity.
Return protocol demonstrates how easy this can be: You just have to store the Return offsetting NFT in your wallet, set your offset preferences on the Return dashboard, and then transact as normal. Return will automatically purchase tokenized carbon credits on your behalf, so every transaction you perform becomes carbon-neutral.

Along with the innovative protocols we outlined above, Celos mobile app Valora brings tokenized carbon credits to everyone with a mobile phone, making it even easier and more convenient to buy, trade, and use crypto the regenerative way.