Expediting bridge approvals, BCT quality and selective redemptions

We're expediting bridge approvals to twice a day, discussing how to improve BCT, and improving the redeem function to increase the quality of our pools

Expediting bridge approvals, BCT quality and selective redemptions

As a result of the community feedback we received following the mass rebalance along with the engagement after NCT launch, we wanted to share a few major improvements we have made to the protocol. These are just a few of the improvements we’ve been working on alongside preparing a public roadmap and  preparing to announce some world-class additions to our team.

We have begun contacting qualified candidates who responded to our Call for Carbon Market Governance Delegates to participate in an ongoing discussion with the Toucan core team and our pool party partners about how to manage our protocol to increase the integrity and stability of the on-chain carbon market.

1. Expediting Toucan bridge approvals

We’ve heard two consistent requests from our community:

  1. Clarity on bridge approval timing
  2. Faster bridge approvals

We have reciprocated by creating substantial automation around the process, which is live as of today. 🎊

Now users will be able to confidently expect bridge approvals to be completed twice a day Monday through Friday.

This is just a single milestone in our commitment to sense and respond to our community’s needs by improving our infrastructure for the integrity and stability of the on-chain carbon market.

2. Increasing BCT pool quality

When we launched BCT back in October 2021, this was in collaboration with Klima DAO whose expressed purpose to sweep the floor of carbon has largely been fulfilled. We now have a highly liquid carbon pool that off-chain market traders use as a price signal to determine the floor price of the voluntary carbon market. We have also seen a 2-3x increase in the floor price of carbon globally. This means more planet-positive projects become more economically viable in part due to the financing and price action driven by BCT.

These achievements couldn’t have been possible without the collaboration between Toucan, Klima DAO and the broader ReFi ecosystem. Now it’s time to shift gears and focus on financing higher quality carbon credits, in line with Toucan’s mission to build infrastructure to support the world’s best climate crisis solutions.

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We’ve submitted an RFC on the Toucan forum to open a conversation about how to increase the quality of BCT with two considerations:

1. Excluding credits issued more than 5 years after the vintage date
2. Raising the acceptance criteria to 2012 or 2014+.

There will be a 7-14 day discussion on the RFC before we move to a proposal to updating the criteria. Anyone bridging carbon or speaking to brokers should take note — comments are very welcome.

3. Improving the redeem function

There have been a number of suggestions from the community about how to improve the redeem function. Thank you to everyone who has shared their opinions, we’ve heard you and are excited to share the first step in a major evolution of the redeem function and the regenerative economics underlying the entire Toucan infrastructure.

Selective redemptions

As we announced in our statement introducing the NCT pool, we have implemented fees for redeeming select TCO2s in our carbon pools. There are still no fees for the ‘general redeem’ function which allows anyone to redeem the default TCO2s in a pool.

In order to redeem underlying TCO2s of a specific vintage or methodology, users must pay a selective redemption fee (see more information below).

These selective redemption fees are broken into two parts and differ from pool to pool.

NCT fees

In order to redeem select nature-based TCO2s from NCT, a 10% fee applies. The fees are used to service two different actors:

  • 5% for Toucan Association (to sustain and improve the protocol)
  • 5% for our planet (burning low quality credits to improve the quality of the pool)

BCT Fees

In order to redeem select nature-based TCO2s from BCT, a 25% fee applies. This is broken into two parts:

  • 5% for Toucan Association (to sustain and improve the protocol)
  • 20% for our planet (burning low quality credits to improve the quality of the pool)

We wanted to increase the fee for our planet in order to more quickly increase the quality of the BCT pool. By implementing a higher fee for the planet in the short-term we hope to increase the quality of the pool more rapidly.

These fees are likely to change over time and will be the topic of conversation in future Toucan forum posts as we continue to decentralize progressively.

This integrated burning represents our aspiration to embed regenerative economics into the fabric of money.

We've also published self-offsetting smart contracts on our builder hub to making it easy for developers to embed regeneration into the fabric of Web3.

Thank you

Thank you to all of our pool party partners and to everyone who bridged carbon credits since launch and for those who have bought and held BCT. Thank you for everyone who has participated in our Discord and Forum regarding the mass rebalancing and launch of NCT.

It’s been a long journey at Toucan since Raphaël and friends built a prototype of Toucan at ETH London back in January 2020. We’ve bootstrapped from nothing and decided not to take fees until very recently. We’ve been working with a very small team and until recently, none of us have gotten paid for our efforts.

With fees introduced and support from some early backers through Gitcoin grants and beyond, we’ve started paying most of our team and are excited to show the outcome of these concerted efforts. There’s been a lot going on recently and we’re grateful to be able to shift gears and focus on serving our customers through rapidly evolving infrastructure.