In this post, we explore:
- What exactly is the Toucan–Puro bridge?
- What makes the Toucan–Puro bridge unique?
- What safety, integrity, and compliance measures have been implemented?
- What functionalities does this bridge have?
- Who can use the bridge?
What exactly is the Toucan-Puro bridge?
The Toucan–Puro Bridge V1 is an innovative piece of software that enables our partners to tokenize, detokenize, and retire CO2 Removal Certificates (CORCs) from the Puro Earth Registry.
Tokenization essentially refers to the process of securely digitizing carbon credit information, enhancing it with additional data, and creating a permanent and transparent ownership trail that everyone can access. Dynamic data is inherently linked to individual digital credits, and updates in real-time.
All information is visualized in a standardized, publicly visible, and easily accessible format on Toucan’s Carbon Explorer, making it easy to compare and browse credits.
What makes the Toucan–Puro bridge unique?
This innovative two-way bridge has been developed in close collaboration between the technical teams of Puro.earth and Toucan to ensure a smooth and fully compliant user experience. The first-of-its-kind bridge uses the Puro Connect API and links it directly to the Toucan Registry.
Every user with a Puro account can seamlessly bridge (or tokenize) their CO2 Removal Certificates (CORCs) into TCO2 tokens, move them back to the Puro registry (detokenize them), retire them, or transfer them to other blockchain accounts.
These functionalities unlock maximum flexibility for credit holders – they can utilize their assets how and where they want to, while carbon finance’s biggest bottlenecks are removed.
As long as there is an active TCO2 token, the credit in the Puro registry is securely locked (immobilized) and can neither be sold nor retired. If a TCO2 retirement request is filed, the credit in the Puro registry is retired as well, and the TCO2 token is destroyed.
What safety, integrity, and compliance measures have been implemented?
Prevention of Double Issuance
To ensure that CORCs are never double-counted, there can only be one active credit – either in tokenized form in the Polygon or Celo network, or in the Puro registry. CORCs in the Puro registry are immobilized when the tokenization process is initiated, and carbon tokens are destroyed (or “burned”) upon detokenization or retirement.
Adherence to KYC/AML Regulations
All users interested in tokenizing their assets need to complete KYC (Know Your Customer) and AML (Anti-Money Laundering) procedures. This happens at the preparation stage and is part of the process of opening a Puro account, ensuring that everyone is complying with regulatory requirements.
Support throughout the process
Experienced members of the Toucan team are closely monitoring all activity happening on the Puro–Toucan bridge to ensure safety, compliance, and a smooth user experience. A dedicated Toucan Verifier checks and approves all submitted tokenization requests.
Confirmation of serial number
The correctness of the serial number input of CORCs needs to be confirmed before the tokenization process can be initiated. This verification step provides additional protection against fraudulent tokenization attempts.
What functionalities does this bridge have?
The process of tokenizing CORCs via Toucan is straightforward: As a first step, users need to request access to Toucan’s Puro Bridge Partner Integration Guide (you can do so here), and complete the outlined steps. These include preparing a trader account, providing information about the organization you’re associated with, and accepting the bridge’s Terms and Conditions. Users also need to have access to a blockchain account to which the tokenized CORCs will be sent.
To initiate the tokenization process, you’ll need to provide the Toucan team with the serial numbers of the CORCs you want to tokenize, along with the project name and destination address.
Once Toucan receives the tokenization request, our technical team will securely lock the corresponding CORCs on the Puro registry, which prevents double issuance.
We will then create (or mint) a digital record (NFT or non-fungible token) representing the entire batch of CORCs you’re bridging. This NFT is unique to the tokenization process you’ve triggered, and to the CORCs that you are tokenizing. It contains a host of publicly visible information, including your CORCs’ metadata.
Finally, Toucan will split the batch NFT into individual TCO2 tokens, one for each CORC you’ve tokenized. These TCO2 tokens will be transferred to the blockchain account you’ve specified. You can then freely access, transact, or retire them, or bridge them back to the Puro registry (detokenizing). Each TCO2 token represents one carbon credit with a value of one tCO2e.
Detokenizing CORCs effectively means transferring TCO2 tokens back to the Puro registry and erasing the digital version of your CORCs. For this process, you first need to submit a detokenization request to Toucan. We’ve outlined the guidelines for this in our Puro Bridge Partner Integration Guide.
After receiving a detokenization request, the Toucan team initiates the process. The corresponding CORCs are unlocked in the Puro registry, while their TCO2 counterparts are permanently destroyed (burned). You can then use your CORCs as usual within the Puro ecosystem.
Retirements of tokenized CORCs can be independently executed via our application. The credits you’ve opted to retire will be transferred to an on-chain escrow account, and a retirement prompt is sent to the Puro Registry. Now, the corresponding CORCs are retired in the Puro registry. Once this has happened, their digital TCO2 counterparts will be destroyed, effectively nullifying the tokens. This retirement process is innovative and highly secure and ensures that retired CORCs can neither be used in the Puro registry nor as TCO2s. The retirement transaction should take no longer than a few minutes to complete.
Who can use this bridge?
- Has a Puro account (for tokenization and de-tokenization) AND
- Owns CORCs in their Puro account (for tokenization and de-tokenization)
- Has access to a blockchain account on the Polygon or Celo network (for tokenization, detokenization, and retirements).
Toucan is building the technology to bring the world's supply of carbon credits onto energy-efficient blockchains and turn them into tokens that anyone can use. This paves the way for a more efficient and scalable global carbon market.