C3: a blockchain-native scaling solution for the carbon markets

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So, why is C3 here? why get involved early? And why collaborate with us?

C3 is a permisionless, automated carbon bridge.

C3 has a native retirement function that enables users to manage their carbon needs, and in-built incentives to drive adoption.

C3 is decentralized and owned and governed by C3 token holders.

Bridging the needs of ReFi

Regenerative Finance (ReFi) will help overcome barriers and inefficiencies in the Voluntary Carbon Markets (VCM) which stem from asymmetrical information, fragmentation and poor liquidity. It achieves this by coupling the VCM with the transparency of the blockchain, and the powerful incentives of DeFi.

However, at this early stage we require collaboration from all players to help stimulate positive activities that help us bootstrap the ReFi market.

Staking, bridging and liquidity provision of tokenized carbon credits are the fundamentals of ReFi. C3 incentivises all these activities through the distribution of C3 tokens to active users of the c3.app.

We are a complementary piece of infrastructure for the system, aiming to deepen supply on-chain and maximize bandwidth between these two disparate systems (i.e. DeFi and the VCM).

While KlimaDAO utilizes its community, powerful incentive mechanisms and innovation to set the pace and carve out the long-term development ReFi, C3 provides an additional layer of incentives and governance power for those that want to get exposure to the tokenized carbon tonnes that enable ReFi’s growth.

Our incentives fall outside of KlimaDAO’s immediate sphere of influence and that of other ReFi solutions. However, we do empower the growth of partners in the space by ensuring there is ample supply of tokenized carbon tonnes on the the market.

Below we outline some of the our mechanisms and how they enable our ecosystem.

Bridging — the act of bringing carbon credits onto the blockchain from the legacy system:

  • When users bridge their carbon credits onto the blockchain, they help provide supply to the market that can be used to do useful things, such as be bonded with KlimaDAO, or in future be used to provide collateral for other beneficial yield-generating activities.
  • Unlocking the flow of opaque, brokered carbon credits onto the blockchain builds confidence in the market, and provides transparency those who wish to acquire and sell carbon credits.
  • The deepening of supply on-chain establishes options for users and builders, and also sends a market signal that this is the future of the carbon markets.
  • Early adopters take first mover advantage and stand to gain the most in the long-term as they accrue knowledge and incentives ahead of others.
  • As more credits come on the blockchain, it establishes the lindy effect, perpetuating the value and adoption of the blockchain for carbon carbon markets.

Staking — the act of locking up tokenized carbon tonnes to pool supply on the blockchain:

  • Holding carbon assets on-chain is just as important as bridging; it creates a signal that the market is live, and it ensures supply is readily available for use when market conditions are favourable.
  • Staking is a carbon sink for the supply of the carbon market; it provides a place for users to keep their assets in while they are acquiring governance; it mitigates the opportunity cost of simply holding supply.
  • Currently, the main reason to bring carbon credits is on-chain is to arbitrage the price differential which creates boom-and-bust cycles; staking creates a healthier environment for the market.
  • Holding off-chain is the norm. Holding on-chain is preferable with C3 as staking accrues rewards and gives the staker governance power.

Providing liquidity — depositing tokens into the C3 carbon pools to allow traders to fill their orders:

  • Liquidity is bandwidth for tokens; the more liquidity held, the greater the transaction volume can be.
  • Liquidity providers are fundamental to enabling an efficient market, and are rewarded for their activities.
  • C3 builds on the liquidity bootstrapped by KlimaDAO to maximize the efficiency of the markets, and provides another layer of complementary to the on-going quest for deep liquidity.

Governance

C3 believes in a fully decentralized governance environment, where the power to govern our product is held by those who have participated in the bootstrapping of a nascent emerging market. By coupling DeFi incentives, with decentralized governance, we can rapidly scale ReFi and empower the growth in the carbon markets.

The rewards for the above activities proportionally and indiscriminately to all users via C3 tokens. Those that hold and accrue C3 will shape the development and future of our system.

Why participate in C3 today?

There are of course risks and rewards associated with being an early adopter. However, we see what has been happening to the carbon markets over the past 6 months as a paradigm shift. The impact of the blockchain on carbon supply is regularly covered in the press. The largest and most influential market players are watching (and commenting) closely.

We outline some key reasons why to participate today:

  1. Participating now is the best way to maximize exposure to the next phase of growth for the market. This space is scaling rapidly. KlimaDAO launched in October, and it is estimated that already 5% of Verra’s supply has been tokenized in response. C3 will enhance this growth. Early adopters take the most risk, and early adopters get the most rewards — in our case by acquiring C3 governance tokens at a low-cost basis.
  2. The initial release rate will be at around 3 millions C3 per day, with rewards tapering off over time to be low, or zero, after the first 4 years. Acting early enables users to capture the most value. Each day makes a difference.
  3. Capturing value from day-one, enables users to have the most influence over the protocol’s growth and development through our decentralised governance approach.
  4. In the future, C3 will have permissionless credit tokenization and pool development capabilities. Being an active participant in the early-stage positions users well to be able capitalize on this opportunity when it goes live. In terms of both knowledge, and governance power.

Why choose C3 as your bridge?

There are a number of protocols emerging that provide carbon market solutions. To-date, less than a handful have meaningfully moved the dial on climate finance and impacted the carbon markets.

Leveraging C3's and taking ownership for yourself is the best approach, and is in the spirit of collaboration and (3, 3):

  1. To have a real impact and scale in DeFi, the community and liquidity needs to be bootstrapped on day 1. Working together to achieve these things is far easier and more efficient than building from scratch every time. By the virtue of launching the C3 token for governance, we are actively handing ownership to you.
  2. Partnerships are key; in order to drive adoption and integrate the disparate markets of DeFi and environmental commodities. Deep market knowledge and collaborations are fundamental. C3 has achieved this through its partnerships both in DeFi and the legacy carbon market space and is now in a position to execute and deliver for both sides.
  3. Any newly built and competing products must be significantly better than ours to stand a chance of scaling. Improvements should be 9x better, for example.
  4. Time is critical, and ReFi is moving fast. Our product is live and is now accruing value. The decentralization of governance is underway. By working together and sharing a vision, we can establish the new paradigm, immediately.
  5. That’s not all and the future is bright. Together, we can go straight to source. By pooling our capital and networks, we can usher in a new phase of the carbon markets where we bring all activity to the blockchain; our vision includes the creation of DeFi native carbon carbon projects that never need to be passed down carbon market supply chain (see #3 in our Roadmap).

Summary

C3 pairs blockchain’s transparency and interoperability, and Decentralised Finance incentives with the voluntary carbon markets.

C3 pools capital and decision making power to create a highly-efficient, decentralised, and liquid carbon markets.

C3 envisions a future where all carbon credits are tokenized, non-fungible, and the default state of the carbon markets.

For too long, carbon credits have been an opaque business. Those that want a positive impact on our planet should not be penalised by an inefficient, asymmetric market.

C3 positions the Voluntary Carbon Market as the blueprint for the future of commodities trading.

Beginning with the carbon markets is the right thing to do.

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