[Daily] Does your blockchain have carbon credits?

Good morning! Welcome to The Daily Moon. Over the weekend, popular project Azuki put out a link asking users to mint new NFTs, people flooded that website and lost $750,000 in USDC, 11 NFTs and 3.9 ETH. The Twitter account was hacked and the hackers had put the wallet draining link out instead. There’s no clue of why or who did this but people lost a lot.

Moving on, today we talk about carbon credits on web3, and NY may have a crypto use case

As of Sunday, 4:20PM IST

The markets recovered. Bitcoin was at $23,420 levels and Ethereum stayed above $1,600. Nasdaq ended higher on positive economic data in the US. Back home, Sensex and Nifty fell due to a selloff in Adani Group stocks.

Beating Climate Change, One Block At A Time

C+Charge, an EV-charging station recently raised $370,000 in token sales. But the fascinating bit is that the charging points will be built using blockchain. Vehicle owners who charge their EVs here will get carbon credits via a crypto token. And that’s really where the market could be moving.

We have read enough about climate change risks and how companies aren’t doing enough. There is a new development on that front. Carbon credits are being tokenised, meaning the emission information is stored on the blockchain. In exchange, corporates and individuals get crypto tokens and NFTs.

FYI Carbon credits are permits given to companies to limit their CO2 emissions at a certain limit. If companies breach the emission cap, they need to buy more credits. These credits are then traded in specialist carbon markets.

Blockchain and web3 have come into the picture to make carbon credits more accountable. Emission activity can be tracked on the blockchain without any manual intervention.

What’s the buzz?At the recently concluded WEF, tokenized carbon credit was the buzzword. Companies want to turn net-zero and crypto may have a use case.

Filecoin, for instance, has a web3 storage solution called CO2.Storage for carbon offsets. CO2.Storage will store credits and help companies track emissions. Then there’s Solid World, a regenerative finance or ReFi solution by HBAR Foundation. This project, to be launched in 2023, will enable carbon credits on the Hedera blockchain. The HBAR Foundation has also set aside $100 million for climate-focussed blockchain projects.

Blockchain is the preferred alt to traditional carbon trading because:

1. Credits are easier to track

2. Pricing is transparent

3. Token issuance is simpler

Blockchain-based carbon marketplaces such as Just Carbon, Moss.Earth, and Toucan Protocol use the same principles of traditional carbon trading. Adam Neumann’s Flowcarbon has something similar. The climate technology company has released an NFT art collection, Flow3rs, proceeds of which will fund climate projects.

The crypto world is seeing tokenised credits as its moment of redemption. After all, crypto accounts for ~0.3% of the global annual greenhouse gas emissions. Carbon credits on the blockchain are in a way, compensating for the ecological impact of crypto. For instance, Anthony Scaramucci-led SkyBridge Capital bought 38,436 tons worth of carbon offset tokens from Moss.Earth in 2021. SkyBridge claimed that this was equivalent to the carbon footprint of its BTC holdings.

So, what’s next?While there is a surge of web3 carbon credits’ providers, some concerns about the fund use exists. These include:

• Project usage information: Funds raised from tokenised credits are spent on climate projects. But sometimes, the exact information is unavailable. Moss.Earth tokens, for instance, are linked to forest protection. What is unclear is which project is linked to a given token.

• Tokenomics: There is excitement among companies to invest into web3 carbon credits. But tokenomics such as circulating supply and mint schedules may be tough to understand for a lot of people. Also, huge price differences between the tokens can be confusing. For example, Moss.Earth’s MCO2 trades at $2 while Just Carbon’s JCR trades at $17.

You can DYOR. But some projects are hard to understand even after that. Though the market’s yet to go fully mainstream, making things simpler can bring more users.

NY May Have A Use For Crypto

New York has famously been not the friendliest with crypto but things may change. Recently, a bill was introduced into the New York state assembly to allow people to pay their fines using crypto.

Just fines?Fines is how it starts. The ambition is to let citizens use certain selected tokens to pay state agencies, this can include fines, taxes, civil penalties or even rent.

But it’s not just New York, Arizona, too, wants to use crypto for certain state payments.

When does it startNot anytime soon. It’s a bill in both New York and Arizona. It is still to be voted on and then sent to the governor to be signed into law. It’s a step in the right direction.

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Who are we? This newsletter’s ambition is to educate (and to entertain). The world of money is changing everyday and we want to help you decode what’s happening in the world of crypto, public markets in the US and India.