Carbon offset protocol KlimaDAO has now accrued over 14 million on-chain carbon offsets and is causing waves in the more traditional carbon offset industry.
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The aim of KlimaDAO is to acquire as many carbon offsets as it can in order to drive up their value and make offset-generating activities more profitable.
The Mark Cuban-backed project’s treasury has added over 5 million carbon offset tokens since late Nov. 2021, bringing the total to 14.5 million as of the time of writing. Its offsets are tokenized and bridged to Polygon (MATIC) in the form of Base Carbon Tonnes (BCT) by Toucan Protocol and the new MCO2 tokens by Moss, which were first added to the treasury on Jan. 6. KlimaDAO now owns the majority of the 17 million BCTs in existence.
The decentralized autonomous organization is spending $100 million on offsets.
Much of the $100 million used for buying offsets comes from the sale of bonds, which are used to increase the funds available to the DAO. Users are incentivized to buy bonds by receiving a discount on KLIMA, the native token from the project. On Jan. 6, the DAO boosted the discount on KLIMA bonds to help raise more funds needed to buy more offsets.
The DAOs rapid acquisition of carbon offsets has caught the attention of the traditional carbon offset firm Gold Standard. CEO Margaret Kim criticised the DAO in the Wall Street Journal, suggesting the anon team behind the project posed transparency issues.
“We are also concerned about the fact that the founders are anonymous, which runs contrary to the need for transparency in climate action generally and carbon markets more specifically.”
KlimaDAO team responded to Kim’s concern telling Cointelegraph, “There are ways to provide assurances without being doxxed.” Being doxxed refers to revealing an anonymous individual’s true identity.
KlimaDAO founder Archimedes also addressed the issue of anonymity and trust in the on the Jan. 10 episode of podcast Planet of the Klimates:
“Are we ever going to be at a point where we have to reveal who we are? At some point, maybe, Klima becomes so powerful that world governments demand to know who we are.”
The team also told Cointelegraph that traditional firms like Gold Standard “may need more regulatory clarity into how a DAO works legally” in order to be more comfortable with the tremendous growth in the project.
The KlimaDAO team appears poised to take on the challenges associated with carbon offsets on the blockchain for the long term as it said, “We are prepared to do what it takes to make the DAO successful.”