Thread by @gregory_landua

0/ How to turn a ton of “living carbon” (carbon that’s been sequestered or is being stored in a living ecosystem into a carbon credit:
A 🧵 on a complex topic.

https://twitter.com/Mrcryptoe37/status/1501443474108780544

1/ The basic building blocks of how communities, individuals, companies or countries can create a high integrity, transparent process to link economic value to ecological health, and specifically carbon outcomes, is the reason for existence of @regen_network

2/ 1: Establish the rules for the credit. In @regen_network we call this the credit class.
These rules formalize the credit issuance logic into a standard, or methodology. In Regen Network these credit class’s are self governed as an Eco-credit DAO.

3/ : Credit methodology standards include key information that forms the foundation of the contracts between parties including the terms of “permanence, additionally,”

4/ Permanence is the length of time carbon is stored in a landscape, and additionally is the proof that specific measurable actions lead to the carbon sequestration in the first place, and that those actions are what is being payed for by the credit.

5/ The regen registry program guide that is community governed can be read here: regen-registry.s3.amazonaws.com/Regen+Registry… This program is migrating to gitbook right now and the program will be governed using the cosmos groups module! stay tuned for the world first onchain carbon registry system!

6/ There is a whole spectrum of different types of carbon credits and approaches to verification, but the basics are an agreement about:
- How the carbon in an ecosystem will be measured and quantified
- Who has the responsibility to audit and verify these results

7/ According to the credit class different approaches and ecosystem will require special “buffer pool” rules to ensure there are reserves of carbon credits to deal with uncertainty around the methodology, or unforeseen reversal events.

8/ You can think of buffer pools as the insurance pool to ensure that both the buyer and the seller of the credits really do have a secure unit of account that represents 1 ton of carbon. offsetguide.org/high-quality-o…

9/ common types of carbon credits include:
Avoided emissions credits and carbon removal credits. more more details about different credit types read: smithschool.ox.ac.uk/publications/r…

These different credit types are easily discernible and searchable using regen network's credit taxonomy

6/ There are already standards bodies that have been built to manage credit issuance, and one way to bring carbon into the blockchain and DeFi world is to simply tokenize these credits with existing markets issued by existing institutions. This is what happened with NCT and BCT

7/ For the first interchain carbon asset, @regen_network is planning to follow the on-chain NCT standard to support minting of carbon credits from the verra registry to provide access to liquidity and a swift go to market for the community to engage with offsetting.

8/ These existing credits are a nice place to start and build liquidity around a new green money lego for DeFi. Existing standards are grandfathered into the Regen Registry program to start allowing for access to existing carbon credit supply as we bootstrap onchain carbon.

9/ Finally, let’s talk about how the credit issuance process migrates full onchain: methodologies for verification and credit minting become algorithmic and governed by DAOs.

10/ Significant amounts of data collection becomes automated through direct data collection, remote sensing and user governed data cooperatives and oracles.

11/ credit minting logic becomes integrated into transparent token mechanisms that can link token issuance to a variety of on chain smart contracts for forward contracts, futures tokens, practices based tokens and different credit type for a composable nested issuance system

12/ I hope this 🧵helps to answer both how carbon credits are created, how regen is transforming that process, and how we will create a network that becomes the foundation for a new theory of ecological money.