Thread by @climateXcrypto

I would like to invite all of #ReFi to participate in a public retro on @KlimaDAO. 📉

ICYMI - $KLIMA is a billion dollar ponzi scheme which promised to finance climate action... instead it made a small group of VCs, carbon brokers & founders millions. 💸

Here's the story.

1/

Firstly, I want to start with my motivation.

1. I'm a committed husband and father of two young boys.
2. I am gravely concerned about our planet's future.
3. I have dedicated my entire life to building a better world for generations to come.

Verify: linkedin.com/in/jbellison/

2/

I believe public ledgers paired with digital measurement reporting and verification (dMRV) are the critical tools to unlock trust and enable trillions of dollars of critical climate financing within the next 30 years.

Capital flows at the speed of trust.

3/

I have seen the ponzi schemes of @stablekwon, @SBF_FTX and many others ruin the livelihoods of several close friends.

I've seen deep reputational damage to one of the most promising technologies in all of human history.

We cannot afford any more ponzi schemes in #ReFi.

4/

I have seen the moral, social & technological innovation in #ReFi by serving 300+ founders, supporting 30+ events & reaching thousands through my work at @ReFiDAOist

I have hope.

But we need to separate the wheat from the chaff before the next cycle.

So here it goes...

5/

The insights I'm about to share were gained during my time across three key phases:

1. Investing in @KlimaDAO in September 2021

2. Joining @ToucanProtocol as an interim executive

3. Building @ReFiDAOist as a founder with @daryljedwards

6/

For those of you who don't know, @ToucanProtocol created the key technological innovation to enable @KlimaDAO's ponzi scheme.

It was a bridge between @VerraStandards carbon offset registry & DeFi liquidity pools in @SushiSwap.

I had a very close look. at the system...

7/

@KlimaDAO was a fork of @OlympusDAO with one key difference:

Instead of backing an algo-currency with $DAI (a US-dollar backed asset), it would be backed with a carbon offset—which in theory would finance climate solutions on the ground.

Unfortunately, there was a problem.

8/

The carbon credits @KlimaDAO strategically targeted were the oldest, low quality credits on the market.

The ones that no corporates wanted to buy (for fear of backlash from stakeholders and the press).

So there was a HUGE supply of these credits available.

That's not all.

9/

The theory of change was fundamentally flawed. The 'sweep the floor thesis' stated:

"If we buy all the old, low-quality credits, prices will go up, carbon price go up & corporates pay more for climate solutions"

Sounds like a win right? 💪

Wrong... as we later found out.

10/

There is an ENORMOUS supply of old, low quality credits on the voluntary carbon market—most of them issued by market leader @VerraStandards.

The problem is Verra's database doesn't show which credits are yet to be issued, but have already been verified, aka 'Zombie credits'

11/

@carbonplanorg explained this concept in their article "Zombies on the blockchain" by @dcullenward jointly with the @business article by @AkshatRathi.

This opened the door to a wave of scrutiny that ended in @VerraStandards banning the tokenization of their credits.

12/

Winding back a bit, the founding team at @KlimaDAO either new about these zombie credits, or were lying about their carbon expertise.

Founded by a group of 12 technologists and marketers—@Dionysus_Klima was the self-professed carbon market veteran.

Everyone trusted him.

13/

In a partnerships call between @ToucanProtocol and @KlimaDAO in November 2021, myself & Toucan's lead engineer raised this concern with @Dionysus_Klima and @sy_zygy_:

"A broker told us the theory of change for KlimaDAO was fundamentally flawed due to these zombie credits."

14/

In this meeting, @Dionysus_Klima ensured us that this wasn't the case, there wasn't a near infinite supply of garbage credits, and awkwardly changed the topic.

It was at this point that I realized something was wrong... why was he so scared to talk about this?

15/

At this point, I had decided to invest thousands of my own money in $KLIMA as I believed the theory of change "buy crap credits, lock them up, price of carbon goes up, climate projects win".

You can see my purchases here starting September 14 here:

etherscan.io/tx/0x59da82636…

16/

But I didn't really care about the money. In fact, I sold my tokens within the first hour of the crazy launch (felt like a scam) and bought back in at THE TOP because I believed the theory of change so much.

I wanted desperately to make an impact.

If I made money—bonus.

17/

I started digging deeper into the origin story of Klima, reading all of their documentation.

I discovered this thing called $pKLIMA that no one was talking about. I started asking myself:

What was it? Why did the founders and VCs have this token but no one else did?

18/

@KlimaDAO describes $pKLIMA "a KLIMA derivative token given to stakeholders, advisors, core team, and the DAO... an investor would provide 1 BCT and 1 pKLIMA to mint 1 KLIMA."

This is where things get spicy...

Doc: docs.klimadao.finance/developers/con…
Contract: polygonscan.com/address/0x0af5…

19/

Why hadn't the core team at @KlimaDAO told anyone about $pKlima or these outside investors?

Who were they? How much did they raise?

Why didn't I have any $pKLIMA?

Why did they need BCT to exchange $pKLIMA for $KLIMA?

20/

I talked to two groups at this stage:

Degens from @OlympusDAO and traditional carbon market folks. Odd mix. I know...

I gained two key learnings in these conversations that helped me understand the core dynamics of the ponzi scheme and who was making money.

21/

I. EXIT LIQUIDITY

VCs & core team members could redeem $pKLIMA proportionate to the amount of $KLIMA that was issued.

The incentive here was to issue (or dilute) all the retail investors which would enable $pKLIMA redemptions for $KLIMA so they could sell faster. High APY.

22/

As you look at the price action of $KLIMA, you can see this enormous price rise from launch on 10.18.21 up until a peak of about $3683 on 10.26.21.

From then on, prices began to crash.

Look at the $pKLIMA transactions over that same time period:

polygonscan.com/address/0x0af5…

23/

The sentiment among the community of token holders was strong. Klimates in Discord kept buying, but Klima's VCs, advisors and team members kept dumping.

Why would they exit so heavily & so soon if the real goal was to solve a long-term systemic issue of climate financing?

24/

The learning from carbon market folks was that $BCT was basically worthless ($0.50 - $1.50). No one corporates would buy it.

At the same time, these were going on-chain for $5-10.

Folks who knew how to source credits off-chain and bridge were making insane profits.

25/

@OlympusDAO, VCs & Klima core needed $BCT to redeem $pKlima and I doubted they were buying them from Toucan's @SushiSwap pools.

I started looking around on Twitter and found an account called @offsetra that was RT'ing all of Klima's stuff so I DM'd (see below)

26/

I obviously didn't have the money to buy 25k tons of carbon.

I wanted to understand how much supply they could source.

Their response confirmed they could source this volume of credits.

The twitter feed was scarily related to the @KlimaDAO stuff.

27/

Turns out that one of @offsetra's advisors named Drew Bonneau decided to suddenly use his real name in his position at @KlimaDAO on a blog post. 👀

klimadao.finance/blog/bct-hfc23…

His LinkedIN matched up:

linkedin.com/in/andrew-bonn…

28/

I recognized this name...

I had seen it on a pitch deck that one of the investors in our community sent me titled "C3 Pitch Deck".

There it was: "Andrew Bonneau" of @offsetra

The investor said that @c3_app_ was effectively a @ToucanProtocol fork with really toxic energy.

29/

He said one of the folks on the call was a guy named 'Cujo' & a guy named 'Brian'—two names I recognized from @KlimaDAO policy team.

Wait—so @KlimaDAO core team was raising money to compete with it's core partner @ToucanProtocol that made this whole thing possible?

30/

I was acting as an Interim Head of Growth at Toucan at the time and was deeply upset by the betrayal.

I knew there were issues between the founding team of @ToucanProtocol & @KlimaDAO but to back stab your partner, fork their protocol and raise money to THEIR investors?

31/

This was toxic, selfish and violent extraction at play here.

These folks weren't trying to build a bridge to a better future...

They were trying to seize the biggest economic opportunity they could find.

Or so I thought...

32/

I began digging into everything I could find. I wanted to know who @KlimaDAO's investors were. I wanted to know who was bridging... who was making all this money.

And where the money was going. 💸

Did all of this money have ANY impact on solving climate change? 😭

33/

I discovered two billionaires that had associated themselves with @KlimaDAO, first a quote from @mcuban—an American businessman with a net worth of $4.8B, Shark Tanks guy, @dallasmavs owner... you know.

He was buying 50k of offsets? Every 10 days?

For WHAT? His footprint?

34/

I began looking around for other evidence that @mcuban was associated with @KlimaDAO. Rumors associated Mark with an address that dumped huge volumes of $KLIMA in the weeks following the launch.

Was Mark Cuban buying thousands of tons of carbon into $BCT to dump $KLIMA?

35/

I then found a @dealbook interview with Adam Neumann (We Work) where he said "We started looking at DeFi... and about a month ago... we found a protocol called Klima"

Now this was posted on November 10, 2021—was Adam Neuman a $pKLIMA investor?



36/

I then found a website of a VC firm called @shimacapital that openly showcased @KlimaDAO as a portfolio company and later backed @c3_app_

This guy had a reputation in the space for shaping deals with quick exits—C3 and Klima sounded like a great fit...

37/

So at this point I knew that there were at least two billionaires and one VC involved in @KlimaDAO in some capacity.

Where did the core team raise this money?

Why wasn't it on-chain?

Why didn't I have visibility over this as a token holder of a 'DAO' treasury?

38/

I publicly asked Klima founders for clarity, but all they told me to do was look at the blog posts... 🤦🏼‍♂️

I was frustrated not only as a collaborator, and a community member but as an investor who was publicly lied to on multiple occasions.

39/

On a community call w/ @KlimaDAO & @c3_app_ on Feb 21st, I asked TWICE:

"What is the relationship between C3 and Klima?"

@ArchimedesCryp1 said they were just advisors. Twice.

I had a PDF in front of me that showed otherwise (link below)

bit.ly/3JwiRjd

40/

Not only did I have evidence that Drew Bonneau was apart of Offsetra, Klima DAO and C3, but I also knew from @VerraStandards & @goldstandard that C3 did NOT have consent to access to their API (which was their key claim).

Was C3 another scam by the same bunch of anons?

41/

Looking at C3 memes & defense by Klima's lawyer @0xLegal, it seemed like @KlimaDAO, @offsetra, @CreolControl & @c3_app_ were in one big tangled scam hidden by a series of pseudo-anonymous profiles.

@AitherGlobal was an Italian off-chain entity giving @c3_app_ legitimacy

42/

I heard the lawyer @0xLegal speak on a call before...

He had an Italian accent. Aither was in Italy.

Googling the names on the C3 pitch deck and found this company called Smartie Solutions founded by none other than Joshua Bijak and Giorgio Alessandro Donà-Danioni. 🤯

43/

Joshua Bijak and Giorgio Alessandro Donà-Danioni were the same names on the C3 pitch deck.

They started a blockchain consultancy together called Smarty Pants.

I knew this was @ArchimedesCryp1 and @0xLegal—pulling a massive rug on the whole #ReFi movement.

44/

Guess what I found on Giorgio Alessandro Donà-Danioni's Linkedin?

linkedin.com/in/giorgiodona/

Role: Chief of Legal department @c3_app_

Direct connections:

- @yidagao of @shimacapital
- Andrew Bonneau of @KlimaDAO

Bingo. 🎯

45/

Look at his activity feed...

@KlimaDAO, @AitherGlobal, @c3_app_

And a Youtube video with the exact voice as the @0xLegal on Discord...



46/

What's worse about this situation is not just the fact that the founders of Klima DAO blatantly lied about their conflicts of interests to community members.

They also blatantly rigged the system for HUGE personal gain.

47/

One of the puppet founders of @c3_app_ (we know who the real founders are from the deck) posted a request for comment on the official @KlimaDAO forum offering:

- 10% to KlimaDAO
- 7.5% to team
- 75% to ecosystem incentives

Let's break this down...

48/

forum.klimadao.finance/d/23-request-f…

Given that @KlimaDAO and @c3_app_ were founded by the same team with outsized token allocations in $KLIMA via $pKLIMA they are effectively giving themselves an extra 10% of the $C3 supply—but hiding it...

What's worse, where do the HUGE 75% ecosystem incentives go?

49/

Carbon brokers who are able to source credits off-chain and fulfill key functions for the protocol (bridging, liquidity, staking).

I wonder how this whole C3 experiment went, how VCs fared, how retail investors faired and who made money...

Remember the Klima chart? Yup.

50/

Here we have on display a series of repeat ponzi scheme engineers who have decided to manipulate people's desire to do good for the planet for their personal gain.

VCs win. Founders win. Brokers win.

Retail investors lose. Project owners lose. Land stewards lose.

51/

I'm sure you're thinking this is the end...

SURELY this is the end of this insanely long depressing thread of yet another crypto scam stealing money from everyday people and giving it to a handful of wealthy men in the global north.

It's not over.

52/

The founders at @KlimaDAO are brilliant, passionate people who genuinely believe they can do this again.

They might even believe they're helping make a positive difference in the world. I've met them in-person. Told thim this story.

Asked them to come clean...

53/

But they have decided not to...

And it looks like they're building another ponzi scheme called @carbonmarkcom. Same branding. Same Twitter accounts.

@KlimaDAO supported, KlimaDAO promoted...

Don't touch this thing. You know the story. Pump. Dump.

54/

https://twitter.com/carbonmarkcom/status/1633463584209657857?s=20

I would also highly recommend that anyone currently contributing to @KlimaDAO disassociate from the organization immediately.

Most folks are anon, but as you've seen in the thread above, identity can easily be uncovered.

Anything that is hidden always come to light.

55/

@KlimaDAO wasn't just a ponzi scheme.

It was also a spark for a movement of social, cultural and technological innovation.

But in order for us to make a REAL difference in the world. To make a REAL dent in the climate crisis...

We have to do things differently.

56/

We need to practice RADICAL transparency.

1. ALL funds need to be on-chain
2. Doxxed addressees of founders AND investors.
3. Quarterly impact & financial reports
4. Open cap tables and term sheets

57/

We need to practice EFFECTIVE governance.

1. Anyone can write proposals
2. Active participation and thoughtful discussion incentivized
3. Scrutiny celebrated with open debates
4. Checks and balances
5. Limits on power

58/

Above all we need to make a very honest assessment:

👉🏼 Are we here to make money? 📈
👉🏼 Or to change the world? 🌍

When money is on the table, there is always an incentive to accrue value for personal gain.

59/

But the science is INCREDIBLY clear: Beyond a certain threshold (about $75k for the average American), more money not only doesn't make you happier, it can also make your life more complicated...

...make you more lonely
... more greedy
... insecure
... dissatisfied

60/

Before you go out and start vilifying the names of the people I've mentioned in this list I want to ask you some questions:

Aren't we all human?

... deserving of love?
... inevitably flawed?
... prone to corruption?

Have you ever lied? Stolen? Cheated?

61/

Sometimes people think they can get away with things because they know how to play the game.

Crypto creates an entirely new world where the fabric of money and finance is redesigned.

It provides the opportunity for sharp, technical minds to abuse.

62/

It also provides the ability to redesign money itself to accurately value what ACTUALLY matters.

Clean air. Fresh water. Living soil. Stable climate. Human health.

So before you decide that crypto is bad, I invite you to inquire:

Is it the tool, or the wielder?

63/

We need public ledgers. We need open data. We need open science. We need remote sensors. We need artificial intelligence.

These are the tools we need to solve climate change, biodiviersity collapse and social injustice.

We just need to learn how to wield them for good.

64/

Solving climate change isn't just about technology though, it's about relationships.

How we relate to one another.

... our planet
... our neighbors
... our adversaries

65/

My current hypothesis is that the extractive society in which we live is rooted in a story of separation.

It's the colonial, capitalist, consumer story that says you and I are separate from each other and the earth.

I think this story is the root cause of all of this.

66/

What happens when we begin to tell a new story?

... rooted in a new set of values?

Where people & the planet are not separate but instead apart of one living system.

Where we take care of one another because we need each other to survive.

67/

We take care of nature because we are apart of it.

Nature is apart of us.

When the soil dies, our intestines suffer.
When the atmosphere is polluted, we can't breathe.
When the water is poisoned, we get sick.

Let's figure out how to value what actually matters.

68/

This is #ReFi...

Not some pump and dump ponzi coin founded by a bunch of anons 🤣

69/