The carbon offset accumulating DAO on Polygon has speedily increased the total amount of offsets it has in its treasury by increasing spending and diversifying its source of offsets. The protocol KlimaDAO has now accumulated more than 14 million on-chain carbon offsets and is creating waves in the more traditional carbon offset sector.
KlimaDAO aims to buy as many carbon offsets as it can to push up their value and make some offset-generating activities more profitable. This Mark Cuban-backed project’s treasury has added at least 5 million carbon offset tokens since late November 2021, bringing the total to 14.5 million at the time of writing.
Its offsets are tokenized and linked to Polygon (MATIC) in the form of Base Carbon Tonnes (BCT) by Toucan Protocol and new MCO2 tokens by Moss. They were first added to the treasury on January 6. KlimaDAO now has the majority of the 17 million BCTs in existence. The decentralized autonomous organization (DAO) is spending up to $100 million on offsets.
Most of the $100 million used for buying offsets comes from the sale of bonds that are used to increase the funds that are available to the DAO. The users are incentivized to acquire bonds by getting discounts on KLIMA, which is the native token from the project. On January 6, the DAO increased the discount on KLIMA bonds to help in raising more funds required to acquire more offsets.
The DAOs quick acquisition of carbon offsets has now caught the attention of the traditional carbon offset company Gold Standard. CEO Margaret Kim quickly criticized the DAO in the Wall Street Journal, indicating that 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.”
The KlimaDAO team responded to Kim’s fears by saying:
“There are ways to provide assurances without being doxxed.”
Being doxxed is described as revealing an anonymous individual’s real identity. KlimaDAO founder Archimedes also commented on this issue of anonymity and trust in one of the January 10 episodes of the 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 said that traditional companies like Gold Standard “may need more regulatory clarity into how a DAO works legally” to be more comfortable with the huge growth in the project.
KlimaDAO team seems poised to take on the challenge that is associated with carbon offsets on the blockchain for the long term as it stated:
“We are prepared to do what it takes to make the DAO successful.”
