Tokenizing carbon credits: moving the offset market onchain

Transcript

GM GM welcome to web3 Academy your trusted source for relevant and legitimate web3 information so you don't fall behind the internet Revolution I'm Jaybird and I believe that web3 is going to change the world that's why I'm here to guide the world's top talent down the rabbit hole as you contribute participate and capitalize on the opportunity today we are talking about clima dow we're talking about how do we fight this massive problem of climate change and one of the ways to do this probably the best way if you listen to this episode is through carbon offsets

now the carbon offset Market has huge problems of inefficiency of lack of verification and Trust what do we know what does blockchain do it makes things more efficient it allows trustless which means that you don't need to bring in third parties to trust you can just trust and so clima Dao is bringing the carbon Market on chain and we're going to talk about how they're doing that and how this is going to really change the world this is going to possibly be a massive solution for climate change what's incredible is everybody keeps

asking what the use cases are for web3 like what's the real use case like we know crypto we know D5 we all get that a lot of us are using that and it's fantastic and it works but that's the monetary Revolution everyone wants to know what's the internet Revolution how is web3 going to change the internet give me a real use case well today's episode is going to give you exactly that not only is this a real use case today's guest atmosphereful says that his belief is that this the carbon Market is going to be the largest onboarding ramp for new users in web 3 in 2023 so you don't want to stick

around to the end to understand how that's going to happen and why he's projecting that that's a bold statement we don't talk a lot about the carbon Market being the one that's going to onboard users but when he breaks down the way that they are presenting a new form of a Marketplace on chain and what that enables you'll definitely understand so today joining us is atmosphere full from clima Dow he is a head of engineering there he's worked in the carbon market for several years as an engineer and an entrepreneur and he's focused on building a new product to Cleveland Dow which Launches on April 4th and that is carbon Mark and so he'll

be spearheading carbon Mark as he likes to say he he's here for the carbon not the crypto this is a must listen episode if you ask me because we need to deal with climate change and at the beginning of this episode Atmos is going to break down exactly how bad the problem is and how it's exponentially increasing the problem itself it's only going to get worse and worse if we do not act and we must act and this episode presents a way that we can all act either as individuals or as organizations so you're going to enjoy this one thanks so much for listening in everybody before we do jump into this episode we need to take a minute to hear from our sponsors who make this show possible

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the form front of web 3 sign up for segments wait list today with the link in the show notes below shared ownership is a game changer and we want you to be there first atmosphere fall from clima Dao welcome to the show so excited to have you today hey Jay thanks so much for having me this is gonna be an awesome episode one I've personally have been very excited for for a long time because obviously I care deeply about climate change and protecting our planet and clementaus I've been following you guys you guys have just been shipping and doing so many good things so let's start the show there what's the mission of clementow why did you and a bunch of people get together when did you get together to

start clementell good question so there's so much to unpack the dials like you said doing we're shipping like crazy we're doing so much but the overall Vision the kind of Guiding Light for us we want to accelerate delivery of climate Finance to sustainability projects right so how we're doing that we're scaling carbon markets and we can unpack carbon markets in better detail later on but really we're trying to build liquidity on chain we're so tokenizing carbon assets we're aligning incentives so that quality carbon can come Unchained so people have access to it you know so ultimately sustainability projects worldwide get greater access to finance we can fight climate change incredible incredible and we are going

to dive into some of these topics deeper but just let's just stay at that high level in Cleveland now for a second I should ask it clean it out or climb a Dao CLE Madel why the K where does it come from It's Greek it's Greek for climate yeah that was a shout out to Archimedes who for coming up with that name shout out darker you're the first person to ever give a shout out to Archimedes okay take us back just for a second to the origin of clima Dao when did clementao start and maybe what have you guys achieved today at a high level I know you guys have done so much but just give us some high level numbers of what you've achieved today so I guess we were basically a bunch of entrepreneurs

working on different projects in the carbon market and D5 spaces and we came together because we all sort of saw the same opportunity here we saw the real advantage that went three in T5 can bring we saw an opportunity to align incentives using protocols in the same way that Olympus did and it sort of incentivized carbon to come Unchained that way so that's where it all started and it worked and we've brought so far 17 million tons of carbon or carbon liquidity into our treasury as a doubt but we've got about 40 full-time contributors working with us and many anymore working part-time or taking bounties wow yeah so more impact than any of us could have imagined within you

know the last year and a half I think total there have been about 25 million credits tokenized and keeping my ego in check but I don't think in shift this would have happened without clementaus so we're very proud of what we've accomplished now the focus is more on building out the tooling making it easier for people to interact with what we're calling the digital carbon Market okay we're going to jump into how you guys are building out that Tooling in this really exciting new launch that you have and breaking that down in this episode but first I just have to ask your name atmosphere full so you're anonymous which is you're the first Anonymous person ever to come on the podcast so it's kind of exciting to have an Anon surprising that in web 3

you're our first Aenon in a way where does the name atmosphere full come from Great Name by the way I wish I had a good origin story really it came through I needed something climate related I needed to get on Discord they told me hey we're doing this Anonymous I said all right if you say so and uh this is what I came up with so yeah I appreciate you guys letting me come on Anonymous it's a little awkward for me I'd kind of rather be here with my real name and you know it's not like I have anything to hide but the anonymity for me it's really security through obscurity it's peace of mind I get the feeling I have a Target on my back as a developer for a treasury that has so much carbon and you know usdc in it so that helps me sleep

at night knowing I've separated my person from my online profile and of course there's like this Spirit of trustlessness of privacy you know don't trust verify it's all on chain it's all driven by smart contracts so you don't need to know who I am obviously you've dedicated yourself to climate change and fighting climate change for even before you joined clima Dao but you obviously really care about the climate and I think we all do but we don't all necessarily it's not top of mind for us right we don't necessarily day-to-day understand or really have the ability to put into words what the issue is with the climate so just let's set some content remind us of how serious this problem is with the climate and what the

potential disastrous outcomes are if we don't act yeah thanks for teeing that up because it is really important and I think I'll try and frame it in a way that we can actually connect to the solutions to climate change and then to our solution to climate change so very very top I mean climate change is the ultimate environmental issue at a time when we have the law of environmental issues right deforestation biodiversity plummeting everywhere oceans acidifying desertification soil degradation on and on and on all of those issues are exacerbated by climate change so we can't solve anything until we solve climate change in that sense it's priority number one but there's another

a detail that I think needs to be mentioned more and it's the negative feedback loop of climate change it's the idea that we're not just facing a warming Planet but we're facing runaway warming that's what's really scary and why you know I wanted to stay focused on climate change in my career so let me just highlight what those feedback loops are for those who maybe have never heard of this concept so the first feedback loop is Arctic sea ice we're emitting carbon we're enhancing the greenhouse gas effect atmosphere is warming so ice is melting but ice reflects sunlight so When there's less ice the rate of heat absorption in the ocean increases so the rate of ice melting increases so there you have a positive feedback same thing

with thawing permafrost right permafrost is basically Frozen soil Frozen biomass as it melts it decomposes and releases methane and methane is 20 times more potent of a greenhouse gas than CO2 so the rate of permafrost melting is increasing as a feedback loop same for ocean acidification I don't think a lot of people know that the ocean is actually the biggest carbon sink so as atmospheric CO2 levels increase the ocean is absorbing an increasing amount of those but it absorbs it in the form of carbonic acid which reduces ocean pH so this is disrupting the biology of the ocean and the natural chemistry of the ocean in

complex ways that actually lead to more warming Forest degradation of course forest fires desertification of forests pests causing uh Forest degradation even without human intervention so obviously less forests less carbon absorption and then the fifth feedback loop is water vapor so as temperatures rise we have more evaporation humidity increases and the greenhouse gas effect gets stronger so these are sort of five feedback loops that we really don't want to mess with it's a problem we aren't just dealing with humans emitting carbon but we're really rolling the dice on setting off a chain of events that we can never undo and that's why I think climate change is so scary and so

important and that also relates to Solutions before we jump into Solutions sure I just want to come back to what you said is basically these five feedback loops as you call them are exponentially becoming worse so the more time that we do not act then the faster climate change is going to happen and the more natural disasters the more issues the more impact on our planet is going to take place so it's not only is it getting worse every day it's getting exponentially worse every day so as you said it's putting us in a position where

we might never be able to reverse it I think it's one of the reasons why a lot of people shy away from talking about it because right now I mean I get a feeling in my gut that's like it's so scary that I think it makes a lot of mainstream people sort of say but I'd rather not think about that that's just too scary it's amazing how serious the problem is that I'm sure our listeners are feeling the same way right now just really gut-wrenching terrifying position that we're in but that's why we have clemadau and you on the show today is to tell us okay so let's go to Solutions as you just brought up how do we fix this how do we act well I mean because I highlighted the fact that we're really rolling the dice here the longer we wait

I think that highlights the need to act now and not wait for technology to save us so there really is a sort of techno savior mentality in a lot of climate Solutions discussions where whether it's nuclear fusion or waiting for the cost of solar to fall low enough or you know new battery Tech to come out like at some point the technology will be there to reduce our carbon emissions but we're really playing with fire waiting for it you know and so to understand you know what the optimal climate Solutions are we just sort of unpack the type of problem that climate change is so I kind of highlighted the need to solve climate change but there's

some Nuance here and and climate change is a really unique problem so I think obviously human emissions of greenhouse gases are causing climate change there's no debate about that anymore and it's mostly from energy consumption it's also from Agriculture and some other subcategories but mostly energy consumption and so you have to ask why are we consuming energy we're doing it to maintain a high standard of living that's really it if we burn energy to keep our houses warm in the winter and cool in the summer and we burn energy to travel further and faster and more comfortably and to eat better food you know so that's why we consume energy we already can frame this as an economic problem right it's a global development

problem it relates to our standard of living and the lifestyles we live and the things we buy it's an economic problem so it's not really a behavioral problem or a scientific or technological problem it's it's the perfect example of something called an economic externality and I think that's a word I'll use a lot in this podcast that I hope people get familiar with so what is an economic externality it's a cost that's incurred on someone outside of a transaction let me give another more simple example of an externality lead in gasoline at some point we discovered that putting lead in gasoline had a lot of economic benefits if I remember correctly engines run better they don't knock as much and I think you get more mileage out of a

gallon of gasoline so that's pure benefit you could pay more to put lead in your gasoline right you might even save money doing that so there's an economic benefit but there's a cost to people who aren't in that transaction so not me paying for the gas and not the gas companies selling me that gas but the person on the side of the road who's breathing that leaded gas fume right suffering from brain damage stroke cancer whatever lead poisoning and those economic externalities costs like trillions of dollars to the point where most countries just outright banned leaded gasoline so the point is lead and gas is an example of an economic externality that's really similar to the one we're dealing with with climate

change right right and the key is capitalism doesn't solve externalities on its own that's why they exist in the first place right they require regulation the person buying the leaded gas the company's selling it neither of them would have decided to stop right it's only government who can step it the benefits were huge like trillions of dollars in savings and countless lives saved Etc so climate change is the same but it's also different in a way climate change is harder to solve than leaded gas in economic next rallies already they're already really hard to solve because they require political coordination government has to step in you got to get politicians aligned and the people who are making the money are going to resist it of course the gas I'm

sure the gas companies resisted and even the people buying gas we're too happy about it the ban so same with climate change but climate change is a cross it's always called temporarily distance across time it's not the externality isn't a cost on the guys standing on the side of the road it's a cost on a future generation right people who might not even be born yet are going to have to pay the cost of sex reality and it's also geographically distant so we're talking right about an issue that spans borders and we're talking about impacts that will affect different countries differently poor countries will be impacted way worse than rich ones and rich countries if we decide to

tackle climate change we'll have to pay more right they'll suffer more of the impact of solving climate change so there's sort of a mismatch here right a conflict of interest and of course it requires countries to cooperate despite those conflicts of interest so that I hope I'm doing a good job of illustrating like this unique economic theory behind climate change and then maybe can try and tie in the solutions right I was going to say so you scare me even more that's because of the economic externalities it's even harder to deal with because as you said the people who need to deal with it aren't the people who are involved with it every day and

necessarily aren't the ones that are impacted by it and so we need to work together we need to do things that we are not good at doing currently and that our Tech is also not set up to do well so does that lead us into discussion of what do we do how do we solve this give us a light at the end of the tunnel sure here we go so obviously we need to internalize the externality like I mentioned with letic acid we need government to step in so the most efficient solution if you ask climate economists carbon tax so you literally calculate how much does this cost as an actuality and you make people pay maybe a fixed tax on every ton of carbon or maybe you know there are a bunch of ways to spend this but right slightly less efficient you might do something like

cap and trade so you set limits on carbon and you make people buy credit it's and trade them if they exceed their limits or sell them if they don't use up their limit and then of course there's top down regulation you could just ban carbon emissions which probably will never happen and then less efficient you have things like government subsidies so that means paying for positive externalities like maybe the government's putting up money for electric vehicles and for solar panels not really tackling the problem itself but trying to combat it in other ways but the bottom line is we have to make polluting more expensive otherwise we'll never solve the problem and right we have to internalize the X and I so this is why I'm so excited

about carbon offsetting which I think it's it's a weird thing to hear right people don't say that very often like they're excited about carbon offset and they're like really am why I'm confident I still have faith we're gonna see the government regulations we need and we're going to see that International cooperation like people are working on this but even when we do it's not always going to be possible to eliminate all your emissions it never will be there's always going to be carbon emissions and so that begs the question right like what if companies want to internalize the cost of their emissions even before the regulations happen but also after right what if like investors and asset managers want their portfolio companies to do that what if consumers

are demanding that the things they buy are carbon neutral or carbon negative we're like What if people are willing to pay more for carbon neutral I think this is where offsets fit in so so offsets make all of that possible and in summary maybe someone doesn't know what an offset is I should probably Define it really quick and offsets of credit that represents verified removal or avoidance of one ton of carbon emissions if you want to go carbon neutral you can bike and you can't reduce your emissions which most people will never be able to do you pay someone else to do it for you and you creating this unique economic incentive that's never existed before that I think is so exciting like it's now possible for conservationists to be profitable

usually conservation is a cost or it's charity right but now it's actually you can create a business on selling carbon right carbon offsets you can find all these unique points in the economy these little inefficiencies where we can effectively reduce emissions that otherwise wouldn't be reduced and we can sell those as offsets and so companies have a really efficient cost effective way to support you know emissions reductions and conservationists whether it's Farmers Forest protectors you know people capturing methane emissions like there's a bunch of offset examples I can give here in a sec yeah but for the first

time ever these people are able to sort of profit off of conservation and this incentive is going to drive more and more and more and that's why I'm really excited about it let me summarize and see if I understand what you're saying so we need to internalize an economic externality because if we don't internalize it then there's no reason to act for the companies that are creating the biggest issue here of climate change and in order to internalize that economic externality there's a few ways that that could happen government intervention they could say You must offset your consumers could demand that you offset so it could come from a bunch of different angles but either way it needs to be internalized where it

becomes as you said and it's interesting to point out that this is an economic issue it needs to become more expensive to pollute than to not because that's the only way that we're going to see action actually take place that's going to cause the change that we need and that action will take place through carbon offsetting which you explained briefly so let's talk about unless there's anyone out in here but I think the next a tag way here interrupt real quick and point out that as sort of offsets kind of tackle things on both sides because they do yes if companies are volunteering to offset they are paying more so they have an incentive to pollute less and this usually happens through like trade organizations you'll

see like the airline industry has created a sort of industry-wide framework that requires their the airlines who participate to offset so there's that bit you mentioned that's the polluting being more expensive but then it offsets also cover the other side which is like the positive externality if you're paying to internalize that actually where does that money actually go well if it goes to conservation projects if you're tackling the issue from both sides that's what's pretty cool about offsets right yeah very interesting because essentially what we're saying is polluting less is just not a solution that we're capable of and we don't need to get into why and our need for more and the need for a better lifestyle we don't need to talk about that you talked

about that briefly at the beginning but the solution is as a business to offset and when you Offset you can do that yourself but more likely you're actually putting money in somebody else's hands where they can conserve and create Limitless amounts of projects that can be positive for the planet yeah again just to cover my ass here like reducing emissions is always number one for shift but it's just not possible to reduce all your emissions and this is when this is when you offset we're all going to stop Flying we're not all going to stop using Tech we're not all going to stop heating our houses using cars so right okay so tell us about the current structure of the carbon

offset market like how does that work and maybe you can give us an example you mentioned Airlines like you know maybe there's an example of delta or Southwest or an airline of how they are doing it I guess I'll start from the perspective of the project developer so this is like the person who is creating the carbon offset and selling it and so they're the one really on the ground doing the conservation I think a really clear the easiest example to highlight is landfill gas capture so okay I don't know if you knew but landfills they actually reduce a lot or they emit a lot of methane and that's just from decomposition of trash and it's not that expensive to actually drill in and set up infrastructure to capture that methane before it's

released into the atmosphere but again economic externality landfills have zero incentive to do that and less regulation happens which it is starting to happen thankfully but you know for the places where there's no regulation right right what if you could just go and pay these people some money to start capturing their method well that's exactly what landfill gas capture offsets do so just to kind of high level summary the way it typically works is the someone will identify this opportunity they'll say hey we're not capturing this landfill gas we could probably make some money selling doing so and then selling that as offsets and so they'll work with a financier who will put up the money to help them install to help them get

verified and this verification piece is really really key you have to prove you're actually capturing that gas and you have to calculate what that is in carbon tonnage equivalent right to do so you you work with third-party non-profits the biggest one is Vera they have like rigid methodologies that they've defined there are a bunch of others and these often operate as kind of Registries to sort of distribute your carbon offsets once you're verified and so you know you'll work with your financier you'll get registered you'll get on Vera's registry they'll they'll finally approve you and send you your offset credits and then you're free to sell them and so you know the finance

year probably has a claim on most of those so they'll probably take it from there and then hopefully they're able to make a markup as well and you know everyone's happy finally the person who's offsetting maybe it's Delta Airlines maybe it's a customer of Delta who checked that box that said I want to offset display and they'll consume that offset credit and they'll do what's called a retirement which is basically destroying that offset so no one else can ever claim it and so that time has been claimed it's been used and the cycle is complete you see you have two sides to this Market you have those that are creating the carbon offset and then putting it onto the market and then you have those that are polluting the Delta Airlines that is purchasing the carbon

offset and then retiring it as except terminology is okay yep does this work the way this Market currently operates how big is this market like how many carbon offsets are flowing through how many dollars are flowing through so the voluntary carbon offset market and this is a kind of term I hadn't really fleshed out it's about a billion dollars which I think is pretty small actually it needs to be a lot bigger the compliance Market which is where actually like cap and trade you know carpet different types of government mandated carbon allowances or carbon offsets are traded is much bigger but this is in the market that climate I was interested in Cleveland I was interested in the voluntary part of the market

okay and so yeah again it's about a billion dollars it's growing really fast but it needs to scale up Define what you mean by voluntary so voluntary is basically there's no government step again saying you have to offset these are maybe trade organizations agreeing to do it or companies agreeing to do it to comply with their ESG goals these are like investors and you know the black rocks of the world telling their portfolio companies like you guys need to have a strong ESG and climate action plan and so companies elect for the emissions they can't reduce to offset so they'll go out into the market and they'll buy the offsets themselves and retire them voluntarily covering you know the amount of emissions that

they've decided for themselves to cover so how does this work actually it works over email and phone and I've heard it and sax I've heard I don't know if that's true but that's kind of the meme right like Okay so this this Market is in the Stone Age but it's pretty much yeah I mean and it's tough like I experienced this firsthand there's absolutely no pricing transparency if I you know someone's offering me a project they're saying I've got landfill gas capture tons that you should retire for your DSG and I'll charge you a hundred dollars a time right you have no frame of reference is that good or bad right so what you have to do is email a bunch of Brokers get a bunch of quotes you

know talk to other companies what are they buying what do they pay look on the like online storefronts that sell the often way overpriced offsets with huge markup right and you don't know like how much of that money ever went to the original project developer how many times has this credit changed hands right it's problematic the layers middlemen obscure pricing deals over the counter and then it's also hard to get on the carbon Registries like if you wanted to be a broker you wanted to maybe buy a bunch of carbon up front it's tough you got to go through these approval layers and you know you need to learn the whole Market inside and out also last bit no automation like the Registries don't have apis so as a Dev

it's like really frustrating if I want to even start like a carbon offset business or storefront I'm doing this by hand like I'm going on the registry and clicking through uis and then sending it to customers it's a nightmare so enter Cleve Modell yeah I was gonna say okay great lead-in we've got this Market that is the best option for us to fix climate change and it's completely inefficient it's not verifiable it's impossible to become a part of it and so we desperately need a solution I don't even think we need to explain how it would be like if you wanted to enter the stock market and the only way to buy a stock was to like send an email and then

you had to call a bunch of people to verify that that stock was actually the stock you're getting and you couldn't actually trust it you didn't even know the you know I can't even imagine like it's just crazy that that is the case of this market so enter Cleveland how do we solve this how are you guys solving this imagine a world where all these carbon offsets are on the blockchain you can see exactly who was buying and selling what price they were paying if you had a wallet you could walk up and press send and the transaction would execute in the offsets with d in your wallet or you know send another transaction and instantly retire those offsets that was sort of the vision we had I think a lot of us saw that but there are huge question marks like how do we get there

and so this was like back in October 2021 the way I like to tell the story is there is this huge Death Star laser beam of capital called D5 and we kind of aimed it at the carbon market and it worked and so that sort of Death Star laser capital is like it was basically the Olympus model we were a fork originally of of the Olympus protocol we looked at their incentives we saw how they were sort of incentivizing liquidity and incentivizing users to put liquidity in their Treasury and we said this is it right this is how we bootstrap this market and incentivize tons to come on chain and that's what we did right so the state of the market now where essentially the sole reason that

liquidity and demand exists for a bunch of carbon says and right now the assets you can get on polygon are the base carbon ton the nature carbon ton the universal basic offset the nature based offset and the Moss mco2 forestry tokens and there's millions of dollars of liquidity for these now 25.4 million tons of carbon have already been tokenized and 17 million tons of carbon or carbon liquidity are in our treasury in climate house treasury so that's equipped 70 million times is like half a billion liters of gas worth of carving wow it's a lot so the impact's been huge but it's been a really wild

ride but sort of the thesis work launch went well I mean we achieved the goal we wanted to achieve it's now possible for people to interface with our smart contracts we're writing tools that let anyone access these offsets retire them instantly you can now automate the whole buying selling and offsetting flow you know it's all open source it's all permissionless all you need is a wallet making it much easier for anybody to offset carbon in a verified way I mean it makes so much sense it actually almost smacks you in the face it makes so much sense one thing I'm really excited about because I kind of talked about the liquidity I haven't elaborated much on really how we pulled that off

but basically we've got the tons on chain we've got liquidity so we can handle a lot of volume of trade of retirement I mean now it's about sort of building the tooling out right so making the whole experience of offsetting better making it easier for like companies Brokers to get onboarded and start interacting with what we're calling now the digital carbon market and one thing we just launched that really is a huge step in this direction is a product called carbon Mark basically what this does is it lets Brokers and project developers list their tons directly on the market so anyone can buy them directly and they don't have to really care about what is a liquidity pool what is clima and what are these bonds and all this stuff that

we have this blockchain Momo jumbo they can just say I've got projects I know these are good tons I know what people want to pay for them and they'll put them up for sale and likewise buyers can walk up and say I want to offset this project this year this methodology it's all super easy and we're trying to abstract a way all the web 3 stuff as much as we can and really less web 3B the tech you know and focus on the offsetting right right which is something that we talk about so much on this show is you can't expect a person who is not a techie person to all of a sudden understand web3 in and out you need to present it to them in a way that just makes their life easier and they

don't need to think about the tech that's behind that they just want to be able to put their sell their carbon in an easier way right so let's focus on the sellers for a second on the seller's side right now a seller has to go get registered so are you eliminating the Registries are you working with them how does that work so we don't want to touch registry of carbon offsets so like verification of carbon this is a big rabbit hole and like tons of work's been done in this space tons of research goes into these methodologies you know proving that A Flores has been conserved or that gas is captured so we don't want to be The Gatekeepers of like so-called

quality of carbon offset or verification we really defer to The Experts for that so Vera and gold standard these were the tons we initially onboarded they have not been as receptive as we hoped I think they got a bit freaked out by the sheer volume of carbon we were pulling on chain and so they said basically you're not allowed to take tons off Bears so now what we're doing is we're working with more web 3 competent uh Registries so we were talking right now with Eco registry or Colombian registry mostly dealing with conservation forestry credits they've been awesome to work with really really cool projects and they're helping

us interface directly with the registry which should make it really easy for project developers to onboard their projects you know we're talking with all the pretty much every registry to try and do whatever we can to make sure that developers we want to bring or brokers who want to bring their carbon onto the digital carbon Market can do so do so safely securely easily right and so from the seller's side I can do it in a much easier way and I can access a liquidity pool without even knowing what a liquidity pool is necessarily like I'm basically I'm eliminating all the middlemen I'm sure who are probably taking a whole bunch of fees and a lot of money so by the time what that carbon offset gets into the hands of a buyer

who knows what percentage is actually going through whereas in your case with carbon Mark it's a direct interaction exactly so I mean of course we want to work with everyone like we don't want to put anybody out of business I think there's a lot of unfortunately that that is the nature of disruption something I I appreciate the sense into that well you know there's like a Venn diagram of Brokers and project developers and some of them aren't both and it's obviously more complicated it's not like we're just stepping on the toes of of all the people who've built businesses in this space and you want to make it easy for Brokers as well maybe project developers don't all want to be listing their tons directly they'd rather just do a deal with a financier

and wash their hands and be done with it on to the next one yeah but that is sort of the long-term Vision right I think people might see that they can just walk up to carbon Mark and get an instant price quote on a category of carbon offsets on the specific vintage here they're looking for and you know I think project developers might realize hey I can put my tons directly out here and find these buyers um right it's going to take time it's you know we have a lot of work to do before we get to that point let's talk about the buyer's side for a second so with something like carbon Mark who are you expecting that the buyers would be or even so far through what the work do you guys have done who have the buyers

been are you getting large organizations that are buying these offsets is it more individuals participating so we're kind of in this transitionary phase where we're you know game legitimacy within web 3 we've gotten a bunch of defy and crypto Works to offset you know huge volumes we've got polygon to offset their whole blockchain using us and we're working with groups like flight Air they're a small Airline that's buried kind of crypto oriented D5 oriented and they're going to be integrating CLE model retirements directly into their app so we're transitioning out and looking for legitimacy in the Market at large so we're after pretty much any organization who's willing to he's looking to offset and we're trying to show them that hey

look these tons are more traceable the pricing is more transparent it's easier for you to get access to these and you can automate with it so a lot of discussions ongoing still some work to do to sort of Polish the UI and make everything friendly and every day we're kind of dealing with new problems that no one's solved before related to like how do you get like a consultant a crypto wallet well what if their consultant has 10 clients do they manage 10 wallets for their clients right these sort of problems we're solving day by day really working hard to get there I hope they get a ERC 4337 wallet so that it's much easier to manage seed phrases we're doing a series on wallets right now so it's been interesting to go down that route hole but that's not the

purpose of today's conversation if you guys are listening go check out the series on wallets if you want to learn more about those and account abstraction of what that allows okay so come back to carbon mark for a second where are you at it just launched last week was it yeah we just sort of announced it last week I was hoping to be live by now but unfortunately bugs are there so we're squashing the last few books I think next week we'll see go live and we'll start onboarding Sellers and yeah getting people offsetting so pretty exciting very exciting what's the vision what's on the roadmap is carbon Mark the focus is the focus just to get more buyers and sellers onto carbon Mark are you building other things what's the roadmap moving forward yeah we want to

get obviously start seeing some volume come through carbon mark I think I'd really love to see some exclusive tons go up we're working on that you know that means by that projects that you can't find anywhere else but only on carbon mark because I think it's really neat to showcase the transparency side and the activity feed that shows trades you know you know knowing that this ton originates from the project developer or the broker or the financier themselves coming from the source I'd love to see that as a showcase so we're talking to a bunch of people and they're pretty much ready to go so hopefully we'll see that maybe in a couple weeks I'm sorry just ask one quick question about Miss are you building the interface in a way that makes that easy to see where I can see

not just that I bought this carbon credit but like this is where it came from and this is what the activity that that project is doing in order to create the offset yeah we've started really simple you know minimum viable product Approach at first and we just got a feed that shows when someone lists when someone changes the price and when someone buys and what we need to get in there is connect that to the actual originating tokenization event and uh we'll get there you know I think in a couple weeks or months we'll sort of close the old Loop so you'll be able to trace your ton of retirement back to even the original verification on the registry which is huge I'm sure it's

possible right now through the most inefficient as you said emails phone calls and maybe a couple faxes in order to get there whereas now you'll be able to do it you won't even need to do anything it'll just happen right it's huge what's so cool is I barely had to do anything as a dad like this is just what you get when you when you work on polygon you know right this is what you get when you work in web 3. it's awesome that's something that's worth kind of talking about I mean yeah expand on that we couldn't have done this with in web 2. like obviously a common web developer could build a sort of the equivalent of a token they could build like a centralized exchange or like a Marketplace they could do everything we're doing with web

2 like you know with JavaScript or whatever but they would need millions of dollars in liquidity right if they wanted to create a Marketplace at the scale that we have they would need to put up all that money themselves right you didn't have to do that we turned to D5 right they would have had to cross like regulatory banking hurdles to hold all those assets and all that money and lengthy bureaucratic processes right they probably have to get right off of Registries they'd probably have to talk to liquidity providers and money managers and etc etc we didn't have to do any of that we just set up the incentives and put up the smart contracts and the community did the rest right on the code side like I don't have to write complex Market making code and make sure that there's no double spending or going on or

anything like that I just used Primitives that have been tried and tested in deep fights Sushi swap pools you know erc20s that's it yeah it's incredible the power of open permissionless code open permissionless infrastructure I don't think we fully appreciate it yet because we're still so early we haven't seen I mean we're seeing it but we haven't seen it at the level that it's going to achieve I agree completely I think carbon is really this slam dunk use case I'm excited to see where people take this like I think there might be other asset classes I could not name one I'm sure there are it's just carbon is just such a perfect use case I'm almost I'm really

surprised no one had done it yet right I love it okay just to wrap up carbon Mark if somebody wants to use carbon Mark where do they go how do they check it out I would say follow us on Twitter carbonmark.com is our handle and you'll see the announcement come out in the in the next couple days I mean you know if you can finally poke around the marketplace and look at some projects when we launch we'll have I believe the largest variety of carbon also projects of any online storefront which is incredible and that's because cardboard Mark is a view of across all the liquidity pools all those tokens I mentioned earlier like pctn CTU prndo those will all be

available to the carbon Mark interface you know you'll see real-time pricing so you know you're getting the best price and we'll start onboarding Sellers and letting anyone you know list their carbon directly and at the price they choose incredible when you say it's the best use case you're accurate the thing is why isn't it a use case that's captured the attention of more people is it because climate change is just too difficult to understand and carbon offsetting is too difficult to understand is it that the individual doesn't participate in carbon off setting it's only you know a few people that have the control of these budgets at large corporations all of the above I guess yeah that's a really good question I mean crypto's going and through

sort of growing pains like we're getting over this speculative phase and people are really asking where are the use cases and so they're they're sort of dismissive of what clementa did because we took you know there were a lot of Olympus works and none of it really had solid use cases but ours did and it worked to pretty incredible effect building liquidity for carbon assets that's like a concept that people don't even know liquidity means right yeah Harbin assets how can you have carbon as an asset right in offsetting it's such a complicated thing you know so it's going to take time and it's also going to take a lot of work for me and my team to simplify this stuff to get the language right to figure out who that real target audience is for this stuff right moving away from

this degenerate crypto scene who birthed us into really legitimizing ourselves against other carbon Market players the Brokers the Registries it's going to be an uphill battle but I think that you know the use case is too strong and the value we bring it's too valuable so I don't think they could ignore us well and as you mentioned you have an issue where the existing organizations that participate in this market are scared of change naturally everyone's afraid of change change is a scary thing you lose control when you accept change and you've already found that with the Registries some of them not wanting to participate anymore because they don't quite understand

what's going on and so that's the uphill battle of building disruptive Tech and building disruptive you don't have buy-in in the beginning from all sides you often have sides that actually the opposite might happen and they might fight back or they might not want to participate so it's a challenge on so many levels which is why what cremadau is doing is so you know deep out tip my hat like salute Emoji you guys are really tackling such a big issue well said thank you yeah I mean again uphill bad a lot of work to do crazy story I think I'm glad I get a chance to come here to tell it yeah we are too we are too okay before we jump to a speed round

anything else you want to share today maybe you want to tell everybody to go offset some carbon I'm not sure anything any final thoughts I think I pretty much covered it you know I hope I did a good job of sort of weaving the story from climate changes to problems the solutions that you have economic externalities and then how it offset works and how an offset fits in and then of course how we enhance carbon offsetting it's a lot to unpack you know but I would just say yeah people should check out our clean medal official Twitter and carbon Mark Twitter they say want to learn more or content team is doing a really good job of unpacking these topics and we've got some serious big brain carbon Market experts on the

team trying to help people get up to speed so yeah check it out if I want to go somebody's listen to this and they're like oh I want to go off I'm inspired atmosphere full thank you I want to participate can anybody go to carbon Mark and offset carbon soon right now we've got our what we call the retirement aggregator this is like a little janky little UI we've been slapping features on over the last year that allows you to do a bunch of stuff like offset carbon for out of any token starting with usdc even with credit card actually you know so you can offset whatever you want you can browse the projects and pick the one you like and offset with that one and any of them a dollar or a hundred dollars any amount

yep exactly and then we've got these climate pledges so you can actually connect those retirements and offsets that you hold to a little dashboard that you can share and show people like your progress towards your climate goals you know so we're really just showcasing everything you can do proof of concept effort proof of concept and cargo marks going to be the way we kind of Polish them all tie them all together focus them on on the Right audience but yeah you can do everything already oh that's at app.cleanthedral.finance we'll see the offset tab there I believe we just launched the bicarbon tab so now you can actually look through all of the projects that are on chain and then buy them with usdc and put them in your

wallet and that might come in handy if you want to become a carbon broker and you see some good value carbon that you want to you know maybe set up a storefront on carbon mark there you go wow fascinating so many layers okay we also were going to talk about the Dow and what it's like to participate in the Dow but we've taken up the full episode today not surprising with the topics that we've already discussed so we're gonna skip the Dow this time but I am curious maybe in the future we'll get you back on Atmos and talk about what it's like working in a dow and the challenges of benefits of it I know you guys have had you know both your challenges and you've had great wins coming out of working in a dow compared to a traditional organization

so in the future we'll get you back for that sure I'd love to let's do it okay speed round coming at you some final questions first what's one prediction for the year ahead for 2023 ooh prediction I think the digital carbon Market is going to be like the single largest source of new users for defy and blockchain I think wow that the people who are coming at the end of 2023 that the new user is the first time crypto users I think most of them will be showing up because they want carbon they want to offset they want to put up their projects for sale they want to participate in the digital marketing because again I think it's just such a slam dunk use case

wow bold hot take big prediction coming at you okay next a must read book must read book climate casino by William nordhaus he was like a Nobel Laureate 2018 for economics and he just does this amazing walkthrough on climate science and climate economic modeling and the policy solutions that I talked about so everything I was rambling about as far as economic externalities and policy Solutions and offsetting he discusses and explains much better than I ever could so definitely a must read book okay favorite AI or web3 tool to increase productivity this was a tough one because I think mostly my tools are

all JavaScript I think you know just straight up writing code but like I guess I'm really happy with Taurus wallet we talked briefly about the usability of web3 this is like we're exploring with moving users as far as Taurus and so far I've been incredibly happy this idea of a social login that everyone's familiar with like Google but then getting this crypto wallet maybe for a lot of users your first ever crypto wallet and being slowly introduced to these Concepts like an address and a balance Etc this is what something I'm really excited for Taurus so I think people should check that out okay wow we should have gotten Taurus in our wallet series we'll be sure to link to that one in the show notes as well

okay last question if you had a billboard that one billion people were going to see what would you write on it bullish on offsets this is nice no one's saying that nobody's saying that they will be they will be after they listen to this show Abbas thank you so much for joining us today and thank you for you and the whole team for all your work you are taking on a massive project that is just a huge win for all of us and yeah I can't imagine the challenges you're facing along the way so thank you thank you thank you thanks so much for having me this is really fun thanks so much for listening and everybody have a

great day thank you for listening to web3 Academy we hope this helps you along your web 3 Journey if it does please share this episode And subscribe so you don't miss the next one nothing in this podcast was Financial advice crypto and web 3 can be risky you can literally lose it all in fact if you invest on account of what we say you probably will lose it all so don't do that in all honesty the point of this podcast is to remove the noise of markets and price and focus on utility and documentation anyway so you should not take any of this as Financial advice thank you friends and see you in the next one