Published Mon Mar 14 2022
While the four weeks of February were packed with positive KlimaDAO developments, value action for KLIMA and the markets in general continued to be decidedly bearish. We could point to a number of macroeconomic issues to explain this; however, our focus is on continuing to develop KlimaDAO as the heart of a more inclusive carbon market. The DAO contributors remain passionate and committed to achieving long-term success.
The DAO’s redesigned website is primarily aesthetic and educationally focused at this point but lays the groundwork for major integrations. Additional upgrades coming soon include the Mobilum-powered fiat onboarding widget, the Klima Infinity dashboard, and our innovative carbon credit retirement function. These additional features will be book-ended with comprehensive educational resources to help both new and existing Klimates deepen their KlimaDAO experience.
Klima Infinity was launched with five partners. The integrations with these first partners will be phased in over the coming weeks while onboarding further Klima Infinity users on a rolling basis. Klima Infinity has attracted positive attention in traditional carbon market circles by offering transparent, permissionless, and real-time carbon footprint offsetting. The service resonates with those frustrated with the inefficiencies of the legacy market.
A broad effort was undertaken to develop KlimaDAO’s branding and communications practices. Several contributors have professional experience in these fields and have produced beautiful and insightful work. Our Partnerships Team is busy pitching Klima Infinity as well as establishing working groups with interested parties to develop these relationships. The following is a brief overview of recent partnerships:
February 2022 ended with KlimaDAO having more than 16 million carbon tokens (US$64 million) in its treasury, which surpasses Kenya and Ghana’s 2020 carbon emissions. Although this is a huge feat compared to the 15 million tonnes stored in January, the growth of ReFi has been slower than expected. KIP-14 was voted on by the community so that KLIMA supply inflation can be optimally adjusted to match the current growth of ReFi and allow the ecosystem time to expand without stressing the protocol.
While the KlimaDAO treasury continues to attract capital in the form of carbon tokens (as shown in the rise to 16 million discussed above), and the Treasury Market Value (TMV) stands at about US$92 million, the current bearish market values all KLIMA in circulation at US$67 million, giving a TMV/Market Cap ratio of 137.85%.
Although carbon custodied per KLIMA has stagnated throughout February mainly due to premium reduction from bond recycling, index-adjusted CC/KLIMA increased gradually.
The Klimates voted on several KIPs (numbers 10 through 14) in February. With rapid development but declining token value the DAO required more funding, a request which passed in KIP-10. TCO2 conversion to allow for repurposing BCT to NCT (KIP-11) passed but this was a moot point as the rebalancing had already occurred. In KIP-12 the DAO published a well-defined plan for defending the value of KLIMA by utilizing inverse bonds.
With the DAO moving toward a liquidity management model centered around KLIMA:USDC and carbon tokens paired with KLIMA, KIP-13 approved the liquidation of 25% of the BCT:USDC pool. Finally, KIP-14 reduced the APY to about 1000% in order to slow down protocol inflation while the broader ReFi space launches additional protocols and increases demand for on-chain tokenized carbon.
While market challenges abound, the DAO contributor team has continued to execute passionately on our mission to fight climate change. Many people have been alarmed by the latest IPCC report, which underlines just how urgent the climate challenge is. Every little bit helps and we continue to be empowered to build a more efficient carbon market, helping drive value to those who are working hard to create a greener, more sustainable planet.
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