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  • Writer's pictureKlimaDAO

Introducing KLIMA: an algorithmic carbon-backed currency


The KlimaDAO logo on a background of ocean waves shot from below

The problem

In our market economy, the invisible hand works to create prosperity and individual self-interest prevails. The freedom to produce and consume as we see fit generates value for the economy; value that allows the whole of society to prosper.


We generally consider that the market itself is rational, and assume that it values things in a perfect way. We ignore the paradoxes in front of us everyday. Water, a necessity for life is essentially free across (much of) the world; diamonds have no real utility for us, yet in the free market they are priced exorbitantly, excluding all but the world’s richest.


According to the market, Amazon is the world’s most valuable company. But the Amazon Rainforest has no market value until its vegetation is cleared for farming, and its trees are stripped of their greenery and extracted as logs. In the past, the market price of a good was determined by the socially necessary labour inputs required to create it. In recent times we have moved to a system where subjectivity and speculation are key driving forces behind prices.


For many, the ‘marketplace’ is no longer a place where two people physically exchange goods or services. It is where we buy securities, that we will never touch, that we often do not understand, in order to grow personal wealth. Value has become detached from the market. So much so, that when a good or service destroys value, sometimes immeasurably, there is no penalty imposed by the market.


Carbon dioxide is a greenhouse gas that inhibits our planet’s ability to let heat escape when it gets too stuffy down here. Carbon dioxide’s effect on our global climate is already leading to change in our planet’s most vulnerable ecosystems: it is bleaching coral reefs; melting the permafrost beneath arctic tundra; leading to the desertification of the tropics. There’s no punishment by the market for emitting carbon dioxide.

What we truly value, is not being valued by the market.


The solution

Climate change is the number one issue of our generation. Carbon dioxide knows no borders, nor do the impacts of global warming. The only way to tackle global warming is by mobilising action at the global scale. The market is the best solution we have at our disposal to achieve decarbonisation of our existing economic activity, and to retrospectively capture and store the carbon we have already emitted, at the scale required.


Markets are dynamic and more than a place of exchange, they are a manifestation of our culture and our time. So through organisation and co-ordination we have the power to modify them to reflect what we need and want. If we want the market price to be a fair price of what we value, then we need to move the goalposts and force it to work to the parameters we define. A perfect market should price in carbon.


To properly value carbon, we need to fully integrate the carbon market with the market, and we need to reward participation for those who participate in the carbon market with value or influence, or both.


Web3 is the perfect place to integrate these markets, it is a place where there is sufficient liquidity to have impact at scale, where smart contracts can securely and transparently govern transactions, and where contributions can be fairly incentivised.


KlimaDAO

KlimaDAO gives Web3 builders and users the opportunity to participate in the carbon market through the KLIMA token. KLIMA tokens are fungible, are backed by at least 1 Verified Carbon Unit* in the KlimaDAO treasury, and holders of KLIMA will have the ability to vote on KlimaDAO policy.


The role of the DAO is therefore to be the DEcentral bank governing the monetary policy of this new form of money. Over time, we will build an economy around KLIMA by driving adoption and unlocking growth of the crypto-carbon economy.


By developing KlimaDAO as a transparent and opensource infrastructure, participation from Web3 developers, carbon projects, and climate experts will be welcomed, to both build this new economy and be rewarded for their contributions.


Join our Discord and be an early contributor. Blog reference.


*KLIMA will initially be launched with a 2:1 ratio — meaning 2 tonnes of carbon will be required in the treasury to mint 1 KLIMA. This is because today’s carbon supply is imperfect, and it’s not always easy to know if 1 carbon credit really represents the mitigation of 1tCO2e. Initially, we will overcompensate. In the long-term as certainty around the quality of carbon supply improves, KLIMA holders will have the opportunity to vote on decreasing this ratio.




Disclaimer:

The information provided in this blog post pertaining to KlimaDAO (“KlimaDAO”), its crypto-assets, business assets, strategy, and operations, is for general informational purposes only and is not a formal offer to sell or a solicitation of an offer to buy any securities, options, futures, or other derivatives related to securities in any jurisdiction and its content is not prescribed by securities laws. Information contained in this blog post should not be relied upon as advice to buy or sell or hold such securities or as an offer to sell such securities. This blog post does not take into account nor does it provide any tax, legal or investment advice or opinion regarding the specific investment objectives or financial situation of any person. KlimaDAO and its agents, advisors, directors, officers, employees and shareholders make no representation or warranties, expressed or implied, as to the accuracy of such information and KlimaDAO expressly disclaims any and all liability that may be based on such information or errors or omissions thereof. KlimaDAO reserves the right to amend or replace the information contained herein, in part or entirely, at any time, and undertakes no obligation to provide the recipient with access to the amended information or to notify the recipient thereof. The information contained in this blog post supersedes any prior blog post or conversation concerning the same, similar or related information. Any information, representations or statements not contained herein shall not be relied upon for any purpose. Neither KlimaDAO nor any of its representatives shall have any liability whatsoever, under contract, tort, trust or otherwise, to you or any person resulting from the use of the information in this blog post by you or any of your representatives or for omissions from the information in this blog post. Additionally, KlimaDAO undertakes no obligation to comment on the expectations of, or statements made by, third parties in respect of the matters discussed in this blog post.

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