 Welcome everybody to the general meeting of the Hyper Lecture Climate Action and Accounting Special Interest Tube on March 22. Today we have a special guest presenting to us, John from Touken. But before we jump into his presentation, we will give new members the chance for introductions. Lars, as I saw that you joined the quality, do you want to go first? Sure, happy to do so. My name is Lars Kreily. I joined Chia Network recently. Before that, I've been involved in the carbon sustainability renewable energy world for about 15 to 20 years. That includes creating some of the standards that we're familiar with, as well as running the environmental division for the company APX that built most of the electronic industries for the various carbon programs and work programs, as well as developing carbon projects, ESG strategy and so forth. So relatively familiar with greenhouse gas accounting, all of those things, relatively new to the blockchain world. Oh, that's amazing. Thanks for joining, Lars. Absolutely. Is there anyone else new to this call? If not, I want to mention that this is a hyperlature call. So the anti-trust policy notice is in effect, as well as the hyperlature call of conduct. Please read through them if you haven't already and follow them. So, John, John leads the ecosystem development in Touken and Touken provides an open infrastructure for carbon markets running on public blockchains to finance the highest impact climate projects. His other work is focused on the application of spatial data technologies with consensus economy and connecting dots in a community, building a brighter future for humanity. Since Touken launched in October 21, they have already breached 18 million tons of CO2, which accounts for roughly 5% of the VARRA registry. John, thank you so much for making the time today and I'm very much looking forward to your presentation. The stage is yours. I stop sharing and then you can go ahead and share your presentation with us. Great. Thank you so much, Robin. Thanks everyone for having me. I'm going to go ahead and share my screen, which I think should be here. Can everyone see the building for regenerative future? Great. Okay, great. Well, thank you again so much for having me. My name is John. I go by John X across the cryptoverse. My real last name is John Hoops, but it's crypto. It's Club 3. I'm here today to talk a little bit about how we're approaching building for regenerative future at Touken Protocol. Touken is a product I've been involved with since last May before launch. We are building infrastructure, digital infrastructure to scale the world's carbon markets in a very high integrity way. I'm going to talk a bit through the context of what regenerative economy, regenerative finance is, and then dive a bit into the specifics of the Touken Protocol, which is really mainly setting up for this bigger question and pulling back the curtain on what we see as the opportunity and the responsibility we have here to redesign the way our financial system works to serve the earth. This is a very casual thing. I'm absolutely open to people cutting in asking clarifying questions, contributing. I'd much rather have this be an open conversation. The first 20 minutes, I do have some slides prepared, but don't feel like we need to stick to them. And then the second half of the chat we can get together and have a bit of a broader conversation. And I'd really especially love, so I'm not quite as familiar with the enterprise blockchain world. I've done some work with enterprise blockchain technologies in the past, but have been pretty focused on public blockchains for the last few years. So I'd be really keen, especially to get all of your perspective on the applications of some of these ideas in the hyperledger world. So let's go ahead and move forward into the talk. And then we will have a chat later on. Cool. All right. So at Toucan, we've built tools to bridge carbon markets onto public blockchains. And there's quite a long-winded explanation for why we do this and why we feel like it matters, which I'll take the next 10 minutes to go through. But the essence of what we're trying to do is create the capability to embed climate action into the fabric of our financial system. So this entails giving others the tools to build applications that benefit, that include this sort of planet-positive action as a sort of default. And I'll explain a bit what I mean. But Toucan specifically is an infrastructure provider. So we do not buy carbon credits. We do not sell carbon credits. We create the infrastructure that's required to tokenize those carbon credits and bridge them onto a blockchain. And then once they're on a blockchain, connect them to the broader world of decentralized finance. The essence of this is to borrow a phrase from Kate Rayworth, who the author of Dona Economics is, to create a system that is regenerative by design. That's what we're thinking through very carefully as we go about the process of design this infrastructure. So what does it mean to be regenerative? There are a couple of different categories of resource consumption, which are illustrated by these little graphs. You can imagine the x-axis is time and the y-axis on each of these charts is the amount of resources available in a system. And extractive systems will deplete the resource over time. Sustainable keeps it about even. Resilience able to respond to shocks or to disturbances. But a regenerative system is one where the resource is more than sustained, where it is actually regenerated over time. And I personally feel that these regenerative systems are probably what we should be aiming for, because sustainable is it's tricky to hit something where it's sustainable and kind of maintains its balance when you can't necessarily foresee these black swan events or unexpected kind of, yeah, environmental changes or changes in the dynamics of the system. So we want to be aiming for one where we're regenerating and building capacity over time resilient with resilience shocks. This is from a graphic by Stephen Key on Twitter. Kevin Milwaukee shared this image. So then the question becomes what do we regenerate? And I personally hold the belief that regeneration is a multi-dimensional endeavor that we can't be to fixated, narrowly fixated on one particular metric. And that even by kind of putting a metric on it, we run the risk of optimizing for the metric rather than for the actual health of the species and health of the earth. But it does help to obviously draw boundaries and it does help to identify certain categories. This work was the outcome of a couple of exercises we've done in the Colonel Fellowship with their regeneration guild, which I've been co-leading over the last few years. And we got this amazing group of people together to just brainstorm all the different things we thought we should regenerate. And surprisingly, or maybe not the number one category was the self, the ourselves. So these were kind of distilled into these five categories. We see community, earth, interspecies, individual and organizations. I don't think this is a comprehensive list. I don't think there is a correct list, but this points to the fact that there are many different things that we need to be thinking about regenerating. And ideally, we optimize our system so that it's regenerating all of them based on our collective value sets. So what does this actually mean in terms of what we might measure? Sure, atmospheric greenhouse gas concentrations, next level being something like biodiversity, but also things like issues of equity and justice and gender equity, racial equality, health measures of health, individual health, collective health, community health, organizational health, mental health, our institutions and governance systems. I could argue we should be regenerating the state of our public discourse. Now, obviously, a lot of this is kind of thinking in quite a high and abstract level. And I think this is where we should be aiming with regenerative finance. Where we are now is quite a few steps prior to that. And we're going to get into the second, because that's two counts taking quite a pragmatic view on where we start. But the overarching insight is that if we exhaust any one of these dimensions, then our systems will eventually reach a breaking point and some kind of tipping point will be reached where some shift happens. And often, unfortunately, those shifts cause a lot of harm and damage as the system transitions to find a new stable state. And I think our job right now is to be thinking about the transition point that we're in, how to manage the harm that happens as we transition our economy and our world through this new regenerative society. And then thinking very hard about what are the systems that are catching us as a species and as a global sentient species as we kind of complete this transition. So where do we start with all that sort of framing of this high level, you know, we should be regenerating our mental health, where do we actually start? I will say that those prior slides, that was about regenerative finance more broadly. Toucan is taking quite a pragmatic and narrow view on this at the moment, with the overarching vision of helping build this regenerative financial system. But what Toucan is, is it's fundamentally infrastructure to bridge the voluntary carbon market onto public blockchains. And there are a couple of pieces of this infrastructure, which I want to walk through. And I'm really keen to get your feedback because I know we have some people who have very deep knowledge of carbon markets in the room. I know we have people who have very deep knowledge of blockchains and tokenized asset tokenization systems. So yeah, this is our approach. And yeah, I think personally very much that idea of strength and underscrew me and the hard questions are the best questions. So don't hold back there. But the essence of this is we've got a couple of components of the protocol. The first is the Toucan carbon bridge. We also have what we call the Toucan meta registry and the carbon pools, which I'll go through in a moment. But the whole journey starts with this idea of the carbon bridge. Toucan is infrastructure that slots in kind of right in the center of the existing voluntary carbon market. So it is a way to tokenize real world assets in the form of carbon credits and represent them on a blockchain based meta registry or registry that contains credits from many different registries. By bringing them onto the meta registry, we have an interoperable system where carbon credits from different registries can be compared and bundled together with with each other. And the third piece is this module that we built called the Toucan carbon pools, which serve to gather together liquidity of similar carbon credits and create a liquid fungible token that can be useful across decentralized finance and beyond. But the first step is the Toucan carbon bridge. So essentially what the Toucan carbon bridge enables a tokenization of verified carbon credits. Currently the only registry connected to the Toucan carbon bridge from the off chain registry network is the Vera registry. So as a user, you can go to Toucan.Earth and initialize a bridging process and then go to the Vera registry and retire the credits, a batch of credits in the Vera registry with a explicit message saying these credits are for tokenization with Toucan, not for climate action with for tokenization with Toucan and thereby transfer the functionality of the credit along with all of the attributes on to the Toucan meta registry. That transfer event, the bridging event is then verified and approved and once it's approved those credits become carbon tokens. So it's a kind of transferring from a carbon credit to a carbon token one to one. And these carbon tokens adhere to an open standard which is called the TCO2 standard and essentially what that means is this is a standard smart contract representing these tokens that have additional information about the particular carbon project and the carbon vintage. So I think probably most of you know carbon markets are quite a differentiated asset class where each carbon credit has information about including the project where it was kind of issued from the year that the climate impact took place. There are certain co-benefits, there's the verification methodology that was followed in order to verify that the climate impact actually took place and so forth and all of those form the basis of what gives these credits value. Newer credits tend to be more valuable than older credits, certain methodologies tend to be more or less valuable than other ones and the market just kind of different market actors look for credits from different methodologies based on their needs from different geographies based on their needs. And one of the kind of primary innovations of Toucan is that we allowed for the tokenization of these credits with all of their attributes essentially tagged on the smart contract that sort of represents those tokens on the blockchain and therefore we more or less preserve the complexity of the market as we tokenize these credits. So what we end up is what we call semi-fungible ERC-20 tokens with additional functionality including the ability to retire these carbon tokens. So you can think of this TCO2 token, a carbon token as the on-chain equivalent to a carbon credit held in the very registry. This is nice because we plug into this already well-established and respected verification systems with this network of standards bodies that have scientifically rigorous verification methodologies that they've been developing over the last decades but we also then bring enhanced utility to the asset class because as cryptographic tokens they can well they kind of inherit a lot of properties and functionality and interoperability with decentralized finance applications which I'll talk about in a few minutes. So first step is this Toucan carbon bridge to bridge carbon credits from off-chain on to the Toucan meta registry. This is just a quick screenshot of the beginning of the bridging process so involves going to Toucan.Earth and opening our app and initializing a new batch. I won't get into the technical details we can talk a little bit about that later on if you'd like but essentially there's this procedure for securely bridging this batch from the source registry onto the Toucan meta registry in a way where there's a publicly verifiable one-to-one link between the off-chain version and the on-chain version. That's very important because above all Toucan is designed to preserve the integrity of the carbon market so we need to make sure there's no double issuance, there's no double spending and a big part of that comes from making sure that this bridging process can't be manipulated. Once they're bridged these carbon tokens are represented on the Toucan meta registry. This is a essentially smart contract based system for representing carbon tokens from all of these different projects and vintages. As cryptographic tokens, as ERC-20 tokens, these carbon tokens have global instance settlement, there are the double spend protections that consensus networks and blockchain afford. Counter-party risk is radically reduced largely through the use of smart contracts and also it's very easy to create an account on the Toucan registry. All you need is a smartphone and to be able to download a mobile application, a wallet app, and you can hold and buy and sell and retire carbon tokens just like that including in fractionalized units so you don't even need to own one full carbon token. Often carbon tokens are quite inexpensive so owning one or many is not a big deal but there are certain vintages and methodologies that are more expensive and that fractionalized access is quite exciting. It's also quite exciting from a retirements perspective. At the moment typically what happens in the legacy registry systems is retirements are bundled up on behalf of many end users and performed in one bulk kind of retirement event. Usually by hand often manually this retirement is done and with Toucan fractionalized retirements are now possible, natively possible and it's quite easy to automate the retirement process. They're sort of like out of the box open API access to the system for writing and also for rereading so that's the last point there this open data access. We have the ability to query the Toucan meta registry and fetch information about balances or accounts, the portfolio of a particular account, the different holders of a particular project or vintage etc etc so all together this means that Toucan has built a better carbon ledger that runs on blockchain so it runs on smart contracts. The third and final component solves a kind of an interesting and unique problem or somewhat unique problem to carbon markets which is the challenge of fragmented liquidity. As I mentioned a bit earlier carbon the voluntary carbon markets while it's a global on regular market it is also a quite a heterogeneous asset class because one carbon token or carbon credit excuse me does not is not fungible with another. The vintage matters the year that the climate impact took place the project matters the location matters etc etc etc and what this does is it fragments liquidity and means that it's difficult to find a transparent price for carbon credits of a certain standard there's no it's much more difficult to form a liquid market so it's easy to buy and sell etc so this is why we built this module of the Toucan protocol which is called the carbon pools so carbon pool is a smart contract account and it's an account that can hold carbon tokens so you can think of it as basically a kind of automated account when you go to deposit in this account you would deposit a carbon token in and if it passes what we call a gating filter which I'll explain in a second then automatically another token in the system which is called the carbon reference token is created and returned to your wallet so this gating filter serves to check to make sure that this each carbon token that gets deposited has a certain minimum set of attributes or gating criteria it has to possess and I explained a bit earlier how we tag each credit contract with this sort of standardized attribute taxonomy that becomes useful here because we have this machine readable attribute taxonomy that can be filtered at the the carbon pools layer and then the outcome of this is you end up with a carbon reference token which is one single fungible liquid carbon reference token that's unique to that particular carbon pool so what you end up is you have this carbon pool account that holds a range of different carbon tokens from a number of different projects and vintages or regions etc that all have a minimum set of attributes and then for each carbon token held in the pool you have a corresponding carbon reference token that essentially serves to be a claim or like a coupon that you can redeem for one of the carbon tokens held in the pool as a liquid fungible token that's a useful token to be used across the decentralized finance ecosystem and again I'll explain a bit what I mean by that in a minute but to explain a bit more clearly what this means if you buy one nct we have two two carbon pools at the moment the base carbon pool and the nature carbon pool each of which have carbon reference tokens associated the base carbon ton and the nature carbon time if you buy one nct token or hold one nct token that means you have the right to redeem that token for an underlying carbon token that is from 2012 or greater and that is based on a nature-based methodology as defined by Vera so that's a pretty powerful thing because it means that the market can get access to these liquid kind of liquid tokens that are trading on an exchange and can be bought for a transparent price 24 seven anywhere in the world um but they know that they get that underlying token that have a kind of benchmark um level of quality I see there's a a a thing in the chat I want to make say which wall can we map map to get carbon tokens great I'll explain in a second um well any any ethereum compatible wallet can be used to um any ethereum compatible wallet can be used to hold carbon tokens the carbon tokens can be held in any ethereum account and um I can explain maybe a bit more about that in a minute but at the moment the toucan protocol is running on the polygon blockchain which is a proof of stake blockchain that kind of serves as a sidechain to the ethereum main net um polygon is very energy efficient and transactions are very inexpensive which is why we chose two big reasons why we chose polygon um so in any case these are the gating criteria for the base carbon ton and the nature carbon ton bct in order to deposit a carbon token to the base carbon pool has to be from 2008 or later it needs to be a vcu from vera which is actually the only um carbon credits we have bridged onto the system at the moment and we don't allow hfc 23 credits to be um the positive actually we we don't allow hfc 23 credits to be bridged into toucan at this point um the nature carbon ton is a bit more restrictive it's from 2012 and beyond and only nature-based methodologies are allowed in the nature carbon pool um so that's the sort of essence of it these are the two liquid carbon reference tokens that we have um on the toucan protocol and i kind of go to the links to explain this because it's pretty fundamental to the upcoming section where i'm going to talk about what does it mean when we talk about building a regenerative financial system and embedding climate action and weaving it into the fabric of the way our financial system works um but this is this is sort of the the essence of of what toucan has done to date um we have plans for more carbon pools so you can think of these carbon pools as what the task force on scale and scaling voluntary carbon markets calls the core carbon reference contracts um these these sort of standardized um attribute sets that it's almost serves as like a benchmark product um so we are in discussions and thinking about what the next carbon pools are going to be and more than that how do we empower the community and especially the carbon market experts to identify and design what the optimal carbon pools are so that we can make sure that the market gets served market needs get served but also that we um kind of balance that against getting enough liquidity into these carbon pools for them to be useful useful um and to be able to create liquid markets and so forth so right moving forward right so um the essence of this is that carbon markets the idea is that they help to put a price on polluting the atmosphere that's one dimension of why carbon markets exist um so it's a market-based mechanism that's intended to incentivize the transition to a green economy and the way I really think about this is carbon markets are our carbon credits essentially are a tokenized tokenized well we don't necessarily say tokenized but you bundle up the um positive climate climate impact into a financial instrument and then allow anybody else on the market to purchase that oftentimes that's to match with some sort of pollution so to match that positive externality with a negative externality retire the carbon credit and therefore kind of balance the carbon budget of a particular organization or individual but it's I don't think it necessarily needs to be constrained to just matching with pollution there are other use cases for carbon credits that don't have anything to do with the pollution of the sort of demand side of the market and personally actually I'm something I'm quite excited about so um here is just a little graphic to explain some of the benefits of what Touken does with a quote from Kay Rayworth who's one of my favorite thinkers in the regenerative economic space but at the moment there are a lot of ways in which the carbon markets are fragmented opaque difficult to access bureaucratic slow there's a lot of value extraction by middlemen that's ultimately constraining the flow of capital to impact projects on the ground which is the the sort of a sensible purpose of the carbon markets is to get money into the hands of people who are doing things that are going to improve our the ability for humanity to rise to the climate challenge and to stabilize atmospheric concentrations of greenhouse gases and with this kind of broken system there is money flowing obviously but we want to try to improve the flow of that money so that we can scale up supply and ultimately do more to stabilize stabilize the climate um so with Touken we remove a lot of these middlemen and replace them with this um transparent economic code in the form of smart contracts and um create a system that's open to all that's much easier to access and that unifies liquidity so that we can have much more efficient transparent markets running all right so all this is great but what can we build with tokenized carbon credits what's the purpose here um what does it mean to embed regenerative uh embed climate action into the fabric of our of our economy um this is a quick graphic just to show all of the different use cases and applications we can think of related to Touken and there are many more that we can't think of um but there's obviously this idea of offsetting and um people purchasing these carbon credits to retire them that's the sort of most common use case now um but it's also a useful financial instrument and can be used as collateral for loans or stable coins it can be potentially used to generate yield it can be used in gaming um or some sort of like digital art and collectibles it can be used in and more sophisticated financial applications like derivatives and option systems and so on and so forth this is essentially what we're we want to enable by tokenizing carbon credits and pooling liquidity we create a new building block for the decentralized finance world that they can automatically incorporate with the rest of what they've been building because it is compatible as a fungible token here is a list of just a few of the projects that are building with Touken carbon and this is kind of very early days and already we have this really amazing range of people that are coming out of the woodwork to build so we've got people building carbon viewers and explorers um that want to make the experience of discovering and buying carbon credits delightful um there's a couple of projects that are looking at backing currencies with carbon credits so using carbon tokens as collateral for currencies Klimodau is obviously a big one but Kumodau is a really exciting one that is progressing progressing nicely there are automatically integrations that can happen with other decentralized finance projects market is a borrowing and lending protocol tracer is a derivatives system sushi swap is a decentralized exchange so currency exchange so we have both bct and nct trading on sushi swap and it's you know among the most liquid carbon markets in the world um consumer offsetting this is uh giving consumers the choice people the choice to make their um climate impact or their their blockchain activity carbon neutral just by default by the term protocols that this cool system where you essentially buy an nft and hold a near count and all of the transactions from that account are automatically offset menthol does it another way there's already different ways of of approaching this um we've got others that are doing really exciting work on um thinking about the next generation of environmental uh assets on blockchain's regen network moss has been doing great work um they introduced one of the earliest um on chain carbon credits uh in in the whole in the world and um are are definitely oj's in the space and um there's also work you can do where you can build games or digital collectibles and digital art with um with carbon so all this is just pointing at this idea that by tokenizing carbon we can bring enhanced utility to this and I think where we want to things to head is as we the blockchain-based financial system develops and progresses and gains market share essentially we want climate action to be built into the infrastructure of the financial applications that we use every day so that it's not a box that we take at the end of the form right that this is a um kind of automatic inextricable piece of our financial infrastructure and just by having money just by holding money just by using money we are contributing to regenerating the earth that's the sort of top line um goal that we have so the outcome is a planet positive economy built on a regenerative financial system and to can provides one of the earliest building blocks for creating that regenerative financial system great I think that's time I imagine we're probably about at 20 or 25 minutes so um it's been it's been a pleasure thank you so much for for listening and I would love for us to shift to uh questions I know I saw a couple pop them in chat um and we've got a few here okay so which wallet can we map to get carbon tokens um so as a project building on an EVM compatible blockchain which is polygon any EVM compatible wallet you can configure to hold carbon tokens so that means you can use metamask you could use um coinbase wallet there's several um you could use status I think xerion has a wallet coming out soon maybe so all of this um you can even hold an any ethereum account um interacting with toucan does require you to use metamask because that has the best support for interacting with decentralized application okay hi john this is from junji uh is toucan working to define standards with the industry across several registries have you participated in initiatives such as task force and scaling voluntary carbon markets and regarding credits that were already tokenized in other places will you accept them into pools or do the tokens on the pools need to be generated by toucan great great great great great questions so um are we working to define standards yes we are working to define standards to to this point we've been mostly working on the blockchain-based side of the equation so we opened up the tco2 um code base so anybody can look at it we have um been engaging with various industry players from across the ecosystem we've been speaking with several standards bodies we've been speaking with carbon brokers we've been speaking with projects um project originators project financing people just to make sure that we are building with our community and and making sure that we understand their needs i think yes we are starting to work with um the registries to figure out how they can most capably um interoperate or integrate with tokenized carbon based on blockchains and we've been really excited by how um essentially how positive and um forward thinking they are you know i think there's quite a lot of risk intrinsic to building with any new technology and so um of course we've you know these are risks we've been taking into account from day one really trying to think through uh how do we manage technical risk making sure we've really think through the technical aspects of our system as we're building it making sure we got audits performed by top auditing companies that can review our code with an independent eye and see if there are any places where there were issues that might arise and so forth um but we also there are other other types of challenges here we need to consider the legal implications of what we're doing um what is the status of a tokenized carbon credit how do we make sure that users are protected um how do we make sure that appropriate identity checks are being taken into account in the right places of the system while also making sure that the markets are opened up to as many people as possible and all these are things we've taken into account and we're also working through with these representatives that we're just talking with from a range of industry bodies um so yes in a word yes we are working to define the standards and to make sure that this is done in a way that is manages risk while also is moving carbon markets forward so we can scale these in a uh a short amount of time and therefore obviously drive more financing to projects on the ground um regarding credits that were already tokenized on other places will you accept them in full this is a really important question that's a really good question so the essence of this is carbon tokens are essentially by you know created by tokenizing carbon credit from an off-chain source and bringing it on to a blockchain but who does that tokenization is an open question right there are others that are working on coming online soon that will perform a similar function as the Toucan carbon bridge and it's our belief that one of the main value propositions of bringing carbon markets on to blockchains is that they're interoperable with each other right that um we kind of reduce this market fragmentation problem by um bringing them all into one financial environment essentially where they can interoperate and and so in that in that regard yes it's quite important to us that these the interoperability is preserved um and we do feel like we haven't actually hit had to make the final answer to that question so may end up being a case by case basis if we feel like a project doesn't have um adequate kind of integrity and security checks in place um and that there's risk of double insurance we may not accept them into Toucan pools but if they adhere to a credible process for tokenizing carbon credits and I think we will want to accept them into to Toucan's carbon pools um great from Christian how do you present prevent the destruction of value by pooling the price of any token in the pool will always be equal to the value of the lowest lowest value token in the pool this is another great question Christian so you're driving at a bit more of a sophisticated aspect of um the Toucan's carbon pool modules so exactly as you identify in this pool there's going to be carbon tokens from a spectrum of um kind of attribute sets and and quality levels right value levels there might be a one token in the pool that can be bought and sold on the market for ten dollars and another token that can be bought and sold for five dollars but both of those back the same fungible token you know and say a BCT and BCT is trading for however much um the short answer is that when a carbon reference token like BCT or NCT is redeemed you receive back a carbon token but then the question becomes which carbon token do I get right and we are essentially we apply a fee at that point if people want to choose which carbon token they redeem so if you wanted to redeem BCT and receive the default carbon tokens in the pool which are going to be the lowest value tokens in the pool the oldest tokens that is going to be free there's no fee to redeem BCT and pull out the carbon tokens because that's a step that's required to perform the retirement you can't actually perform retire the carbon reference tokens you can only require the TCO two tokens that are held in the pool we don't want to put barriers in the way of people retiring carbon credits right so the default redemption process there is no fee applied but if you redeem the higher quality tokens in the pool if you want to selectively redeem or choose which carbon tokens you receive as the outcome of this redemption event then there's a fee applied at the moment this is a flat fee it's a different for each pool but there's like a flat fee for any token we're exploring ways to build a more nuanced kind of pricing system into our redemption process it's tricky because one of the problems if we're trying to solve is that there's not really a fair transparent price that is kind of market-wide for these individual carbon tokens of different projects and vintages so it's hard to figure out exactly what one you know what the fee should be applied to selectively redeem this token versus that token but that's something that we're working on yeah i think that's a great question so yeah the short answer is any any token can go in but in order to get whatever token you want out there's a fee applied and i also mentioned as an example of what we mean when we say embedding climate action into the fabric of our financial system by default if you do this selective redemption process the fees that we take a portion of that goes as revenue to the two cam protocol so we can sustain our operations and continue to grow the the system but um another large portion of that in fact in on the nature carbon pool is 50 of the fee and on the base carbon pool is 80 of the fee is actually used just to retire tokens held in the carbon pool so five percent if you if you selectively redeem from the base carbon pool there's a 10 fee applied if you redeem 100 bct you get back 90 tco2 tokens that you get to choose but of the 10 percent that are taken as a fee five of those tokens are just retired from the the lowest quality tokens in the pool and five percent go to can as um as revenue okay great okay let's move forward to junji um how you envision other dimensions of projects that generate carbon credits such as social benefits absolutely um co-benefits are included in our standard attribute taxonomy so we have tagged these credits carbon credit contracts with those specific attributes including the co-benefits and that's that's important because that plays a big role in what the value of those credits are on the market so we want to make sure that that's visible to people that are buying carbon tokens on chain whether that's visible to them if they're manually buying and it kind of examining it in some kind of visualization maybe a dashboard or some kind of you know registry where they can go select which tokens they want to buy but it's also accessible to be um read by by the smart contracts like a machine-readable form of that information is also accessible so we could use co-benefits as a gating filter in a carbon pool who want to we could create a carbon pool that only accepts you know credits from particular with that possess a particular co-benefit um all right christian so what extensive what incentive is there for the irradiator this is also a great question that's one we are our the short answer is we're working on this at the moment toucan plugs in with the existing carbon markets so we inherit all of the dynamics of the existing carbon market as is and the truth is at the moment old carbon credits on the market the irradiator doesn't really have anything to do with them anymore right they were they were financed and typically sold long ago and there are the project financers or brokers that now hold the credits from 2012 2015 2008 whatever maybe those are the main people that are currently interacting with toucan protocol we're very actively exploring how we can use the infrastructure for what it's meant to be used for which is getting more money into the hands of the originators right um so that's a that's a short answer what incentive is there for the irradiator it is um it it is possible that the originator now has markets that they can sell directly into without necessarily needing to sell to a buyer if they brought online a carbon credit that matched the criteria of a particular carbon pool they could issue their their carbon credits bridge them onto toucan and sell them on our liquid markets on the liquid markets running on buck chains and basically kind of cash out on day one without needing to rely on anybody else um so that's that's one of those ways in which toucan helps kind of minimize counterparty risk um but yeah it's a great question that there are some very exciting things happening in the blockchain world around especially actually in the nft space of how do we make sure that some royalties flow back to the artist for every kind of subsequent sale and so forth and that's something we're thinking about um it's there's as you might imagine there's there's quite a lot of complexities in um building this kind of um building this kind of system so that it can operate at scale um and and explaining anyway you know it's one thing to to experiment and build a prototype and it's another thing to build a production scalable market kind of functionality and so we're essentially in the r&d phase with um with some of those ideas of of kind of creating a perpetual funding stream for originators and so forth that's not that wouldn't be happening anytime soon um yeah wow these are great questions um i think that's it for the questions in the chat so i'd be curious to come back and see who cool does anybody else sure would uh hey yes thanks john i really enjoyed this presentation and congratulations on the success you had um it sounds like you've been there since the kind of very near beginning um and one of the things that the the sig is really kind of focused on is um we're kind of like a sandbox and we want to kind of develop proof of concept and kind of move concepts to to kind of market and build buy-in and kind of build networks so i'm really curious to hear um a little bit about the not necessarily the origin story but the origin story but moving from kind of proof of concept to kind of getting buy-in in the marketplace and finding partnerships what were some of kind of the key breakthroughs um and kind of key partnerships that really kind of helps you move from an idea to kind of a thriving kind of community and ecosystem that's a great great question and it's um there i have some answers that are informed by experience and some that are ongoing right this is this is an ongoing process we're still so early days with this um so i mean essentially toucan is a system that allows you to tokenize real world assets right at the end of the day and these real world assets are these carbon credits and um the question of course is cool you build this great system but like why would i send my carbon credits and perform this ridiculous bridging procedure where i have to download new software and i have to make new accounts to get assets in and you know it's the web web three user experience is super super uh trying and needs a lot of work um and the the short answer is with toucan um we launched with a partner um a a partner called clema dow and honestly it was in large part because of the timing of the launch of toucan that there was a real excitement within the crypto community of um using these decentralized finance kind of techniques for driving climate action and um so clema dow launched and because of the configuration of the system if anybody's familiar if clema dow is a fork of a project called olympus dow um and it it was one of the most successful decentralized finance projects last year they had this like really um unbelievable rate of return for for the the system and a lot of people actually ended up making a lot of money off of it and it's since not been doing so well to say the least but at that particular moment in time a lot of people were very excited about it and that served as this like real strong demand signal um to well not even demand signal it was just demand on chain for people buying carbon credits from brokers in the legacy markets and kind of break so that's one piece is um we we built this infrastructure and it wouldn't have done anything if it weren't for demand for a reason to engage in this novel technology so i think that's one lesson and really important breakthrough is make sure that the demand side really understands the value of what you're doing and why they should do something and well for better or worse the the short answer is to why they should do it is because they make money you know so so that's one piece um but now that we're actually kind of moved past the hazy days of 2021 and the this crypto market cycle that seems to have maybe thankfully sort of calmed down a little bit um i think another really really important piece is to really kind of delve deeply into the needs of the prospective users and understand you know it's kind of a standard design thinking um design thinking approach but engaging with these stakeholders engaging with these customers and understanding what they need so for example recently i've been talking to a lot of people and they've been getting really excited about the fact that with toucan it's very easy to do these fractionalized retirements where i'm i'm saying i'm offsetting a flight that i go onto europe and i at the end want to say take the box and pay whatever it is a dollar or something to offset my flight but after that i kind of just trust that like the offsetting takes place and obviously if they didn't then it would be fraud but i don't necessarily get anything back for me taking that box i just get pay an extra buck and feel okay about it but if i were instead kind of immediately shown a dashboard say where there was a um a specific retirement that was performed in my name or with some message that i posted in and i could click through and independently verify this on the blockchain that's a really compelling value proposition for a lot of these projects that are essentially like demand aggregators for offsetting right they they allow people to kind of like pile on these offices and then once a month they'll say okay cool our customers collectively offset 2000 tons of carbon so we're going to perform one offset event manually in this legacy registry if we can go and say you can provide a much better customer experience by giving people proof that they've actually taken climate action at the asset and b you can automate this programmatically and you don't need to have api you have api access to the registry right automatically you don't need to go and sign up and get an account you automatically have it um i think that that's actually been quite an exciting um line that we're exploring with a couple of different customers this sort of automated micro-retirement functionality um so that's and i think that actually like to to inspire people to make this switch it means that ideally you have the ability to make their life much easier the ability for them to make a much better product for their customers and typically honestly early on you we need to be finding the um the customers that are switched on about this stuff you know there's this sort it's just a classic like early adopters in the middle and then the sort of laggards we're looking for early adopters right so please let's you think build build a product that people need and be at the right place at the right time yeah and i mean yeah so it's basically a same same answer as usc if anybody but i think i think um a key piece there is um yeah i mean a lot of the the legacy carbon markets people that i've been talking to they understand the value of blockchain right they they they know the global settlement they know reduced counterparty risk they know no double spend like they've done their research and so um a lot of it is also and i'd be curious actually for your perspective from hyper ledgers point of view um when we're dealing with public blockchains a lot of the hesitations are around a lot of the common um conceptions about large energy usage there's conceptions about it being open to scam and fraud you know all these are are legitimate concerns and so um that's another piece this is like education and kind of like risk management dimension to it that um maybe maybe hyper legend doesn't really have to worry about because as an enterprise solution it's you know you kind of avoid a lot of that a lot of that um i don't know another question but i'll just yeah i mean i'm up we're in the permission space so those a lot of those challenges we don't have to deal with yeah yeah yeah exactly they're tricky yeah they are tricky yeah which i mean there's a lot of benefits to permission it reduces the complexity and risk by a lot um and then the flip side is it means that it's not quite as open to letting anybody come and build which is i think i really do i have this really strong belief that like we're going to end up in a world where there's a place for public blockchains there's a place for permission blockchains and you know it's not going to be a win or takes all it's going to be both and and letting a lot of this more experimental innovation happening in the public space once that's sort of tried and true and proven security then shifting it on to to the permission ledgers and um so i'm looking at the time i i see george has his hand up um i've got to jump off in a minute or two unfortunately because i've got another talk i've got to give but um george hi hi thanks john thanks for the great talk i have a really quick question actually i mean i think it should be a quick question um we're expecting yeah we're expecting a big change in the building regulations to require projects in the uk to certify their carbon footprint but we're not quite sure how it's going to be monitored realized or if it's going to go into the into kind of a trading regime like it does in energy and it looks like it's going to happen in transport as well um so we're getting geared up to try and understand how the cryptocurrency or the carbon currency is the sort that you've been talking about might be useful for us or i think we're looking for ideas or looking for we don't quite know how the the landscape is going to frame up but we have an inkling yeah well so i'm not super familiar with that particular regulatory development i think generally you got two pieces some carbon accounting right there's the the estimate and then there's the retirement the sort of balancing using offsetting and to can we are purely focused on creating more sophisticated functionality on the offsetting side of the equation so we're really interested in understanding the state of the art of carbon accounting and estimation methodologies most of the people that come to talk to us say we want to be carbon neutral and we say well what's your carbon footprint and they say we don't know help us figure it out and and that's not the role we necessarily want to play because that might undermine our neutrality at the same time we want to encourage people send them send them to us because that's okay spending all our time figuring out yeah figuring out how to do carbon estimates for building projects so yeah so the but then on the flip side of this on the offsetting side once you have that number say okay 10 tons this month i don't know two can as i said allows for this like individual retirements to be very very easily performed and essentially to produce a um verifiable evidence that a retirement took place to match with an estimation and essentially prove that you have a balanced carbon budget um so i think that's one dimension that these blockchain based systems that allow for a more sophisticated carbon market than sophisticated retirement functionality do you have a really strong role to play in helping um essentially with like carbon auditing right i i make this claim but can i prove it can i show that i actually made this retirement and is it a bit more advanced than just i got an email from somebody that said that i did this you know um cool i know we've got some questions in the chat i'm not sure if i'm going to be able to get to them all but hey robin hey john thanks john that was uh yeah maybe a few if you want people give the chance to reach out to you after the talk yes how how can they reach out to you absolutely yeah so on email i'm john at toucan dot earth and then i'm also on twitter at john x25 bd um that's my sort of username across the across the internet so if you want to get in touch with me on twitter my dms are open or on linkedin actually that's also my um i'll just go ahead and drop my linkedin profile as well in here now and um linkedin and then i'm afraid i would love to hang out but i do have to run so i'm just gonna drop this here and then john thank you very much for joining today and for giving the great presentation and i really like the holistic view that you presented at beginning and but starting with a particularly part while it and trying to solve all the problems at once and thanks for for your work at toucan and for making a time today right thanks robin thanks everyone so nice to meet you all um yeah i hope to see you out there and send any questions or keep the conversation going online yeah thanks john bye thank you bye bye