Dapp Spotlight: Unlock Climate Action at Scale with Toucan
21 April 2023
TL;DR:
Toucan is paving the way for a scalable global carbon market by providing infrastructure for blockchain-powered, transparent, accessible, and programmable carbon markets.
Tokenized carbon can help to rapidly scale carbon markets by increasing access for credit suppliers and buyers and giving Web3 builders the tools to integrate sustainability initiatives directly into their products.
Toucan’s infrastructure is already being used by Web3 products - including cLabs’ new Ultragreen money proposal, which will ensure a portion of the fees from every transaction on the Celo network will automatically purchase and retire carbon offsets.
Toucan also provides an easy way for anyone to directly purchase carbon credits, which you can do directly from your Valora wallet.
Disclaimer: The following article is for informational purposes only. It should not be taken as an endorsement, investment, tax, financial, or other advice. Toucan Protocol is not built or maintained by Valora, nor does Valora receive any payment or other form of compensation from Toucan. This article simply aims to provide an explanation of how many people around the world are using the Valora wallet to access and explore decentralized applications like Toucan Protocol. As with any Web3 solution, you alone assume the sole responsibility of evaluating the merits and risks associated with using any third-party decentralized application.
What is Toucan?
Toucan protocol is developing blockchain-based infrastructure to help scale carbon markets globally. By building the technology to tokenize carbon credits, Toucan has unlocked opportunities for carbon credit developers and buyers to connect directly with each other across countries and continents while giving Web3 builders the tooling to integrate climate action directly into their protocols.
Toucan's infrastructure and products built on it allow people and organizations to easily access carbon credits or to automatically contribute to sustainability efforts simply by using Web3 applications. Toucan is, for example, partnering with Web3 organizations for initiatives like cLabs’ new Ultragreen Money proposal.
The ability to tokenize and pool carbon credits help solve fragmentation and liquidity issues in carbon markets, where historically, carbon credits have not been considered an asset class that could easily be bought or traded.
The idea for Toucan originated in early 2020 at the ETHLondon hackathon. At the time, Toucan was called CO2ken, and it was supposed to be a prototype climate action tool for Ethereum. After extensive development, Toucan launched in October 2021 as the infrastructure provider behind the Base Carbon Tonne (BCT), their first carbon reference token.
Why Tokenized Carbon?
By tokenizing carbon credits, Toucan is enabling new use cases and driving new demand for carbon credits. Toucan’s network gives climate projects the opportunity to pool together similar carbon credits to build deep liquidity, which can then be leveraged across Web3.
Meanwhile, the programmability of tokenized carbon credits allows Web3 builders to create more automated demand sources by building new use cases for carbon or to automate sustainability initiatives by integrating carbon retirements directly into their products. All of these things help grow carbon markets and drive money to climate-impact projects.
Credit Where it’s Due
To date, Toucan has tokenized roughly 21 million carbon credits.
Ultimately, a carbon credit represents a planet-positive impact. The Toucan Carbon Bridge can be connected to trusted conventional carbon registries. Credit holders can then tokenize assets that have previously been certified by a carbon standard. That way, only legit credits are turned into tokens. The data attached to each tokenized credit (TCO2) shows the project, year, climate impact, and more. And when you “retire” a carbon credit, you remove it from circulation, which is where real climate action happens.
Since Toucan’s launch in October 2021, they’ve seen:
20 Million+ Tonnes of CO2 bridged
50+ Climate projects tokenized
50k+ Tonnes of carbon retired
$4 Billion+ Carbon trading volume
Celebrate Celo’s Ultragreen Week
Created in collaboration with the broader Celo ecosystem, Ultragreen Week (Web3’s “Home of ReFi,”) features five days of collective action inspired by Celo’s recently-expanded “Ultragreen Money” sustainability commitment.
The new sustainability proposal will ensure that every transaction on the Celo network will automatically support sending a portion of transaction fees to Celo’s Carbon Offset Fund, which uses Toucan Protocol to purchase tokenized carbon credits.
Ultragreen Week and “Ultragreen” funds, or assets, are a response to industry-wide efforts to reduce our carbon footprint. This coordinated movement highlights the various use cases that leverage Web3 innovation to unlock climate action at scale, culminating on Earth Day, April 22, Celo’s 3-year mainnet anniversary.
Offset On-chain with Toucan and Valora
However, until Celo’s new Ultragreen Money proposal takes effect, anyone can still purchase carbon credits directly with Toucan Protocol in the Valora wallet. Individuals can simply purchase the carbon reference token NCT (Nature Carbon Tonne), to then redeem and retire TCO2 on Celo with Valora. Watch Celo’s tutorial with step-by-step guidelines here.
How to Redeem and Retire TCO2 on Celo using your Valora wallet:
Download Valora on your mobile device
Download Valora from the App or Google Play store.
Create a new account with your name and choose a unique pin.
Connect your account with your phone number.
Back up your recovery phrase. This is important to make sure you can regain access to your funds if you lose or damage your phone.
Visit the Valora dapps page from the top left drop-down menu.
Purchase NCT
Tap on the “Ubeswap” dapp
Select “CELO”
Select the “NCT Token”
Determine how much CELO you want to transfer (5 CELO should be enough for 1 NCT)
Confirm Swap
Confirm transaction
Redeem
Visit the Valora dapps page from the top left drop-down menu.
Tap on the “Toucan” dapp
Connect your wallet using “WalletConnect”
Tap overview
Scroll down and select your NCT balance, then scroll over to redeem TCO2
Select either “Automatic” or “Selective” for choosing your redemption target
Tap “Max”
Tap “Redeem” now
Confirm transaction
Retire
Go to overview (still in Toucan dapp) and scroll down to Toucan CO2 Tokens
View your newly redeemed tokens there, then scroll across
Tap “Retire”
Review a summary of the project name and country
Tap “Max” to retire the token
Tap “Continue” then “Retire to Offset”
Confirm transaction
Congrats! You’ve just retired carbon credits!
Watch your Carbs this Earth Day 🌍
Toucan is just one example of the ReFi dapps accessible on Valora. In a few taps, you have access to over 30+ dapps bridging economic and climate initiatives. This Earth Day, we encourage you to explore the many projects available to you in your Valora wallet. While you are saving, swapping, and growing your crypto, you can also easily support efforts to reduce your carbon footprint.
We have more exciting news coming your way! Follow @Valora and @ToucanProtocol on Twitter to keep up with #Ultragreenweek initiatives. 🌳
