Can Crypto really positively affect climate change?
KlimaDAO - A revolution in the Defi sector
In this article, I will talk about Kilma DAO, it is probably one of the most exciting things I've discovered in the Crypto space this year.
What is a DAO?
A decentralized autonomous organization (DAO) is a new business model in the Web3 industry. It is represented by a set of rules encoded in a blockchain. It is not influenced by a single entity or a central government. If you have the DAO’s token then you are a part of it and you have the ability to vote on the proposals.
I will not dive into the explanation of a DAO because it is a big topic but if you are a beginner and you want to understand the different aspects of DAOs then you can explore the following resources:
1. What is a DAO in Crypto? by Whiteboard Crypto.
2. A beginner’s guide to DAOs — Mirror by Linda Xie.
KlimaDAO is a fork from the OlympusDAO, and to understand what KlimaDAO is you have to understand OlympusDAO firstly.
What is Olympus DAO?
Olympus is a decentralized reserve currency protocol based on the OHM token. Each OHM token is backed by a basket of assets (e.g. DAI, FRAX) in the Olympus treasury, giving it an intrinsic value that it cannot fall below. Olympus also introduces unique economic and game-theoretic dynamics into the market through staking and bonding.
What is in it for me?
You can benefit either by staking the $OHM token which generates 8k% APY by the time of writing this article, or by bonding.
The DAO is minting new tokens from the treasury in order to pay the stakers rewards and the rebase is happening every 8 hours so the huge gain is coming from their auto-compounding balances.
Bonders provide their capital and will get a fixed return after a fixed period of time, the rewards are in $OHM token so they would benefit from a rising in the $OHM price.
Olympus DAO is built by a distributed pseudo-anonymous team. And all of the liquidity is owned by the DAO itself, which helps maintain price stability and treasury income.
The official documentation is really comprehensive, I recommend you read it to understand how Olympus DAO really works and how they are able to pay an insane APY while maintaining price stability for the $OHM token.
The Klima DAO | Defi 2.0
KLIMA is the first building block for unlocking the carbon economy — an economy where more economic activity leads to an acceleration in planetary regeneration rather than more damage to our planet.
What is a carbon credit?
A carbon credit is a generic term for any tradable certificate or permits representing the right to emit one tonne of carbon dioxide or the equivalent amount of a different greenhouse gas (tCO2e).
What are carbon credits used for?
Individuals and businesses purchase carbon credits (carbon offsets) in order to counteract the negative environmental impacts of their own activities, actions, and tasks. Importantly, carbon credits provide critical financing for sustainability projects, including forest conservation and renewable energy generation.
So in simple terms, the Klima DAO aims to remove Carbon assets from the open market. Therefore, it will raise the price and force companies and economies to adapt more quickly to the realities of climate change, and makes low-carbon technologies and carbon-removal projects more profitable.
Klima DAO is also supporting new projects at a planetary level, they have donated 500 CO2 tons of carbon offsets for OceanDrop.
Each 1 $Klima token is backed by 4.91 BCT (Base Carbon Tonne), which will function as a truly sustainable asset and medium-of-exchange, with real planetary value.
What is in it for me?
Staking
“Carbon comes in, value comes out”. If you are holding $KLIMA, then you have the ability to stake it in the protocol and earn high rewards. The staking process provides 2 benefits:
It encourages the long-term holding of $KLIMA - The longer you stake, the higher your rewards will be.
For example, let’s assume you want to buy 1 $KLIMA at the current price ($2000).
If you stake it for one month you would make 62.36% ROI but if you stake it for one year, then you would make 36,297% ROI! Insane, right?
But that assumes the APY does not change and the $KLIMA price stabilizes at $2k. That would never happen.
| The calculator used in the screenshot above is created by The Calculator Guy, click here to use it.
KlimaDAO is powered by Polygon, if you are a beginner and never used the network before then this video would help you get started:
Bonding
It is how carbon enters the treasury, and new $KLIMA is created. Anyone can buy $KLIMA at a discount by bonding carbon units and LP shares over a set vesting period.
Some statistics
Currently, there are more than 9M tonnes of Carbon in the treasury.
And that’s out of 10.2M tonnes available which also means we have 88.1% of all tonnage on the on-chain market.
That’s equivalent to:
45,500 hectares of forest.
1,978,300 passenger vehicles (annual).
4,648,906,375 liters of gasoline.
The protocol owns 99% of the KLIMA-BCT liquidity.
And the number of holders at the moment is more than 37k.
I recommend you read this amazing thread:
Conclusion
KlimaDAO is making a real difference in the world when it comes to climate change. So do not hesitate to be a part of it!
Disclaimer - This is NOT financial advice, always do your own research. KlimaDAO is a new project which launched days ago. I’m NOT an expert but I wanted to share this opportunity with you.
Resources
That’s all for today!
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