Why Nori needs its own cryptocurrency token

Ross Kenyon
Published in
5 min readSep 21, 2018


This is a common question. It is also a good question. We discussed at length our approach to creating a token for our project, Nori, in a recent episode of our Reversing Climate Change podcast. There is a large temptation for any new blockchain project to issue their own cryptocurrency as a fundraising strategy, sometimes for no other functional reason beyond that. Many people start with this question upon learning of a new project.

Our primary digital asset, the NORI token, is the one that falls under this breed of scrutiny. So then, why does Nori needs its own cryptocurrency?

Christophe, Ross, and Paul recording the podcast episode on this topic.

1. Price discovery

One NORI token can always be exchanged for one Carbon Removal Certificate (CRC), given adequate CRC supply. The CRC is a secondary digital asset we’ve created which represents one metric tonne of carbon dioxide removed from the atmosphere. The CRC is non-fungible, meaning that it is unique.¹ Think of fungibility like cash: one twenty dollar bill is as good as pretty much any other. The NORI token is fungible. The CRC is not fungible. The CRC points towards metadata that stores information about where and how carbon removal activity took place.

If the NORI token is being freely traded on secondary markets such as cryptocurrency exchanges or commodity markets, and one NORI is exchangeable for one CRC, then NORI becomes a market-driven and universal price for one tonne of carbon dioxide removed from the atmosphere. This price signal for carbon has never existed in this complete of a form and is extremely valuable for economic planning and calculation. We often liken our goal here to the Brent Crude reference price for oil or West Texas Intermediate (WTI) because that price serves as a stand-in for world oil price whose usefulness for economic calculation is self-evident.

2. Monetary policy

As a result of the direct link between one NORI token and one CRC, we are able to set the parameters of monetary policy directly rather than relying on something entirely outside of our control like the US Dollar or Bitcoin. It is important for us to make sure that the money supply (# of NORI tokens) grows proportionally with the number of CRCs in the market. This makes sure we don’t have a huge amount of NORI outstanding but very little supply of CRCs to redeem against. In determining the correct amount of NORI tokens to mint, we worked with economists, both on the team and contracted, to make sure we weren’t radically over- or undersupplying tokens given certain assumptions about the velocity of money and other concepts within macroeconomics and monetary theory that is beyond the scope of this piece.

In general, we favor nondiscretionary monetary policy like the algorithmic release of Bitcoin at set intervals, as contrasted with the discretion typically given to government central banks.We think the temptation to intervene within monetary systems can be harmful and cause uncertainty, and thus have limited our ability to do so. Of course, this means that our work at the origin of the system is incredibly important in making sure this work is done well and will work with limited or ideally, no involvement from Nori except what is announced ahead of time and is done in a programmatic rather than discretionary fashion.

If we did not have the NORI token, we would not be able to build a system in this manner, which we think is extremely beneficial to our ecosystem as a whole.

3. Token distribution & insurance pool

Of the 500M NORI tokens which we plan to mint, they will belong to different categories of stakeholders. The most relevant category here is the insurance pool. In legacy carbon markets, if someone buys certificates that turn out to have released the carbon they attempted to remove or avoid emitting, the buyer would be on the hook for replacing those. We take that risk ourselves. We have an insurance pool set aside of 100M tokens to replace any invalid CRCs for the benefit of buyers. We are able to build this mechanism into our market because of our control over token supply and its mechanics for the benefit of our users.

To get more into the weeds, when a farmer sells CRCs in our market, a portion of the tokens they receive will be “unrestricted” and the remainder will be “restricted.” If the farmer breaks their contract and releases carbon from their land, the restricted tokens will be pulled back and used to buy new CRCs on behalf of the original buyer. If there aren’t enough of those restricted tokens to make the buyer whole, then we will use our insurance pool to fill the gap.

4. Selling tokens (or SAFTs) to both investors and customers is the most efficient way to seed the market

Startups typically sell equity in the company to investors who hope to see a return on that investment when the startup gets acquired or goes public. That can work quite well for some companies, but in some cases that puts investors at odds with what is best for the customers of those startups. By selling the same financial instrument (the token, or SAFT as that’s what we’re actually offering) Nori is aligning the incentives between investors, customers, and Nori all along the same path. Everyone in this ecosystem benefits when the NORI token is widely traded and used for removing carbon. If we were to sell equity to investors, Nori might be pushed to make financial decisions that would benefit investors, but not benefit the larger goal we have of removing enough CO2 from the air to reverse climate change.

Those are four big reasons why we believe Nori needs its own token: price disclosure, control over monetary policy, and the ability to create different groups of token-holders with particular regard to the insurance pool, and aligning investor and customer incentives. There are other reasons as well, but those are the ones most important to us in crafting the origination of a new token economy.

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  1. The cool kids call tokens like this or CryptoKitties, CryptoZombies, and others NFTs: Non-Fungible Tokens.



Ross Kenyon

Cofounder of Nori; host of the Reversing Climate Change and Carbon Removal Newsroom podcasts.