Bringing Digital Carbon to Cosmos with NCT

The two-way Regen Network-Polygon bridge and Osmosis liquidity pools bring the dynamic voluntary carbon market to the Cosmos ecosystem

Nature Carbon Ton (NCT) brings digital carbon credits to the Cosmos ecosystem! NCT is a carbon token minted on Regen Network’s Proof of Stake (PoS) blockchain custom-built for global carbon accounting. Backed 1:1 by carbon credits originally issued by Verra, a global leader in the voluntary carbon market, these carbon credits adhere to both Verra’s Verified Carbon Standard and the NCT standard established by Toucan Protocol. This exciting new development brings with it benefits for both the Cosmos ecosystem and the longstanding voluntary carbon market (VCM).

🌌 Carbon Credits for the Cosmos

While the voluntary carbon market has existed since the 1990s, it has grown exponentially over the last half-decade. Between 2020 and 2021 alone, the global value of the VCM nearly quadrupled, going from an estimated $520M to over $1.98B. Between 2020 and 2021, the average price of a carbon credit increased by nearly 60%.

Additionally, projects offering non-carbon environmental and social benefits — a requirement of Regen Network originated carbon credits — saw a rise in popularity in 2021. While this is still an emerging category within the VCM, projects offering beyond carbon benefits invariably command a price premium over standard carbon credits.

As these trends are set to continue, the benefits of bringing tokenized carbon credits, and thus the VCM, to the Web3 world are clear. Already, the Polygon and Celo communities have adopted tokenized carbon credits with multiple liquidity pools. Regen Network and Osmosis will be contributing an initial supply of ~175,000 NCT tokens to Osmosis liquidity pools and Regen Marketplace, or just over 10% of the total market share.

With the launch of NCT, Regen Network is the first protocol to bring this impactful, real-world assets backed financial market to Cosmos. NCT liquidity pools backed by both Regen Network and Osmosis mean Cosmonauts have a unique opportunity to participate in the rapidly growing VCM, earn rewards, and fund ecological projects actively combating climate change.

🧪 Liquidity Pools on Osmosis

In March 2022, the Osmosis community voted to partner with Regen Network to incentivize liquidity pools on Osmosis DEX for the NCT token. In their proposal, Osmosis committed to utilizing their store of $REGEN, as well as 140,000 $OSMO to establish a carbon market on Osmosis launching via NCT:REGEN and NCT:OSMO trading pools. Osmosis and Regen Network have collaborated to incentivize these pools with rewards given in $REGEN at each regular epoch.

Read the governance proposal from the Osmosis community to learn more about the liquidity pools coming to Osmosis this month!

⚛️ Carbon Credits for Cosmos dApps

NCT is an IBC-compatible carbon token backed 1:1 by tokenized carbon credits — a member of the commodities asset class — that provides Cosmos protocols access to a stable, tradable asset that can be easily integrated with Cosmos dApps. The potential for future integrations of NCT is limited only by the imagination of the protocols employing them.

In one example of potential integration, the upcoming Cosmos project, Cosmic Horizon, is currently developing a space trading game that gamifies the purchase and retirement of tokenized carbon credits from Regen Network. Players of Cosmic Horizon can develop and mine planets for resources needed to further gameplay. However, with various planet types, players may not always have access to planets with the specific resources required for their aims. In these instances, players will have a chance to terraform their planets, a process enabled by the purchase and retirement of real tokenized carbon credits sourced from Regen Network.

Regen Ledger 🌉 Polygon Bridge

Regen Network Development has partnered with Toucan Protocol to build a two-way bridge for sending NCT eligible carbon credits between Regen Ledger and Polygon, allowing for cross-chain carbon markets between the two largest regenerative finance (ReFi) ecosystems. Anyone with NCT balances in Polygon is able to utilize the Polygon-Regen Network bridge to transfer NCT-eligible TCO2s to Regen Network and deposit them in Osmosis liquidity pools. Carbon credits ported from Polygon are eligible to return via the same bridge. At this time, tokenized carbon credits that originate on Regen Network are not eligible for transfer across this bridge.

Interested in trying out the bridge for yourself? Check out our bridging guides below!

Polygon to Regen Network Bridging Guide →

Regen Network to Polygon Bridging Guide →

Note: Polygon-based NCTs being bridged to Regen Network must be “2013 vintages” and newer, as there is a 10-year rolling window to add individual credits into NCTs on Regen Network and Osmosis. To do this you will need to use the selective retirement function to ensure you can manually choose 2013 and newer vintages; automatic redemption will pull the oldest credits, which could result in a 2012 vintage credit.

⚡️ Cosmos ZERO

NCT is the first IBC-compatible carbon token in the Interchain economy and allowed for the activation of Cosmos ZERO, a quest for the Cosmos ecosystem to become a carbon-neutral blockchain community. Through the power of community governance, Cosmos Layer 1 protocol communities have been able to offset the carbon footprint of their entire validator set. With its success, Cosmos ZERO became the first cross-protocol governance initiative within the Cosmos ecosystem.

So far, Osmosis, Stargaze, ixo, Evmos, Cheqd, Regen Network, Gravity Bridge, and Empower communities have committed to becoming carbon-neutral with the help of Regen Network. Cosmos ZERO lays out the steps to becoming carbon-neutral, including calculating a carbon footprint, submitting community governance, as well as, purchasing and retiring tokenized carbon credits.

If you or your protocol are interested in becoming a carbon neutral blockchain or validator, be sure to check out the Cosmos ZERO guide and join the Telegram group.

👩🏻‍💻 Blockchain for a Digital Carbon Market

Carbon credits are real world commodities, which have recently become tokenized onto blockchains for increased market efficacy, transparency, and liquidity. Though not a full solution to our planet’s future in the face of climate change, the VCM does bring critical capital to regenerative projects and improved climate accounting for governments and businesses.

Providing capital to regenerative land projects regardless of scale

The primary objective of the VCM is to funnel money to projects doing on-the-ground work to protect and restore the health of our planet that likely wouldn’t otherwise be able to fund their operations. However, with the use of intermediaries and brokers, projects originating credits have not traditionally seen the full value of credit sales. Regen Marketplace eliminates this issue by allowing projects to sell directly to interested buyers, thus eliminating heavy middleman fees.

In addition to ensuring projects receive the capital generated from the sale of credits based on their regenerative work, this direct seller-to-buyer model enables the participation of small scale projects. In many cases, projects with relatively few generated credits would be overlooked in the traditional model. Large entities require massive quantities of carbon credits, which are more easily sourced from major projects capable of producing a high number of credits. By contrast, any project meeting the methodologies and standards approved by Regen Network may use the Regen Marketplace to originate and sell ecocredits, thus providing funding regardless of scale.

Credit tracking from origination to retirement

The VCM has previously undergone scrutiny for its lack of transparency regarding credit origination and value. The very nature of blockchain technology eliminates this issue. Regen Ledger tracks the history of each individual ecocredit, from origination to retirement. Tokenized carbon credits contain metadata relevant to its originating project, credit standard, and impact. This information is publicly available on par with traditional blockchain transactions.

This increased transparency helps potential buyers to self-educate and eliminates the need to trust in a third party for credit information. However, most importantly, this eliminates the double counting of credits, an ongoing issue of the traditional VCM.

Improving access and liquidity

As the traditional VCM caters to major corporations and large entities offsetting massive carbon footprints, the market for individuals looking to offset their carbon footprint has been largely underserved. Rather than requiring a relationship with an existing registry or carbon credit broker, purchasing on-chain credits requires only a Keplr wallet.

NCT pools available on the Osmosis decentralized exchange enables blockchain wallet holders to easily acquire NCT tokens, which can then be redeemed for their underlying carbon credits.

🤝 NCT and beyond

The introduction of NCT to the Cosmos ecosystem is a major development benefiting both the VCM and the Cosmos ecosystem. Blockchain tech is able to provide key functionality to improve the flaws in the traditional VCM model. In turn, tokenized carbon credits bring a rapidly growing commodities financial market to the Cosmos ecosystem, where it can be utilized by anyone, Web3 and beyond.

🔍 Looking for technical support?

• Discord ➡️ Ask questions, find resources, and talk to the community on our #technical-support channel
• Twitter ➡️ Tweet questions or report bugs with #RegenBridgeHelp
• Email ➡️ Reach out with more complex issues to sales@regen.network
• Learn more about NCT with our NCT Guide!