LQIP - 5 - Offset Historical Protocol Emissions and Join Klima Infinity [min 6500 USD]

1. Goals

Liquity to become carbon neutral through offsetting its historical emissions and joining Klima Infinity.

2. Benefit & Impact

Joining Klima Infinity and historically offsetting:

  • First stablecoin in the Ethereum ecosystem to be 100% carbon neutral
  • Co-marketing campaign and partnership to amplify the offset but also to help increase LUSD and protocol awareness
  • Offsetting with on-chain carbon is currently extremely cost effective
  • Reinforces the real-world use case of web3 for positive impact thereby supporting the Ethereum network as a viable solution for additional industrial use cases
    • Help to remove Ethereum’s historical carbon footprint and help with changing the negative narrative about blockchain

3. Context

KlimaDAO is widely recognized for its pioneering role in the nascent Regenerative Finance, or ReFi, movement, which is employing the Web3 tech stack to retool the global financial system so that it is in balance with the needs of the planet. As Forbes recently recognized, ReFi will be a key trend in 2023 and beyond.

KlimaDAO is an active contributor toward the legal framework for Web3 and its applicability to Real World Assets. KlimaDAO works closely with key stakeholders in the Voluntary Carbon Market and is advised and contributed to by individuals with decades of experience in the compliance markets. Within one year KlimaDAO has delivered more than any other major protocol or company in the space, both on and off chain.

Through Klima Infinity KlimaDAO has partnered with protocols like Alchemix to help remove Ethereum’s historical footprint. Moreover, KlimaDAO has leveraged Web3 technology to offer programmatic offsetting such as with Sushi Swap. Lastly, KlimaDAO is one of the most academically researched protocols in the regenerative finance space and is noted as the most technically ready to provide climate-focused tooling.

The demand that was generated by the protocol’s launch did not go unnoticed; more companies than ever before are starting up to capture the anticipated growth of the voluntary compliance markets. As a first mover and with web3 core principals, such as decentralization, KlimaDAO intends to be a go-to solution for any organization looking for climate solutions for their operations.

It is recommended that for those that are interested to learn more that they visit KlimaDAO website and review the abundance of information.

4. Scope & Deliverables

  • Identify type of carbon tonnage that the Liquity team would like to offset
    • Information on types of on-chain carbon can be found here
  • Create pledge dashboard outlining footprint, methodology, and the “Why”
  • Work with team to offset their emissions via their multisig
  • Add proof of offset within documentation (frontend is decentralized)
  • Launch co-marketing campaign

5. Timeline

If passed, it would be desirable to execute within 4 weeks time.

6. Dependencies


7. Ask & Payment

Total cost of offset will depend on which token and its corresponding tonnage the team and community want to utilize. Moreover, if there is a desire to offset or support a particular project such as REDD+ then there will be an additional fee. Total tonnage for Liquity was 4,673 based on Kyle McDonald’s emissions estimates on carbon.fyi. At time of writing the cheapest tonnage on chain was $BCT at $1.32 which this proposals pricing (6500 USD) was based off of. Final cost will depend on the tonnage and or project specificity.

KlimaDAO will not need to receive funds. KlimaDAO will work with Liquity to help them navigate the permissionless retirement aggregator and offset the intended tonnage.

8. References & Useful Links

1 Like

I am not sure I understand the idea behind this proposal. Is the 6500 an actual ask? What would happen if the cost analysis defines that the actual is 10x this number?

1 Like

6500 is the minimum cost based on historical tonnage and the cheapest on-chain carbon tonnes ($BCT). If the community decides that they want to do Nature-based or to support a specific project then it would cost more. Let me know if this is still unclear!

BCT Price: https://www.coingecko.com/en/coins/toucan-protocol-base-carbon-tonne
For more information on on-chain carbon please check out the carbon dashboard here: https://carbon.klimadao.finance/
Liquity’s footprint analysis based on the public contract addresses within the protocol’s docs: Liquity Footprint - Google Sheets

I support this proposal. This is a solid opportunity for Liquity to differentiate itself from other stablecoins - and an opportunity that is increasingly relevant as institutions join the DeFi game and look to align their investments and activities with their Environmental, Social and Governance (ESG) mandates.

Looking into KlimaDAO shows that Mark Cuban Companies and Polygon Technology both utilized them for becoming carbon neutral.

Happy to answer more questions from the community! Would love to collaborate on this since we’re strong believers in the protocol and share values with it.

I feel like this proposal simply falls out of scope both when it comes to Liquity and Liquifrens.

It serves a political objective, which is not the object of Liquifrens. Offsetting is neat of course. You know what else could be cool? Maybe sending money to support Ukraine if we ask some? Maybe sending some for Turkey too as they need help if you ask others.

While all of these are valid causes deserving of support, they are irrelevant to the Liquifrens, who gather, discuss, devise, and act for the best interest of Liquity, its growth, its awareness, or inclusion in the ecosystem. Liquifrens are not an NGO.

And if it’s for marketing, Maker is already exploring this juxtaposition of buzzwords and I’m happy to leave it to them.

The scope has been defined with three general areas and the remaining being open ended. The benefit has been stated as Liquity helping to change the very active narrative that blockchain and cryptocurrency in general has had a negative impact on the environment and that it is useless when it comes to providing benefits or value off chain.

This isn’t a political post nor is it one targeted toward a political agenda. The Ukraine war or referring to Liquity as an NGO is completely out of context of the proposal. Liquity’s smart contracts and more generally the protocol have contributed toward the creation of carbon emissions and therefore Ethereum’s historical footprint. This is simply asking if the community and team behind the protocol would like to aid in removal of the historical footprint.

Marketing is one benefit but not a focus. Again, Liquity would be supporting a real-world use case for blockchain. It is not as direct as growing liquidity or demand for LUSD and that has been explicitly stated.

A second iteration of the proposal, if this one does not pass, could include the swapping or treasury assets of KlimaDAO and potentially with Liquity so that the DAO can hold LUSD or LQTY for some determined amount of time. Would this be more preferable?

To begin with, this is a highly political statement, false on top. Cryptocurrencies have delivered value in the real world in dozens of ways.

So many assumptions there; let me explicit them for you:

  1. Carbon credit works to effectively offset the carbon footprint (huge IF here already)
  2. Klima is indeed successful at capturing said carbon credit
  3. Klima will be able to keep doing so in the long run
  4. Carbon credits will keep working in the long run

I can argue all 4 to be false with credible arguments if you want to walk into this area of the discussion.

Liquifrens are here to make the best use possible of a reasonable, expected-to-be $5-10K LUSD/month source of yield. The goal is to fund community-driven initiatives, integrations, dashboards, etc. Token swaps, once again are out of scope, and I do not get the purpose of this one specifically. Plenty of DAOs are holding LUSD already, because they seek its resilience. If a DAO wants some LUSD, it can mint it or buy it like everyone else.

The upkeep of a computer network requires energy. Energy consumption leads to the creation of carbon emissions. Global scientific communities and other entities have given hard evidence that an increase in carbon emissions has unknown consequences of the already cyclical nature of global climate change.

My point, which you cut off, is that this is the narrative around cryptocurrency/Web3 today. For example, certain enterprise or traditional companies won’t work with a network unless it is carbon neutral so that they can be aligned with their environmental goals.

As for your second sentence, you’re reinforcing my point… I’m glad we can agree. I believe that tokenized carbon is another benefit that can be provided off-chain, you obviously disagree here and that’s okay.

  • Carbon credits, themselves, don’t remove footprint, that is not how they work.
  • Here is a dashboard that covers all the carbon credit projects, their vintage, location, etc. that KlimaDAO has helped to bring on-chain and is currently liquid: https://carbon.klimadao.finance/
  • This is speculative and out-of-scope for this post
  • This is again speculative and an on-going debate since the inception of the Kyoto Protocol

This post was to open the discussion to see if the community and holders of LQTY share similar values. It has become quite apparent from you that this is not the case. It is very obvious where you personally stand on these issues. It is unfortunate that it has been conducted in an unprofessional and baseless manner.

The compromise of a swap or accumulation of LUSD or potential of liquidity was to find a common ground with you, however, again, you have seemed to make it more aggressive than is needed.

Thanks for your consideration.

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