[MCO2] - Moss Carbon Credit MIP6 Collateral Onboarding Application

1. Who is the interested party for this collateral application?

Moss.earth, the issuer of tokenized Carbon Credits MCO2 and we can offset all the carbon footprint generated by the ethereum mining. We have 4 mln of liquidity on uniswap and 40 mln markecap.

(https://etherscan.io/token/0xfc98e825a2264d890f9a1e68ed50e1526abccacd)

2. Provide a brief high-level overview of the project, with a focus on the applying collateral token.

MOSS was founded with the mission to tackle global warming and to foster sustainable actions ensuring a better planet for future generations.

This is why we created the first and largest platform specialized in the purchase of carbon credits from the Amazon forest. By purchasing carbon credits, you also support the world’s most vital, irreplaceable asset: Planet Earth.

The token is an ERC20 which represents 1 ton of CO2 whose emission was avoided and certified. You can find more information on https://mco2token.moss.earth

3. Provide a brief history of the project.

MOSS is an environmental platform, a website that provides carbon credits transactions to individuals and companies of any size that want to offset their emissions.

In the short time since our founding in 1Q 2020, we have established ourselves as the largest carbon platform and climate tech in the world. We have already transacted more than 900 thousand tons of CO2 (comparable market value in Europe of US$ 25 million) in just over 8 months.

Currently, we are focused on simplifying and making it easy for clients to buy carbon credits from Amazon projects because we consider that, out of all carbon credit projects, Amazon forestry projects are the ones that have the greatest impact in social, environmental and economic terms.

We believe that the ultimate objective of carbon credits is their retirement for the purposes of compensation. Tokenization facilitates users’ ability to compensate for carbon emissions more easily and in a broader range of circumstances.

Our tokenization of carbon credits via the issuance of MCO2 Tokens, which increases the security of carbon credit transactions and trackability by further programming into blockchain an asset that is already digital, improves the possibility of composability of carbon credits.

We believe that the MCO2 Token will enable others to innovate and create new applications for carbon credits.

For example, since we have designed MCO2 Token structure to be as simple as possible, we believe that it has the potential to become a “primitive”, or “building block” in token parlance. The MCO2 Token will enable users to embed carbon offsetting in other tokens and smart contracts, to build applications allowing consumers and small businesses to offset their activities and purchases and to create new applications we have not yet imagined.

The MCO2 Token does not bring innovation to markets or trading, but rather innovation in usability for offsetting. The revolution that MOSS MCO2 Token brings is not a revolution in markets or market structure. It is a revolution of utility, programmability and composability

We believe that the tokenization of carbon credits via the creation of a simple crypto asset, the MCO2 Token (“MOSS Carbon”), in which every single MCO2 Token represents one voluntary carbon credit and has its ledger publicly available for any holder to check and audit at any time, leads to several benefits for the voluntary carbon markets:

Given the simplicity of the token structure, it has become a “primitive”, which in crypto parlance is equivalent to a “building block” that other innovators can use to create other functionalities and products on their tokens, smart contracts, fintech apps, etc. We believe that the world is beginning to incorporate carbon offsetting in industrial processes, products, services, and way of life. Today, that is hard to do because of the complexity of sourcing high quality credit and retiring them in flexible quantities. We have designed the MCO2 Token to enable innovators to add this functionality and to easily embed offsetting in their inventions simply by plugging/tapping into the MCO2 Token.

We have designed the MCO2 Token structure in a functional and flexible way to facilitate this process, including for example a mechanism for retirement that smart contracts and other algorithms can simply ‘call’ to API-style mechanisms without human intervention. Our goal is to turn the MCO2 Token into the easiest, most functional “primitive.” If eventually adopted and used by other innovators, the MCO2 Token may potentially lead to far higher consequences in terms of innovation than if it is simply bought by individuals for holding for the long term or for personal offset purposes.

In order to have the highest credibility possible for its underlying ledger, MOSS carries out an extensive due diligence of the environmental projects that generate the carbon credits. MOSS only purchases credits that are certified in the most respected and credible global registries, following rigorous globally recognized certification protocols and audit procedures, and MOSS does its own legal, background and reputational checks prior to purchases. MCO2 Token buyers can rest assured that the underlying assets are among the highest quality possible in the global voluntary market.

4. Link the whitepaper, documentation portals, and source code for the system(s) that interact with the proposed collateral, and all relevant Ethereum addresses. If the system is complex, schematic(s) are especially appreciated.

Whitepaper can be found at: Moss_white_paper_english.pdf - Google Drive

MCO2 token: https://etherscan.io/address/0xfc98e825a2264d890f9a1e68ed50e1526abccacd

5. Link any available audits of the project. Both procedural and smart contract focused audits.

CERTIK audited the smart contracts and you can find it on https://static.moss.earth/Audit_Report_CertiK.pdf

Armanino is auditing the issuance of carbon credits on MCO2 token, along with its ledger.

(https://moss.earth/wp-content/uploads/2021/02/Moss.Earth-AUP-Report-2021-Final-External.pdf)

6. Link to any active communities relating to your project.

· https://www.linkedin.com/company/moss-earth

· Login • Instagram

· Moss Earth - YouTube

· https://twitter.com/moss_earth

· Redirecting...

7. How is the applying collateral type currently used?

The asset is traded on exchanges can be holded or just burned in case of carbon neutral purposes for companies or persons. CO2 emissions have an extremely negative effect on the environment and cause global warming. Especially in the travel industry, a really high number of greenhouse gasses are emitted. In order to turn the negative into something positive, the collateral neutralise carbon footprints by investing in projects that reduce or avoid carbon emissions.

8. Does one organization bear legal responsibility for the collateral? What jurisdiction does that organization reside in?

Moss will be responsible for the token. The organization is in the Cayman Islands.

9. Where does exchange for the asset occur?

Currently it is being traded on flowBTC (Brazil) and Uniswap, MercadoBitcoin and Probit.

You can see more on CMC and coingecko.

10. (Optional) Has your project obtained any legal opinions or memoranda regarding the regulatory standing of the token or an explanation of the same from the perspective of any jurisdiction? If so, those materials should be provided for community review.

Moss.earth made legal opinions with blockchain experts and can be found on:

https://drive.google.com/file/d/1O8Pl6R4ObIHgR-Dc_vrUCIxRMa63T6JH/view?usp=sharing

https://drive.google.com/file/d/1dKP_pN4Aq_-UTklU5vWZNdVml3LqNq4r/view?usp=sharing

11. (Optional) Describe whether there are any regulatory registrations for the token and provide related documentation (including an explanation of any past or existing interactions with any regulatory authorities, regardless of jurisdiction), if applicable.

N/A

12. (Optional) List any possible oracle data sources for the proposed Collateral type.

N/A

13. (Optional) List any parties interested in taking part in liquidations for the proposed Collateral type

MOSS.earth on Uniswap can take part in liquidations providing liquidity to the pool.

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Heads up that this link appears to be broken?

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Are these credits applicable under any government cap-and-trade systems?

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@ber Just a few initial questions on this application:

  • Is this related to a crypto-native (trustless) asset or real-world asset? It is not fully clear.
  • Can we have a little more clarity on the actual liquidity & volume of trade of the asset? e.g. 4M on uniswap
  • Do we have the open source code for the smart contracts on git?
  • How is value originated from the asset: any cashflow generated or purely market driven?
  • Who are the counter-parties involved, if any? What are their roles in the asset structuring?
  • How is pricing monitored: are there any oracles built to carbon credits brokering markets?
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Thanks for the questions @williamr !

  • Is this related to a crypto-native (trustless) asset or real-world asset? It is not fully clear.

It’s a real-world asset. Although the underlying asset is basically a digital native certificate, issued by Verra, the global standard of voluntary carbon credits, it’s a global commodity, an asset that has economic value in the real-world.

  • Can we have a little more clarity on the actual liquidity & volume of trade of the asset? e.g. 4M on uniswap

Monthly volume has been around 16M USD at Mercado Bitcoin and Uniswap. Liquidity at Uniswap is above 4M USD.

  • Do we have the open source code for the smart contracts on git?

https://etherscan.io/address/0xfc98e825a2264d890f9a1e68ed50e1526abccacd#code

  • How is value originated from the asset: any cashflow generated or purely market driven?

Carbon credits are digital certificates that help humanity to compensate for carbon emissions, thus internalizing an environmental cost that’s usually not clear to individuals and companies because of it’s collective nature.

  • Who are the counter-parties involved, if any? What are their roles in the asset structuring?

All MCO2 tokenized credits are issued and certified by Verra Global Registry. Verra allows certified projects to turn their greenhouse gas (GHG) emission reductions and removals into tradable carbon credits. Since its launch in 2006, the VCS Program has grown into the world’s largest voluntary GHG program.

  • How is pricing monitored: are there any oracles built to carbon credits brokering markets?

The market is free. There’s no need for oracles. In fact, blockchain is enabling the traditional carbon credit market to work globally, thus transforming carbon credits into a global commodity with a better price discovery mechanism.

Are these credits applicable under any government cap-and-trade systems?

No, they are applicable for the voluntary market only. We’re the largest voluntary market platform in the world and companies can offset their carbon footprint in a voluntary manner.

Heads up that this link appears to be broken?

Please refer to mco2token.moss.earth

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Also MCO2 token has no positive correlation with BTC or ETH.

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So I went into the call about this today really, really wanting this one to work for us. But I feel perhaps it needs to be tabled for now. Here’s my thinking:

  • The credits are used on the voluntary market. I feel this makes them susceptible to negative shocks since there is no regulatory backstop that will require the tokens/credits to insulate them from volatility in public opinion.

  • The credits are sourced from a small number of partners/projects. Related to the above, I would like to see more diversification of partners and projects to minimize risk of a single negative shock to public opinion of these tokens being “good enough” to count as fulfilling a public pledge by an organization.

  • All the projects currently use a methodology that while the standard for certification, has recently come under both press and academic scrutiny as substantially overestimating the number of CO2 credits generated. I have no personal opinions on this, but diversification amongst methodology in sourcing the credits would help insulate against a sudden re-rating by any certifying body (like FCS) or criticism by prominent environmental organizations.

  • There are not large barriers to entry in this market. While I’ve not seen competitors at scale, I have seen artists packaging CO2 credits with NFTs on OpenSea.io. If it’s that easy, someone else could do it at scale, and fragment the market for tokenized CO2 credits, resulting in a long-term threat to these tokens retaining value as collateral. The fact that CO2 credits are a fungible commodity means the actual MCO2 token has to provide any barriers to entry for competition, and avoid half a dozen lookalikes splitting the market into such small pools as to render the token illiquid or even unmarketable.

  • I was very happy to hear there is a mechanism to burn these tokens as a method of retiring the credits. But I would like to learn more about how MOSS can monitor claims by organizations claiming to have utilized these tokens as consumers (as opposed to holding them as an asset). This seems like it would take a lot of energy, but probably isn’t impossible. I’d like to hear more about that, and wish I’d thought to ask on the call. Given that these are tokens that some end user will plan to effectively throw away, but it is entirely voluntary to both do so and verify it, I worry that rather than disposing of tokens, a malicious actor could demonstrate purchase, claim they are consuming the credits, collateralize them for a debt they have no intention of repaying, and then hope that no one is scrutinizing them closely enough to actually audit their crypto holdings as part of an environmental policy review. This is where a government agency that verifies not just ownership but consumption to avoid double counting would be really helpful.

Overall, I am super stoked about the idea behind this: A real-world, intangible asset that is tokenized and is consumable. Environmentally positive? A nice plus.

Unfortunately, while I don’t see MCO2 tokens as unviable assets based on these concerns, I’m not sure they’re appropriate for collateralization at the moment. Most of my concerns can be answered with scale – diversification of counterparties and methodology for sourcing. Scale may also provide a deep and liquid enough market to fend off competing tokens that would cut into the marketability of MCO2. Regulatory acceptance or requirement of these tokens would also change my opinion, as the market would not dry up overnight in the event of some unexpected public relations event on the part of MOSS or its counterparties.

I should note that I am not on the Risk or RWF teams, and my opinions represent only that of myself, and should not be misconstrued as anything else.

I welcome comment from other DAO members or from the applicant.

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Looks like Carbon Credit prices are trending higher and analyst expect the trend to continue. Unfortunately the Moss Token value has inverted–any idea why there’s a disconnection?

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Hi everyone,

I’d like to touch base here to say that we appreciate the time and energy you all spent on Moss on our call and here in the thread, specially @PaperImperium. All important feedbacks. Moss is evolving a lot as a company lately and we will work our best to be ready for this move.

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