KlimaDAO is proud to sponsor the Funding the Commons x Earth Commons Hackathon, inviting developers and innovators to collaborate in building solutions for one of the most urgent challenges of our time: climate change.
Dates: October 7 - November 7, 2024
Location: Virtual + Optional in-person days in Bangkok (November 6 & 7)
Hackathon Website: https://www.fundingthecommons.io/hackathons
In-Person (Optional) Registration (Nov 6-7): https://lu.ma/ftc-ec-hackathon
KlimaDAO is a public good for the carbon markets, driving transparency, efficiency, and accessibility to carbon credits by leveraging Web3 technology. KlimaDAO also directly funds new carbon projects looking for pre-financing in exchange for newly issued credits, with almost $3 million allocated to-date via our governance process.
We believe that Web3 has a significant role to play in climate finance markets, but that we’re still early. KlimaDAO is eager to see new use cases emerge, and we're incentivized to support this innovation as we ourselves – along with the broader environmental space – will ultimately benefit from the interoperability, transparency, scale and accessibility of on-chain solutions.
Having weathered many challenges ourselves, we’ve continued to innovate and push boundaries. We’re in a unique position to help develop new ideas and approaches, and this hackathon aligns perfectly with that mission. It provides an opportunity for us to mentor and share our knowledge, with the hope of inspiring others, as well as to allocate funds to help create truly impactful tech for our market segment.
As we gear up to our own relaunch of KlimaDAO in early 2025, we look forward to the outcomes of Funding the Commons’ Hackathon as a venue to bring new ideas to the fore, and hopefully get some of them built.
Addressing Key Demand-Side Challenges in Environmental Markets
KlimaDAO’s primary interest is in solving key market challenges related to the tracking, trading and consumption of carbon credits. Whilst the demand-side of the market isn’t the only area of environmental markets that we believe has a need to operate more efficiently and transparently, it is the area that we believe we can affect by playing a role of an innovator and disruptor within the Web3 space.
This perspective frames the challenge statements that we are issuing for the hackathon. Broadly, the challenges we aim to address as KlimaDAO are as follows:
Lack of Market Transparency: The carbon market is complex and fragmented, with limited visibility into project integrity, pricing, and real impact. KlimaDAO's blockchain infrastructure allows for transparent and auditable transactions, enhancing trust and facilitating a more efficient marketplace.
Access to Carbon Credits: Access to carbon credits is often restricted to large entities due to intermediaries and opaque pricing structures, often with high minimum order sizes. KlimaDAO democratizes access to this asset class by allowing any individual or organization to participate in carbon markets directly.
Demand Mismatch and Market Fragmentation: Current markets struggle to align diverse sources of demand with suitable carbon offset projects. KlimaDAO works to aggregate demand and incentivize climate action through tokenized carbon credits, creating seamless interaction between buyers, sellers, and project developers. By supporting real-time, 24/7 settlement of transactions, KlimaDAO unlocks innovative programmatic retirement use-cases.
Liquidity Optimization: Offchain’s margin is onchain’s opportunity, and with aggregate broker spreads between of up to 140% from carbon issuers to end buyers per last year’s ecosystem marketplace report: there is a tremendous opportunity for efficient onchain liquidity solutions. Constant product order books are capital inefficient, centralized order books are efficient but opaque. Building liquidity depth and improving user experience of trading can bolster the transparency, efficiency and reliability of the markets.
Distributed Incentives: One of the core elements of Web3 that has captured the minds of stakeholders across all different industries is the role that incentives can play to stimulate market activity, and distribute the ownership of business models. Klima 2.0 itself will perform a redistribution of all fees accrued by the system across carbon sales, $KLIMA trading, and carbon retirement to the utility providers to the system. Redistributing upside from a system to the users - is a competitive advantage. The system that has the lowest tax rate, the lowest rate of fee internalization - will be the most competitive and the most egalitarian.
Hackathon Challenge Statements
As part of the Hackathon, Funding the Commons asked us to co-create a number of challenges that can be used to inform hackathon participants on what to solve for. However, other novel ideas are of course welcomed!
Successful POCs that address key market challenges or our challenge statements directly, stand a chance of winning up to $5,000 worth of $KLIMA. With second and third place netting $3,000 and $1,000 worth of $KLIMA, respectively
Challenge Statements:
Build Novel Demand for Tokenized Carbon:
Propose a novel use case or mechanism for creating new demand for carbon credits within DeFi, gaming, NFTs, or other decentralized economies focusing on utility and incentivizing adoption.
KLIMA is an interoperable ERC-20 token, representing a basket of carbon credits, and can be thought of as an index of the voluntary carbon market. Some integrations include:
Lending/borrowing
Liquidity
Cross-chain carbon retirement of underlying tonnes via $KLIMA
Liquidity auto compounder
Green autocompounder (automatically retires carbon credits with a portion of the auto compounded amount)
Integration of tokenized carbon, programmatic retirement, liquidity yield, and/or KLIMA w/ existing tokens, such as wstETH or cbBTC.
Data Models
Build an open source data model that is replicable and broadly applicable across carbon classes
Examples include:
Carbon credit project ratings
Aggregating project data from multiple registries
Reference: https://klima.fyi/reference
Attestation Layer:
Build a decentralized attestation tool, integration, or widget where experts, accredited entities, or anyone can attestably vouch for the quality of sustainability initiatives, projects, or data sources, increasing the velocity and veracity of trust on existing social platforms.
Composable Credential Profiles:
Develop a widget that aggregates various credentials, such as environmental certifications or professional qualifications / contributions to environmental projects, into a single composable Base Names profile (https://www.base.org/names) that can be used across the web3 ecosystem.
I.e. 'Certified Carbon Neutral' , 'Certified Climate Positive', with for example an NFT linked to a specific Base Name, effectively a name tag that identifies addresses supporting positive climate action. Social, verifiable, attestable way for e.g. individuals to share their carbon credit retirement activity or companies to promote their sustainability commitments.
DeFi Climate Action Leaderboards:
Design a gamified leaderboard which determines and calculates the carbon footprint to leading protocols on Ethereum and their associated carbon foot print pre-POS, which ranks them based on their sustainability efforts, carbon offset purchases, or other environmental contributions, promoting competition and transparency.
Creation of dynamic carbon emissions dashboards for specific blockchains (pull out some examples).
Decentralized Royalty Distribution for Carbon Credits:
Build a platform or protocol that automates royalty distribution when carbon credits are issued and subsequently transacted, ensuring that creators and initial purchasers benefit from long-term trading activity.
And / or that can pass trading fees back to the originating registry?
Offset Your Life Game/Calculator:
Create an easy to use tool, which people can use to calculate their carbon footprint and automatically offset their life.
Consumer Applications:
Build an interesting IOS or Android application that is fun, sticky, and can potentially embed carbon credit retirement (grow trees, Farmville onchain, etc.)
Eligible for further funding upon creation
Alternatively, integrate onchain carbon credit retirement into an existing game.
Tokenized VERPA Factory:
Build a risk module that allows for the issuance of forward carbon credits onchain
Mathematically solve and optimize product for delivery risk
Next Steps
If you’re keen to get involved with the Hackathon, it's not too late to sign-up for the online sessions.
If you will be in Bangkok for DevCon, don’t forget to sign-up to the in person event using the link at the top of this page.
KlimaDAO’s Marcus recently held a Webinar diving into the Hackathon, some of KlimaDAO’s tooling, and the broader (on, and off-chain carbon markets), check it out for more context, and get inspired.
For more general questions and information about KlimaDAO, jump in our our KlimaDAO Discord Server to engage with the team. Or enter the Funding the Commons Discord Server to learn more about the Hackathon and their work!