Six Big Changes Coming With Klima 2.0

As you may be aware, Klima 2.0 is coming! It’s an understatement to say we’re excited about everything we have in the works.

Aside from rolling out new tech and a new tokenomics model, one of the big tasks ahead of us is communicating all of the changes to our existing community and to the wider Web3 world. That process starts here!

This is the first of three articles we’ll be publishing to set the scene for our relaunch. We want to lay the foundations for what’s coming with an open and honest look at where we’ve come from – and some differences you can expect going forward.

The second article will explore Klima 2.0’s new token ecosystem. The third article will detail how we’ll be transitioning to the new carbon-backed $KLIMA token and the $KlimaX governance token, using a staking system designed to synthetically price illiquid assets, like carbon, and reward carbon provided to the new platform.

For now, though, we’re going to take a little time to explain what we’ve always wanted to achieve, some of the challenges we faced with KlimaDAO 1.0, and how Klima 2.0 addresses them.

1. Carbonmark: Frontend For Carbon Markets

Back when we started, we ran into problems sourcing carbon credits quickly and at a good price. These are fragmented markets, with different registries, compliance standards, and geographical restrictions, and with limited transparency and interoperability. Access is usually facilitated through brokers via Over-The-Counter (OTC) deal flows. Breaking into that scene – especially as a decentralized entity – was very tough.

Our work on Carbonmark has been instrumental in changing that. Since spinning Carbonmark out into a separate company, we’ve spent over $2 million on R&D and have built a platform that leverages blockchain technology to issue, buy, sell, and trade environmental assets, seamlessly connecting to third-party applications. The result is a critical piece of infrastructure for next-gen carbon markets, and for Klima 2.0. Carbonmark is the interface layer to TradFi carbon: the missing link that enables us to create vital interoperability with legacy markets, helping drive on-chain liquidity and power real-world applications.

2. Fully Automated And Trustless

In our early days, the lack of APIs meant we weren’t able to take advantage of two of Web3’s most important features: trustlessness and automation. Instead, we were forced to interact manually with suppliers.

Carbonmark has again been transformative, allowing us to create a transparent, scalable business model. The platform links to thousands of retail storefronts and acts as a kind of meta-aggregator. Right now we’re seeing around 9,000 transactions a month going through Carbonmark and settling via Klima liquidity providers – and that’s just the start.

3. Decentralization As The Means, Not The End

Our initial structure as a fully decentralized DAO – essentially a dispersed community of individuals – meant that it was hard or impossible to interface with traditional systems, legally and financially.

Like other major Web3 projects, we have now adopted an approach that includes more formally defined groups within that umbrella. Most importantly, we established Klima Foundation, a Swiss non-profit Foundation that acts as a real-world-facing entity with a transparent team that can interact with other traditional organizations.

This step represents a more nuanced approach to the way we operate, and has removed much of the uncertainty and ambiguity that previously held us back.

4. A New Home On Base

The Klima Protocol started life on Polygon. Back then, Ethereum (on which Polygon is built) was proof-of-work, which presented something of an optics problem for launch: we would be asking the world to offset their CO2 emissions using a platform that itself had a significant carbon footprint. At the time of Klima’s launch, Polygon committed to going carbon neutral, announced a $20 million environmental fund, and offered lower fees than Ethereum on transactions while maintaining the integrity of a decentralized ledger.

Since then, Ethereum has moved to proof-of-stake, reducing its energy consumption to around the same as that of a small office.

With the deployment of Carbonmark’s API and the subsequent volume of transactions we were making, we unfortunately saw significant fees and frequent transaction failures. Back in April 2024 we migrated from Polygon to Base network: a thriving L2 that ranks #1 for TVL and has fees 100x cheaper than Ethereum, while maintaining a high level of throughput and reliability. $KLIMA holders have already received over $22 millionin $AEROrewards for supplying liquidity to Aerodrome, Base’s leading DEX. Klima is currently the seventh protocol by holdings of veAERO, Aerodrome’s governance token, using these tokens to direct liquidity incentives to $KLIMA LPs on Base. Base is Klima 2.0’s new home and we’re very optimistic about our future there.

5. Success Is The Best Marketing

The idea of earning yield to offset global carbon emissions is not the most intuitive or believable concept, and at times we struggled to convince people.

The Klima Protocol has now retired around 2 million carbon credits, by various means, and will continue to programmatically burn credits forever! While communicating the value of our approach still has its challenges, a strong track record helps a lot. “Show, don’t tell” is a powerful tool.

6. Sustainable New Tokenomics

Back at the outset, we were in a position where we needed to bootstrap activity within a fairly inefficient system. The key means of achieving that was issuing tokens for incentives. Unfortunately, the number of $KLIMA required to kickstart the engine had a pretty devastating effect on price, creating a downward spiral.

In the near future, we’ll be publishing details of our new tokenomics model, which is designed to be far more sustainable. Klima 1.0 was an inflationary accumulation model. Klima 2.0 is designed as an appreciation model, which we’re going to use to do something pretty cool. More about that in the next article…

7. Introducing The Rebranded Klima Protocol

This last one’s a bonus. The launch of Klima 2.0 is the perfect opportunity to roll out a fresh and fun new look, with updated messaging and a lighthearted feel that we think will resonate well with our audience.

Ultimately, we all want to do good, and saving the planet is a serious business. But in an ideal world, reducing carbon emissions should be profitable and easy, too. That’s a big part of how we’re going to attract the next wave of interest in Klima.

Klima has been overlooked for too long, so if you like an underdog, then you're going to love what comes next.