6. Non-Platform Tokens

AirCarbon Carbon Token (ACC)

First of all we realise it’s a silly name, however, its name is more of a placeholder for now. Every ACC token represents a carbon credit backed by a nature-based solution. The specification comes from AirCarbon’s Global Nature Token spec (see below).

Geographical Scope: All regions

GNT Eligible Registries & Methodologies:

· Climate Action Reserve (CAR) - Voluntary Offset Project Registry Carbon Emission Units from an approved CAR registry project qualifying and verified under CAR protocols for Grassland, Canada Grassland, Forest, Rice Cultivation, Urban Forest Management, Nitrogen Management, Mexico Forest and Soil Enrichment

· Verified Carbon Standard (VCS) – VERRA Registry, Carbon Emission Units from an approved VCS registry project qualifying and verified under Agriculture, Forestry and Other Land Use (AFOLU) sector program methodologies

· Gold Standard (GS) – GSF Impact Registry, Carbon Emission Units from an approved GS registry project qualifying and verified under GS Agriculture or Afforestation/Reforestation (A/R) methodologies

Vintage & Eligibility: Vintages of 1 Jan 2012 and after

Credits must be issued and eligible for immediate cancellation

Contract Denominations: 1 GNT Token = 1 tCO2e

Why use the ACX GNT specification?

We chose the GNT for a number of reasons. Firstly, nature based carbon credits are one of the most liquid in the market right now, with high demand drivers and solid supply issuances. Secondly, as these tokens will be interoperable with ACX, we wanted to ensure simplicity by choosing a token speciation that is catch all and not at risk of changing. For example, the Corsia specification for Airlines is due be updated this year, thus there is a risk that currently eligible carbon credits may be pushed out of the specification. Were such an update to happen, credits within ACX can be updated, for obvious reasons ACC tokens are outside of ACX control as such they cannot be updated. Furthermore, choosing an upgradeable specification, such as Corsia would also run the risk for CO2Fi as loans could potentially no longer be over collateralised, for example if the underlying credits were pushed out of a more valuable token standard and into a less valuable one.

How do users bring their GNT out of ACX?

Users of AirCarbon Exchange will be able to withdraw their purchased GNT from the platform into their web 3 wallet, upon withdrawal the GNT will convert into an ACC token. The ACC token still retains all the meta data and the right to the carbon credit underlying each GNT. Once in the users MetaMask wallet, users can deposit their GNT into CO2Fi to gain interest & borrow against it.

How do I claim the environmental benefit of the ACC token ie token retirement?

At present we do not have a function to retire the ACC token, however retirement can still be done on the ACX platform. Deposit your ACC token within ACX and this will be transferred into your ACX account as a GNT token, at which point retirement can be submitted. Please note it is good practice to defragment your ACC before depositing into ACX.

What is defragmentation?

As mentioned previously while ACC is fungible, the unretired carbon credit underlying it is not. ACC is currently fractionalised into kg whereas most carbon credits can only be retired in 1 tonne minimum amount. Thus, a minimum of 1000 ACC is required for any retirement. If a user has bought and sold ACC and been active in liquidity pools, then they may find themselves in the worst case scenario having 1000ACC from 1000 different projects. Whilst this carbon fragmentation does not stop users selling their ACC or utilising CO2Fi, it does cause issues if the users wish to retire the ACC or transfer it to ACX. Users can use CO2Fi’s Carbon Defrag module to see how fragmented their holdings are, if their holdings are too fragmented users can deposit their ACC into the Carbon Defrag Pool which will work towards ensuring users have whole tonnes of carbon from the same projects i.e. batches of 1000ACC from the same project. See the Carbon Defrag module for more details.

I am not an ACX user, how do I buy an ACC token?

The ACC token can be bought on Sushi Swap Dex using USDC.

Can the ACC Token be fractionalised?

Yes, the token is by its nature fractionalised, each ACC represents one kilogram of deliverable carbon credit. The fact that all carbon credits at present, represent 1 tonne of CO2. ACC fractionalises each carbon credit into 1000 ACC. Thus, in order to trade whole tonnes users must transact in volumes of 1000 ACC. Why have we decided ACC to represent a kilogram as opposed to 1 tonne, the reason is to future proof our smart contract. In future as the price of carbon rises and the carbon efficiency of many CO2 emitting functions increases, representing carbon at the kilogram level will be more fungible and useful than on a per tonne basis. In addition in the medium term carbon registries will inevitably use the blockchain for their accounting procedures, which will likely allow fractionalisation of carbon credits. We have developed the Carbon Defrag Module in the meantime to alleviate some of the possible issues of our ACC fractionalisation, these issues almost entirely stem from the specific requirements of ACX.

How is ACC brought onto AirCarbon Exchange?

Project developers who are member of ACX bring their credits to the ACX operations team, who check the project and the credits meet the GNT specification, this work is verified by the British Standards Institute (BSI). Once BSI have confirmed that the credits meet the GNT specification the credits are transferred to AirCarbon’s Carbon registry trust account which is bankruptcy remote from the exchange itself. Once deposited the credits are tokenised into the GNT and placed into the developers ACX account, at which point they can be withdrawn into their Web3 wallet.