Toucan: The Blockchain Project Revolutionizing Carbon Offsetting
It all started at a hackathon a few years ago near Trafalgar Square in London. Raphaël Haupt and James Farrell engaged in a conversation about harnessing the increasing popularity of blockchain and cryptocurrencies to address climate change. The outcome of their discussion was the birth of Toucan, a project that aims to revolutionize carbon offsetting.
Understanding Carbon Offsetting
To comprehend the significance of Toucan, one must first grasp the concept of the voluntary carbon offsetting market. It operates on a simple premise: while companies and individuals strive to reduce their carbon emissions, there will always be a residual amount that cannot be immediately eliminated. Carbon credits provide a means to offset this residual and achieve net zero emissions. The creation of a credit can involve actions like reducing emissions, planting forests, or funding the construction of eco-friendly infrastructure.
The Current State of the Market
Unfortunately, the current carbon offsetting market is in disarray, governed by a network of private standards bodies, each with its own carbon credits registries. John Hoopes, known as John X in the crypto community and in charge of Toucan’s strategy, describes it as an unregulated and highly fragmented global market. The lack of harmonization and interoperability between different registries makes it extremely challenging to navigate.
Toucan functions as a market infrastructure that consolidates physical carbon credits from various registries and transforms and standardizes them into carbon tokens on a single blockchain super-registry. These tokens are then organized into “pools,” from which users receive tradable crypto tokens. The first carbon pool, called BCT (Base Carbon Tonne), represents a collection of credits from different sources, such as tree-planting and pollution reduction, to offset one tonne of carbon emissions.
The Advantages of Toucan
By consolidating the system onto a single registry, Toucan aims to prevent the double-reporting of credits. Additionally, the company has the ability to categorize carbon credit projects based on their age and quality, and customize the types of tokens available to cater to specific buyer preferences.
Toucan’s system offers the flexibility for corporates to align their offsetting activities with their brand image, allowing them to select nature-based or technology-based solutions, or to specify geographical preferences. This adaptability positions Toucan as a game-changer in the world of carbon offsetting.
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