How Crypto Can Be Good for the Environment | Klima DAO

Bankless Nation, meet Klima DAO, the carbon-backed digital currency and algorithmic climate protocol. Dionysus, Archimedes, and Oxylos join to discuss bringing environmental incentives to DeFi, using similar mechanics to OlympusDAO and the OHM token. Klima DAO plans to generate on-chain demand for carbon offsets and build a carbon-backed treasury, with the goal of driving up the price of carbon. Who said crypto was bad for the environment? For Bankless readers, it should come as no surprise that the powers of DeFi can be leveraged to incentivize coordination around public goods. (🌳,🌳) ------ 🚀 SUBSCRIBE TO NEWSLETTER: https://newsletter.banklesshq.com/ 🎙️ SUBSCRIBE TO PODCAST: http://podcast.banklesshq.com/ 🎖 CLAIM YOUR BADGE: https://newsletter.banklesshq.com/p/-guide-2-using-the-bankless-badge ------ BANKLESS SPONSOR TOOLS: 💰 GEMINI | FIAT & CRYPTO EXCHANGE https://bankless.cc/go-gemini 🔀 BALANCER | EXCHANGE & POOL ASSETS https://bankless.cc/balancer 👻 AAVE | LEND & BORROW ASSETS https://bankless.cc/aave 🦄 UNISWAP | DECENTRALIZED FUNDING http://bankless.cc/uniswap ------ Topics Covered: 0:00 Intro 4:45 Dionysus, Archimedes, and Oxylos 6:35 Klima DAO & Carbon Markets 14:10 Voluntary Economy 17:45 Relationship with OlympusDAO 25:00 Tokenomics 33:33 Inducing Demand 35:02 Ponzi Games & Game Theory 42:41 Opt-In Social Incentives 46:06 Roadmap and IDO 51:52 Slaying Moloch 57:52 Closing & Disclaimers ------ Resources: Klima DAO https://klimadao.finance/ Discord https://discord.gg/kx4pahaFw8 Klima DAO on Twitter https://twitter.com/KlimaDAO?s=20 ----- Not financial or tax advice. This channel is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This video is not tax advice. Talk to your accountant. Do your own research. Disclosure. From time-to-time I may add links in this newsletter to products I use. I may receive commission if you make a purchase through one of these links. Additionally, the Bankless writers hold crypto assets. See our investment disclosures here: https://newsletter.banklesshq.com/p/bankless-disclosures

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:08David Hoffman?

  Hey Bankless Nation. Today, I'm talking with three members of Klima DAO. Klima is a fork off of Olympus DAO, which is a treasury-backed algo-stablecoin. But Klima has repurposed that same model to help sequester carbon out of the environment. And this is a climate-focused DAO that is generating a currency that is backed by carbon credits. So it's one part offering financial exposure to carbon credits, which have been a fantastically performing asset in 2020. And from what I've gathered, this is an asset that as carbon gets more and more expensive, which the trend is that it does get more and more expensive, this treasury asset by Klima DAO also in theory would go up in value.

• 0:51David Hoffman?

  This project is tackling the idea of making carbon production extremely expensive, while also allowing nonprofits or companies that actually sequester carbon and actually earn carbon credits that make them more valuable, right? So it's just net positive in the sense that it disincentivizes carbon production and incentivizes carbon sequestering. This project really gets me excited because it's one of the core foundational principles of crypto that we can coordinate at larger scales than nation-states, because nation-states aren't solving the climate problem. Maybe they can help mitigate it. Maybe there's some efforts that's happening. But in terms of actually really turning this whole climate change thing around, I think it's going to take coordination scales that are larger than what we currently have,

• 1:37David Hoffman?

  which has always been why crypto has been so exciting, like coordination around larger problems. And that's what I see coming out of Klima DAO. So let's go ahead and get right into this interview with the folks from Klima DAO. They were fantastic interviewers. They're all anonymous, so there's only my face that you're going to see, but you're going to see their little avatars light up when they speak. And then if you're watching on the podcast, don't even worry about that. And overall, they were fantastic guests, very hard-hitting, very precise in their speech. So they were just lovely to interview. So let's go ahead and get right into that interview. But first, a moment to talk about some of these fantastic sponsors that make the show possible.

• 2:19David Hoffman?

  Hey guys, in the second half of the show, we died even Bankless is proud to be supported by Uniswap. Uniswap is a new paradigm in asset exchange infrastructure. Instead of a cumbersome order book system where trades are matched with other humans, Uniswap is an autonomous piece of software on Ethereum, which is what Ryan and I call a money robot. No human counterparties or centralized intermediaries, just autonomous code on Ethereum. Input the token you want to sell and receive the token you want to buy. Something brand new in the Uniswap ecosystem is the Uniswap Grants Program is now accepting applications for grants. We have been saying this for a while and we'll say it again. DAOs have money and they are in need of labor. If you think that you have something to contribute to the Uniswap DAO,

• 3:03David Hoffman?

  apply for a grant to Uniswap. Just look at the size of the Uniswap treasury. It's almost $3 billion. This mountain of capital is looking for labor. Do you have something of value to contribute to the Uniswap DAO? No matter how big or small your idea is, you can apply for a uni-grant at unigrants.org and help steer Uniswap in the direction that you think it should go. That's exactly what we did to get Uniswap to be a sponsor for Bankless and you can do the same for your project. Thank you, Uniswap, for sponsoring Bankless. Balancer is a powerful platform for flexible automated market makers. Typical AMMs just have two tokens inside of one liquidity pool, which can lead to fractured liquidity across the many pairs in DeFi. With Balancer, you can access the full power of multiple tokens

• 3:48David Hoffman?

  inside of one single AMM, which unlocks an entirely new playing field of possibility. This makes Balancer an awesome building block for so many different use cases. Balancer pools can make asset indices, but instead of paying fees to portfolio managers, Balancer lets you collect the fees from traders who use your portfolio for liquidity. Additionally, Balancer smart pools can be programmed to have properties that change according to predetermined rules, such as changing the swap fee based on market conditions. Or even liquidity bootstrapping pools, which can help you launch and distribute your token with day one liquidity. At Bankless, we use a liquidity bootstrapping pool to sell our BAP t-shirts to much success. Balancer V2 brings powerful new features that makes your money work even harder for you.

• 4:31David Hoffman?

  In V2, idle tokens are capable of generating yield in DeFi without sacrificing liquidity in the pool using Balancer's asset managers.

• 4:40David Hoffman?

  Balancer's Vault Architecture lets you trade between balancer pools at a fraction of the cost versus trading on other platforms. Balancer's mission is to become the primary source of liquidity in DeFi by providing the most flexible and powerful platform for asset management and decentralized exchange. Dive into the balancer pools at app-balancer.fi. All right, Bankless Nation, I am here with three team members from Klima DAO, which is a carbon-backed digital currency and algorithmic climate protocol. And today, we are going to find out what the hell that means and more about what Klima DAO actually is. So guys, you guys want to take turns introducing yourselves, starting with Dionysus?

• 5:22Speaker 01

  Cheers, David. Great to be here. So yes, I'm Dionysus. I have a background in carbon markets and in the environmental field, ranging from project development and ecosystem restoration, remote sensing technologies, et cetera, and been a big fan of DeFi over the years and luckily hooked up with the right people to help make Klima happen. So that's me.

• 5:43David Hoffman?

  Fantastic. Our communities, how about you?

• 5:46Speaker 02

  Yeah, great. Great to be here. Thanks, thanks, David, for having us. I'm mostly an engineer. I've built everything from MVP to production-grade stuff in all sorts of fields in DeFi under a number of names. And so really stoked to be working on something too. And like, I also have a background in carbon markets and building ecosystems in that space, too.

• 6:08David Hoffman?

  Fantastic. And I'm going to try not butcher this name, but here it goes. Oxylus? Oxylus?

• 6:14Speaker 02

  Yeah.

• 6:15David Hoffman?

  How was that? And then also, tell me about yourself.

• 6:18Speaker 03

  That was great. Thanks. Yeah, I mean, again, great to be here as well. So I sit right between the other two. Basically, I'm also an engineer, but I've been like diving deep in carbon markets for a long time now and kind of building stuff at the intersection of crypto and climate, kind of like merging the two. And with a special focus on DAOs, and here we are building a DAO that is actually doing exactly that, bringing all these pieces together.

• 6:42David Hoffman?

  All right, guys, so let's go ahead and get right into it. What is Klima DAO? What are its goals? And why do we need it? And I'll let you guys decide who should answer that first.

• 6:52Speaker 02

  Okay, I'll I'll take this on because I think I've done a thousand pitches at this point to various people. Um, so clean it down. What is it? Well, basically, we are. We're using the mechanics of Olympus and to basically create a non-chain demand for carbon offsets. And the way, the reason for this is basically you want to create demand and basically suck up the supply of carbon offsets and place them in a treasury and create a currency that's issued and backed by carbon offsets. So using carbon as the the denomination of currency value. And why do we need this? Well, there's a number of reasons why we need this, but primarily it's it's it's to drive the price of carbon up.

• 7:31Speaker 02

  And basically to create pressure on individuals, corporations, everybody who are basically purchasing offsets to actually do something about their footprint instead of buying their way out of it.

• 7:42David Hoffman?

  Okay, so uh, I mean, I'm I'm gonna interrupt you guys and just like, you know, check my understanding every now and then. And so my my understanding is that there there are these carbon credits out there. Uh, carbon credits are not anything to do with crypto. They are, you know, credits like generated by a government policy. Uh, to allow some sort of free market to help uh, manage the control of carbon. Uh, and you guys are trying to uh, capture and hoard as much carbon credits as possible using the same, using a fork of Olympus Dow. And the idea is that if you generate a currency that is backed by these carbon credits, the carbon credit treasury grows and grows and grows.

• 8:22David Hoffman?

  Which is kind of like a pseudo way to sequester carbon from the world by hoarding carbon credits using crypto tools. Is that right?

• 8:31Speaker 03

  It's it's pretty close. Um, it's basically, there is a difference, right? Because you're you're touching carbon credits. So there's a difference between the compliance market, which you just mentioned, which is, you know, governments that give out the right to pollute, which are also called emission allowances. And then the what are called carbon offsets, which are generally uh, carbon projects with actually plant trees or uh, you know, renewable energy projects that are created and then um, audited by third-party standards and then create these carbon offsets, which um, are not really uh, government-controlled.

• 9:04Speaker 03

  But so that's called the voluntary carbon market. And KlimaDow starts by interacting with this latter one. So the voluntary carbon market, which is the only true global carbon market out there. Right. Because the other ones are always linked to a certain jurisdiction. So we start off with the voluntary carbon market.

• 9:20David Hoffman?

  So this is like an opt in market. No one is forcing companies, but they just do it of their own incentives just to be good entities in the world. In the world.

• 9:30Speaker 03

  Pretty much. Yeah. I mean, if you hear, you know, the Microsoft, the Blackbro, so the world coming out with, we're going to be carbon neutral. Or even we're gonna, you know, compensate for our historic footprint. What they talk about is exactly this, this market, the voluntary market, which has been grown like quite, quite a lot these last year because more and more companies come out and make claims about, you know, their climate targets. So, but, you know, that definitely did die on his eyes is even is the guy to talk to if you want to know much more about the intrinsic, like the all of the intricacies of this market.

• 10:03David Hoffman?

  Totally. Yeah. Our community, you guys have anything to add?

• 10:09Speaker 01

  Oh, yeah. I'd just say that, you know, there's a number of factors right now that are really driving the voluntary carbon, carbon market forward. One, you have like massive commitments by different corporates because of consumer pressure oftentimes that, you know, we want to be buying products that are green or that have less impact on the environment. So these companies are internalizing that the negative environmental costs. And, you know, they're rectifying that through the purchase of carbon offsets. And I think the key piece with carbon offsets is that these are delivering finance to sustainability projects around the world that are helping to either mitigate the release of carbon emissions or actually remove them from the atmosphere. So on the removal side, you have things like a forestation projects, you know, simply planting trees or mangroves.

• 10:52Speaker 01

  And on the mitigation side, you have projects, you know, such as solar or wind energy installations that are, you know, basically stopping fossil fuels from being, you know, feeding electricity into the grid. Instead, you're doing it in a renewable way.

• 11:06David Hoffman?

  Okay, so check my learning on that one. There are a bunch of projects, nonprofits, entities, maybe even companies that are are able to produce carbon offset credits based off of what they are doing. And A, is that correct? And then B, when they produce these carbon offset credits, if they are higher valued in the market, these companies are more sustainable, more fundable, more profitable, and therefore more sustainable.

• 11:35Speaker 01

  Yeah, there's a really foundational piece to the voluntary carbon market and carbon offset projects in general, and that's this idea of additionality. And what that means is that all of these projects wouldn't have happened, let's say, naturally in the market unless they were given this additional finance from the sale of carbon offsets. So for instance, you know, next year, you won't be able to produce carbon offsets from renewable projects in countries like, you know, the United States or in Europe because renewables in those countries, you know, they're already cost competitive with fossil fuels. You don't need the additional finance to make them realized essentially, but you'll still be able to issue offsets for renewable projects in places like India, for instance, where, you know, you still need that extra nudge to make sure that instead of producing

• 12:19Speaker 01

  another coal powered power plant, you're instead erecting wind turbines, for example.

• 12:27David Hoffman?

  Okay, so but the the original like model that I gave, I want to just double check and make sure that's true. Climadao is trying to purchase and hoard as much credits as possible in order to like add scarcity to the secondary market, which is is good because that makes producing carbon more expensive and it also makes sequestering carbon or all these renewable sources more profitable. That's the model?

• 12:54Speaker 03

  Hundred percent, yeah. So I mean, you can think of essentially, we're game stopping almost the voluntary carbon market, right? So we're creating, we're using the incentive structure to, yeah, exactly, we're using the incentive structure to drive more and more demand for these carbon credits. So we, by reducing the supply, we drive up the price, which makes compensating your emissions actually more costly, which will drive polluters to actually remove, reduce their emissions, which is what we want to be seeing, right? And furthermore, there's like a, I think. An additional component that we haven't touched on, which is we're democratizing the access also to this asset class,

• 13:32Speaker 03

  which, you know, all the experts are quite agreeing upon that the price of carbon is definitely going to increase in the coming years. And what Klima does, it actually allows DeFi users to, you know, be part of that, right? Be part of that rising market and actually help drive the price up, right? Because it's like this, this positive reinforcement loop, which means that the more people bring carbon offsets to the Klima protocol, the more less there is supply on the market. So the intrinsic value of the treasury grows, which we are basically contributing to the price of it actually increasing. So I think this is, I think this is the most powerful component of it, actually.

• 14:17David Hoffman?

  So I do want to dive into more crypto stuff, but one, one more question on the basics incentives around these carbon credits, because that's like an area I'm super unfamiliar with. If the, since this is an opt-in voluntary like economy, if the cost of carbon goes up, won't that just disincentivize participation? And people will be like, okay, well, it was fun to help be a part of this economy and do good for the planet when it only costs us like a couple of basis points. But if the cost of carbon goes up and it actually starts to like, you know, materially impact the profitability of companies, won't they just like opt out and be like, well, that was fun. But like now, now we, we want to make sure we're profitable as possible. So like now that this is expensive, we don't want to do this anymore. Like what, what's stopping people from doing that?

• 15:01Speaker 01

  It's a great question. And I think to, to kind of illustrate why carbon offsets are still such a powerful tool and companies are really internalizing these costs, regardless of some of the things that are going on financially. Probably the best year ever for the voluntary carbon market happened during this, this COVID-induced economic downturn. So even though, you know, this is really hitting companies' bottom lines in many cases, there's just so much evidence. And I think companies realize like, we have to do something in the climate crisis. And offsets provide this really streamlined way to deliver finance to projects, which are going to have positive climate effects in the years to come, which is in everybody's best interest.

• 15:41David Hoffman?

  Yeah.

• 15:42Speaker 02

  Yeah, to add to that, like, you can opt out for sure, like, if it becomes too expensive for you. Um. But then you're gonna face like huge backlash, right? Because a lot of these companies that are opting in right now, they are basically signaling to everyone that they're doing something about what their footprint is. But, you know, they're only, if they're only doing it when it's profitable for them, then like, obviously, they're gonna get called out harshly for that. And that's not, you know, the route they wanna be perceived at. Like, you know, you, you will definitely, like, it'll then become a cost reduction exercise elsewhere, right? So like, if I know that offsets cost me $300 a ton, but it costs me $60 a ton to do, do something internally, like reduce my emissions from some sort of, you know,

• 16:25Speaker 02

  uh, power plant output or something, I'll do that instead, right? Like, you, you, then, then your commitment that you made, like saying that you're gonna be covered until about 2030 or 2040, or whatever you said publicly, you will then have to then look elsewhere to do, to do something interesting for.

• 16:43David Hoffman?

  Cool, guys. Okay, that, so like, basically, these, these commitments are like backed by social incentives, rather than like legally enforced requirements, is more backed by like social legitimacy, which, I mean, is a powerful force.

• 16:55Speaker 03

  Yeah. Absolutely. Yeah, I think I've heard somebody telling me that the voluntary carbon market is moving into a direction of being a pledge compliance market. So actually, all these companies who came out making public pledges now have to comply with their own, you know, their own announcements, basically. And I, I found this, yeah, I think this is really, for me, was really, yeah, this, this is what we have right now, right? Like, it's not, a- and the market has always been, you know, this, oh, yeah, well, you know, it's nice, we can, you know, offset our emissions, et cetera. But like, now we have a different era, basically. We're entering into an era where people understand that internalizing the cost of carbon is,

• 17:35Speaker 03

  it's just, like, it's just a natural way of doing things and like, just creating like a, an even playing ground and playing field for, uh, for doing internal accounting. So, um, I'm personally not very worried about companies opting out. Um, if they are, I think consumer pressure will, will do the rest.

• 17:53David Hoffman?

  Okay, great. Okay, guys, let's dive into the crypto side of things. So Olympus DAO is, and again, correct me if I'm wrong, I'm not super familiar with it, but it's an algorithmic stablecoin, semi-backed algorithmic stablecoin project, and you guys are just forking it to do your own thing. Is that right?

• 18:12Speaker 02

  Sort of. Like, we, so we're all original Ome's, so we're all, we've all been part of the Olympus community from the get-go. We really like the mechanics. It's a fully backed currency. So every Ome that exists, there's at least one die in the treasury, right? So you know that there's an intrinsic value fundamentally to your currency, which is a really fascinating concept. I mean, they introduced a whole new set of tools, like liquidity that's owned by your protocol, like all sorts of stuff. And like bond purchasing to actually, you know, purchase all that from users is fantastic. So we, we looked at that and we said, well, what if we applied this to carbon markets? Like something we know really well. We're like, okay, well, this makes a lot of sense of these types of incentive structures, like putting stuff into a treasury,

• 18:56Speaker 02

  you know, paying for liquidity outright and making sure that you have, like you basically develop a whole market on-chain with, with the actual community itself. We looked at Olympus, we're like, this could be it. So then we started experimenting, we started thinking about, okay, testing here and there. And then we approached them and said, can we, can we do it? Can we, can we use your, your contracts and do so? And from the get-go, it's been a collaborative effort with them. Like, we didn't want to just be seen as a fork who took their idea and kind of moved things on. We wanted to be seen as like an improvement, like we're, you know, we're kind of advancing the tech. Like, I myself contributed quite early to a lot of the tech that happened at Olympus, a lot of the design, design decisions that happened. And it's fantastic because it's, you know, we get to give back finally.

• 19:39Speaker 02

  So like, you know, we've, we've written a bunch of improvements and stuff like that. But we have their, not only their blessing, but like also their collaboration. We gave them a significant portion of early tokens in the form of P Klimas that they can exercise at a future time, basically saying like, look, in the future, we want to work together and we want to, want to make sure that we can build something really cool. We even explored the idea of like joint bonds, like Ome Klima bonds, where you have Die exposure for Klima users and then you have carbon exposure for om users, you know, stuff like that. Um, that's all stuff that we were, we're kind of, from the beginning, we said, no, let's, let's not just, you know, let's involve them because it's, it's, you know, their tech that we're leveraging and, you know, we're using a bunch of other people's tech as well. So

• 20:22Speaker 02

  it hundred percent has to be like a collaborative effort to make sure that we succeed. And, um, and, and yeah, and then that's how we've been approaching it from, from, from the start. So it's, it's really, it's, it's, um, like the whole mechanics of Olympus, that'll make a lot of sense, not just for Olympus themselves, but like as a fundamental innovation in DeFi, like.

• 20:40David Hoffman?

  Like as a primitive, like this would be copied and forwards for as needed?

• 20:44Speaker 02

  Yeah, like there, there's, there's like a lot of talk about what pool two is, right? They basically, that you have to constantly provide incentives in the form of liquidity mining, uh, tokens or whatever, just for people to maintain liquidity. And once the liquidity rewards run out, people move on to the next project, right? Which is exactly what we saw with DeFi farming, you know, last year or the year before, where people were just making obscene APYs, farming a liquidity and then leaving, right? And then, and pulling the whole thing out and then the project would die. In this case, it's the, you know, Olympus basically presented the, the solution that they will own the liquidity. So there's no risk of anyone ever leaving or pulling the liquidity out of their own protocol. That would make no sense, right?

• 21:24Speaker 02

  And this, to me, and many others, I've seen like people talk about it, has completely changed the relationship you have with DeFi projects. Because you now have this like assurance that the protocol is gonna stay, right? Like they, they became, they earn fees off the, off the trading, they or they own the liquidity, like there's a whole host of F benefits that come out of it that are really, really fascinating. And, you know, as a primitive, I'm sure it'll become adopted in, in some form or another by many, many protocols where they actually end up owning the liquidity of their own, of their own, of their own protocol, because you have to, like, it makes all the sense in the world, right? Like you want to ensure this, whereas like, you know, there was a, there was like this morning, actually, we were talking about Alchemix.

• 22:07Speaker 02

  They spend twenty million a month or something like that on liquidity incentives, which is nuts. Like that's, that's a huge cost that you can just reduce if you just own the liquidity. So anyway, like, long story short, like, we looked at this and said, like, this is fantastic. Let's apply it and modify it for carbon and all the stuff that we really understand. And, and, you know, we've been working ever since and we got the LBP coming up on Tuesday. We had the IDO, which was super successful over, over 575 K raised from users. They got a sweet NFT made by Sven. Oh, my goodness, like, I can't talk enough about how awesome that it was. There's so many people who were, were saying, wow, this is like the coolest F D ever. Um, so it's, it's, it's coming together and we're really, really excited for, for what this can do.

• 22:52David Hoffman?

  Hey, guys, in the second half of the show, we dive even deeper into the crypto side of things. We talk about the Klima Dow token as a currency. How can it have induced demand both from inside the Dow and outside the Dow? Uh, as well as just, uh, how can it be used as a social, uh, social signaling currency? Uh, we know people social signal with NFTs all the time. Can the Klima Dow token as a currency also be used as social signaling? Uh, that's, that's, I think is an interesting question since we all, since in the first half of the show, we talked about how, uh, the, there are these opt in climate markets, which are just done because of social incentives. Can we also leverage those same social incentives to get the Klima Dow token? More just like, you know, absorbed into the world, right?

• 23:37David Hoffman?

  Because demand for the Klima Dow token creates carbon sequestering down the line. Uh, I asked about the roadmap, um, what's necessary to bootstrap the, this whole entire ecosystem? Uh, and then also the long term, like, imagine a maximally successful version of Klima Dow. What does that look like for the Dow? What does that look like for the Dow token? What does that look like for the world? How does it help change the world for a better? So all of those conversations are coming in the second half of the show. But before we get there, a moment to talk about some of these fantastic sponsors that make the show possible.

• 24:08David Hoffman?

  Gemini is the world's most trusted cryptocurrency exchange. I've been a customer of Gemini since I first got into crypto in 2017, and it's been my main exchange of choice to make my crypto buys and sells. Gemini is available in all 50 states and in over 50 countries worldwide. And on Gemini, there are markets for over 30 various different crypto assets. Including many of the hot DeFi tokens, and it's one of the few exchanges that has liquid die markets. Gemini just launched their Earn program, where you can earn up to 7.4% interest on 26 various crypto assets. If you're tired of paying fees in DeFi, or you don't want to worry about DeFi exploits, but you still want to earn interest on your crypto assets, Gemini Earn is the product for you. Another product I'm stoked to get my hands on is the Gemini Crypto Back Credit Card,

• 24:53David Hoffman?

  which gives you 3% cash back on all of your purchases, but paid to you in your preferred crypto asset. When I get my Gemini credit card, I'm going to make sure that I get my cash back in ETH. So whenever I buy something, I get a little bit of ETH bonus back to me at the same time. You can open up a free account in under three minutes at gemini.com/go-bankless. And if you trade more than $100 within the first 30 days after signup, you'll be gifted a free $15 Bitcoin bonus. Check them out at gemini.com/go-bankless. The Aave Protocol is a decentralized liquidity protocol on Ethereum, which allows users to supply and borrow certain crypto assets. Aave version 2 has a ton of cool features that makes using the Aave Protocol even more powerful.

• 25:38David Hoffman?

  With Aave, you can leverage the full power of DeFi Money Legos, yield, and composability, all in one application. On Aave, there are a ton of assets that you can supply to the protocol in order to gain yield. And all of those same assets can also be borrowed from the protocol if you have supplied collateral. Here, you can see me borrowing 200 USDC against my portfolio of a number of different DeFi tokens in ETH. I'll choose a variable interest rate, because it's a lower rate than the stable interest rate option. But I could choose the stable interest rate option if I wanted to lock in that interest rate in permanently. V2 also features the ability for users to swap collateral without having to withdraw their assets, trade them on Uniswap, and then deposit them back into Aave.

• 26:22David Hoffman?

  With Aave, users can do this in one seamless transaction, saving you time and gas costs. Check out the power of Aave at ave.com. That's A-A-V-E dot com. Okay, so you guys have a very clear mission, and it sounds like you guys have the infrastructure to achieve those goals. But one of the things that needs to happen is you actually have to induce demand of the stablecoin. There's a stablecoin that results out of the Klima Dow fork of Olympus Dow, right? Right? Yeah?

• 26:56Speaker 03

  I mean, it all depends on the definition of stablecoin, right? I think you had this conversation on your podcast. At least I heard an episode about it. So it's not a pegged currency.

• 27:07David Hoffman?

  Okay.

• 27:08Speaker 03

  It's a backed currency, right? So we are creating, we're creating Klima, which is a token that is backed by carbon credits, but it's not pegged to any existing price because there is no global price for carbon, right? And this is part of the exercise here is to create something like a meta index that can serve as something like, you know, at least a signal for the price of carbon, even though we very much anticipate the price of Klima to trade at a premium of carbon, because there's obviously additional incentives and rewards attached to the Klima, to the Klima currency.

• 27:40David Hoffman?

  Wait, so are there, there are two tokens, right? One's the DAO token, one's the currency token?

• 27:45Speaker 03

  No, so there's the collateral, which is an index token called the base carbon ton, which essentially is a carbon index token that is denominated in one ton of carbon and which is essentially a token that is backed by a basket of different carbon offsets from different projects. And then this is essentially what replaces DAI, which goes into Olympus Treasury. We only accept base carbon tons. And then on that basis, we mint the Klima currency, which is really, really that, right? It's like a, it's currency token. It is also the governance token of the Klima DAO.

• 28:20David Hoffman?

  So it is like the DAO token as the DAO grows, this in theory would also grow in value?

• 28:25Speaker 03

  Exactly, but the whole point here, right, is to, the more base carbon ton tokens we have in the treasury, the more Klima can be minted. Because each Klima is by, you know, policy, always backed by at least one ton of carbon, so one BCT. And this means that if we have more BCT in treasury, the protocol actually mines additional Klima tokens. And it does so by rewarding people who stake Klima. So there's a possibility to stake your Klima, to kind of go long, you know, go long in civilization and, you know, not sell. And all the people that are staking receive the newly created Klima tokens. So the inflation goes to The people who huddle basically.

• 29:07David Hoffman?

  Right.

• 29:08Speaker 03

  So, and this obviously creates an additional incentive or like keep, you know, a reward for people, which what we see in Olympus means that the O M, which is the, you know, equivalent of Klima in Olympus trades at a premium, like substantial premium compared to the underlying, which in their cases die and in our cases, the base carbon ton.

• 29:31David Hoffman?

  So how, how would you characterize the pricing of the Klima Dow token? If it is the currency, like it's not going to appreciate in value in the same way like the uni Dow token or the S and X Dow token would because of its issuance, right? Like as more collateral gets added to the treasury, more Klima gets issued, which kind of, kind of is what like, you know, a typical fiat currency does, right? Like as there's more in the, you know, Federal Reserve, the central bank, they issue more currencies to stabilize that price. The details of that we can leave behind, but like, how is the Klima token? How would you describe its like equilibrium of how it's going to be priced?

• 30:16David Hoffman?

  Or, or is it more like emergent? Do we even know?

• 30:19Speaker 02

  It's kind of hard because like if you look at Olympus and how it trades, right? Like the same mechanics apply here, right? Like they have a fundamental, in theory Olympus should only be worth $1, right? Because each O M is worth one die and intrinsically, right? But then there's also risk pre value associated with how much like other assets they have in their treasury and basically other things that back this currency. And so it trades at a premium far above that, right? Like, you know, $200, $300 almost. And, and the same is true here, like Klima is in many ways, yes, it's backed by carbon tons and carbon tons present like an intrinsic value, but predicting kind of the longer term, what it'll trade at is difficult for a number of reasons, but also like, you know,

• 31:02Speaker 02

  how do you quantifiably measure carbon governance on chain as valuable, right? Like it's a. We will, that'll only emerge once we know like that what the market basically values that at and says like, okay, like, you know, this should trade at a 5X premium above the underlying collateral, or this should trade at a 10X or 100X, whatever. Like, that is fundamentally kind of how, but that, that's like, that's the, the premium value that's associated, like in Olympus, like, there's a premium associated with all these people managing this thing. You know, the, the contributor discord's like 200 people, like, it's ridiculous, like, they, they work together on all sorts of things to actually make sure the whole thing runs.

• 31:38Speaker 02

  And, uh, and, you know, this will be no different, like, we already have, like, you know, tons of people asking to, to just kind of move things together and, and really, um, we're gonna, so that premium is, is hard to quantify because like, you're essentially signing a price to, uh, you know, what is the Dow worth, like, as a community, right? And, and in, in Olympus, 100%, like, it's, the community is everything there, right? Like, it's 13,000 people now almost, and they are, it's, it's a fantastic community to be a part of. It's one of the coolest DeFi communities I've ever been in, and it's, that's awesome. And so we're, we're hoping to, you know, replicate something very, very similar in what we're doing.

• 32:16Speaker 03

  And maybe just to add, like, this is exactly the reason why we're doing a liquidity bootstrapping pool, because it, you know, it's basically the best way to create price discovery from the get-go. And we, we as a team, you know, we don't know, we don't know what the price should be, we'll find out next week. So, um, this is, um, this is as exciting for, for us as it's, uh, for everybody else.

• 32:38David Hoffman?

  Very cool, very cool. Yeah. So, okay. So like the answer to the question is, it'll be emergent. Like, we'll find out. Yay.

• 32:43Speaker 03

  Yeah, I think maybe, what, maybe one dimension to add, which is important, is that it's not actually about the price. So, the, the thing is, as you say, right, there's, there's, there's inflation happening, and the inflation obviously means that, um, it pushes the price down. But what happens is, um, given that the, um, people who stake actually get rebased, so there's a rebase that takes place every eight hours, which means that if you're staking, um, you actually get, you know, fresh Klima into, into your, into your wallet every eight hours, which means that, uh, first of all, you're auto-compounding your position.

• 33:21Speaker 03

  But you're also, you know, it doesn't matter at the end of the day if the price goes down because you're rewarded with the additional amount of currency in your wallet.

• 33:30David Hoffman?

  Okay.

• 33:31Speaker 03

  So it's kind of a volatility dampened scenario more than that it is like, you know, pegged or anything like that.

• 33:40David Hoffman?

  So how do you induce demand into the Klima token? Like if it is a currency, like the treasury of of Klima Dow, sequestering carbon credits from the voluntary markets, that will be easier if you can induce demand into the Klima token. Is there a plan to like induce demand somehow?

• 34:02Speaker 02

  Yeah, so that's exactly what like Sos was talking about is like the staking rewards are basically the long term APYs of, you know, four, four digit plus, basically like that's like the whole incentive in Olympus, right? Like it's to stake because by you staking and me staking, we're basically contributing to pulling liquidity off market and basically into this staking pool. And then, you know, further, you know, increasing demand while not having enough supply for the actual token. And Klima basically operates in exactly the same way. Like it's, it's entirely designed to, to do so. And once you have that, you basically, because you get stats, just like raw stats from Olympus, for instance, 85% of people are staking, 15% actually exists on the open market or

• 34:46Speaker 02

  in various pools for whatever people are doing.

• 34:50Speaker 02

  So it's actually not a whole lot to purchase, which means that, you know, the purchasing power every time someone does is, you know, is, is always increasing and pushing price up. And the same is true here, like, you know, we want to incentivize staking under the same rewards to basically make sure that you have this incentive to hold for as long as possible.

• 35:09David Hoffman?

  So, okay, so here, here's my concern with that. And this is like a, a model, almost all, I think every single crypto asset largely operates on the same, like. Every single crypto asset is a Ponzi game. Bitcoin started the Ponzi game. There's 21 million units because they're incented to hold because they're scarce. People hold them and then the price goes up because people hold, hoard them. And then at some point, people start to sell because it's a Ponzi game. Meaningfully different from a Ponzi scheme, which is that like somebody's actually getting a rug pull. No one rug pulls with Bitcoin. It's a Ponzi game that we're all playing. And like, one of the big criticisms that I've heard about algorithmic stablecoins,

• 35:50David Hoffman?

  of which I know like Olympus Dow is not, but and therefore a Kleenex Dow is also not. But like, one of the big criticisms of like algorithmic stablecoins is that there's like this, they are, they are a Ponzi game with like too short of a loop. Right? And so when I, when I ask like, how do you guys induce demand? There's internal demand, which is what you guys have just illustrated. But there's also external demand and that external demand in my mind is what like makes these things long-term sustainable. Because if you have value capture going to all these people who are staking and like by that, you are incentivizing people to buy off the secondary market in order to stake, in order to capture value. It turns it into a Ponzi game because the more people that participate,

• 36:34David Hoffman?

  like if you got in first and if you got in earlier than everyone else, it turns into a game of chicken as like, all right, like, are you going to sell? Are you going to sell? Who's going to sell first? And it turns into like, like, you know, the, the price can only go up so much before people start to like all collectively, you know, tap out, play chicken, and then they sell all their profits. And then it turns in, while it was like recursive, reflexive on the way up, it might be reflexive on the way down. Have you guys thought about this?

• 37:01Speaker 02

  Yeah, this is actually, so this is one of my favorite points to talk about the forever Ponzi game idea. Rightfully so, like, you know, exactly as you described, like, we're all just playing a Ponzi game and who's ever selling first is kind of on the way up. That being said. Things are a little bit different. Yeah, it may appear as a Ponzi on the outside in in the case of Olympus and Klima. Because yeah, stakers are getting perpetually rewarded for what, but what's underpinning the entire thing is bonds. So bonds in the form of basically, I come with a certain amount of currency. I pay for Klimas at a discount and in exchange, I get Klimas after a certain period of time or I get Om's after a certain period of time. So what ends up happening is you have this mechanic called one-one or basically I bond and and someone else bonds.

• 37:44Speaker 02

  And then staking is considered a three-three, um, basically the game theory mechanic that revolves around that. And and selling is considered a negative three action, right? So if we both sell negative three, negative three, like the, you know, the the protocol basically doing those as a result. And and there's no like, you know, positive um, income there like. Loop there. So what ends up happening is bonds, bonds basically. Take this whole thing away and that's and that's not where it's. So the stickers aren't just getting rewarded for the sake of staking, like they're not, these these rewards aren't getting generated out of thin air. They're getting generated out of bonds. And so bonds basically traded at a premium.

• 38:23Speaker 02

  Slightly below the market. And what that really is, it's the protocol paying users for particular things in in exchange for assets. So in the case of, you know, Olympus, they pay users for dye at a discount off the market. And say, we'll give you Om's, but you want, give us dye so we can put it in our treasury. And so like, let's say, Om is trading for three hundred dollars and they offer a 10% discount. That means that person can buy, you know, um, they can buy it for 270 bucks from the protocol and after five days they'll have the home. So what that really does is it gives the treasury 270 dollars to then issue 270 more Om. So they actually purchased dye at a discount from the user.

• 39:03Speaker 02

  And users basically, this is, and this is how the whole idea of intrinsic treasury value and risk-free value emerges as well. Is basically, um, over time, so intrinsic value is fundamentally the idea that one Om is worth one dye. In the case of Klima, it's one Klima is worth one base carbon ton. Over time, you then basically have this, the more people purchase bonds, you have this over-collateralization that kind of occurs. You have so many assets in the treasury that if everyone pulled out their own at the same time, they would get a certain amount of money based on, like basically a run on the bank, right? So if everyone decided, I'm gonna sell OMs for whatever, then you look at the risk-free value. And the risk-free value is how many assets exist in the treasury per OMs that exists in circulation.

• 39:46Speaker 02

  So in the case of, I think the last figure that I looked at was about $26, meaning that for every OMs that exists, there's 26 assets that back it. And this basically means that there is a floor fundamentally on what you're doing, and this just grows with time. Like you just look at the charts and you can see the same thing. So this is kind of what prevents it as a Ponzi, because a Ponzi implies that if everyone pulled their money out at the same time, somebody would be a loser and get nothing. In this case, everyone gets something, and it's, you know, slightly more than what it originally is. And the same is true here, like you will get something, and that something is you'll get a certain amount of carbon tons. And those carbon tons have value, you know, across the world in terms of other ecosystems. Lots of NFT artists are trying to do carbon offsetting.

• 40:31Speaker 02

  You have organizations that are working on, you know, carbon offsetting Bitcoin as a protocol. Like this whole host of things that are emerging on-chain.

• 40:40Speaker 02

  Very recently, like this year almost, like January was kind of like the Kickstarter for a lot of this. And it's just, it's growing with time. Like you have more and more people who are working on all sorts of things. So in the same instance, while it may appear as a Ponzi on the outside, what it really is, is you have to look at the risk-free value of the treasury. And once you understand that, then you say, okay, my, you know, my Klima trades at this much, I can get this many tons if something bad happens. And fundamentally, you're never, there is no chance of you ever being on the losing end of a Ponzi. Because on a Ponzi, like there's a very real chance that you end up with nothing, right? Like, and that's not the case in Olympus dot work, Klima.

• 41:20Speaker 03

  But I would agree with your point, like creating external demand for this is obviously like our long-term goal, right? And it's certainly increasing the resilience of the whole system, right? And we can see this like very much playing into like the other happy DIFR protocols that are all out there. And, you know, I can't wait to get a loan out of, you know, my Klima tokens at like AVE or whatever, or, you know, use it as collateral in MakerDAO, or, you know, you name it. So I think at the beginning, right, we, we, we're here to, you know, prove a point. We're here to establish a new currency that is backed by something that we actually care about, and it actually has real impact on, on our planet. And if we can turn this into a sustainable model, you know, we can adjust the staking

• 42:04Speaker 03

  rewards. And, you know, this has happened in, in Olympus DAO as well. So this is, this is a protocol that has very much the, you know, the control over their financial or like the monetary policy. And we can tweak it to, you know, be functioning on different levels, you know, and achieving different objectives and going more towards stability in, in long run, while maybe we want to incentivize as many carbon tons to be locked up in the protocol at the beginning. So getting, getting, you know, getting Klima in, into other protocols as quickly as possible. Yes, please, right? And that's what we hear. People learn about it. And this is how connections happen in, in crypto.

• 42:48David Hoffman?

  Is there a conversation to be had about these opt-in incentives? We, we talked about how there's this voluntary carbon market, which is news to me. So thank you for teaching me about that. And like, apparently, these incentives, social incentives are so strong that like, that actually commits these companies to like align with their own pledges and like forces them into economic actions, even though they're not legally bounded to these things. Is there some sort of conversation to be had about some sort of like opt-in social incentives to purchase the Klima DAO token? Like, maybe that's like another like social signaling things like, hey, like, look at my, look at my OpenSea. It's got all these cool NFTs. Oh, and then also that same wallet has a balance of like Klima tokens

• 43:32David Hoffman?

  because I'm a good Samaritan who wants to sequester carbon from the world. Is there a conversation to be have about, about that?

• 43:38Speaker 01

  If I could jump in real quick on this, just to point out one consideration. I think the social contract is a big part of the value of carbon, but there's other price pressures as well. And some of them are also regulatory. So just as an example, in the Colombian carbon tax system, essentially companies have to source offsets that come from domestic projects in Colombia. And a lot of these are actually coming from the voluntary carbon market. What that in effect has done is it's actually raised the price floor for different types of forest conservation projects that are coming from that region on the voluntary carbon market. Right. And so I think one of the beautiful things about Klima in terms of, you know, being in the DeFi space is that there's a price pressure

• 44:21Speaker 01

  to really, you know, raise the value of BCTs. That's not just coming from internal to the DeFi space. There's actually this external market where there's a confluence of factors that are working to actually raise the price floor of carbon. And I think that's, that's quite a unique thing that the Klima has to offer. And then in terms of, you know, really incentivizing usage in the space, you mentioned NFTs. I think the NFT artists have been absolutely massive over the last couple of months and really raising awareness about climate issues. And a lot of them are choosing to actually offset, you know, the footprints of their NFTs. You know, as calculated, there's, there's various groups that have looked at proof of work of Ethereum

• 45:01Speaker 01

  and they've broken it down, you know, thinking of groups like Carbon FYI, etc. CO2 can also did work in this space. And, you know, essentially they are just saying, okay, we're producing all these things, let's take care of the carbon footprint. And, you know, a lot of their audience really appreciates that as well. And so then this leads us to say, okay, where else can Klima be integrated? Right. I think there's huge potential that if we're talking about building this next generation financial infrastructure, let's do it from the beginning with the planet in mind. And, and that's really the opportunity here is that because we're building this token in the DeFi space that's backed by carbon, we can really easily integrate, you know, this, this, this carbon infrastructure.

• 45:44Speaker 01

  You know, the dream would be Aave or, you know, other platforms like this, but you can really, yeah, see where the potential is there.

• 45:50David Hoffman?

  Totally.

• 45:52Speaker 03

  But I like the idea of like having it as like a, you know, signaling, signaling kind of thing, right? I totally agree with you. I think, you know, public doctrines have have this strong power of actually, you know, I think, I think climate actions should be the status symbol of the 21st century. And this gives us all the tools to be to do that.

• 46:12David Hoffman?

  Very cool.

• 46:14David Hoffman?

  So guys, tell me about the roadmap. What's next?

• 46:19Speaker 02

  So short term, we've got, so we had an IDEO was a few weeks ago. Short term, we got the LBP coming up Tuesday. It's going to be a three day event, 14th to 17th.

• 46:28David Hoffman?

  IDEO initial.

• 46:30Speaker 02

  Discord offering. So basically everyone. Discord was people had a chance to purchase an NFT that gives them a claim to Krimas. They get airdropped to them later. And then they got a cool NFT out of it, but also they get tokens on early price. And this also in turn basically allows us to bootstrap the liquidity bootstrapping pool. So that requires.

• 46:49David Hoffman?

  Which was the LBP? The this is a balancer liquidity bootstrapping pool. Which listeners will remember that's how we sold our T-shirts once upon a time.

• 46:59Speaker 02

  Yeah, cool. Yeah. Same, same concept. You know, working with Alchemist and McNeet, copper launch team to make sure that that goes off smoothly. So that's the next short term thing. After that, like, once we have all that done and squared away, it's going to be launch of the protocol. So we've been live on testnet since like June. So people can already test it on Matic Mumbai if you want to. Just ping me, I'll send you some tokens. It's super easy. And then, so then we'll basically launch the entire protocol on Matic, like mainnet. So probably, this is how old I am. I remember it as Matic, not Polygon.

• 47:34David Hoffman?

  That has been a while, yeah.

• 47:36Speaker 02

  It's a habit that I cannot.

• 47:37David Hoffman?

  Hopefully you bought some Matic at the time.

• 47:39Speaker 02

  Yeah, yeah, I believe me, that was like the biggest regret. I bought enough that I was like, oh, like, I'll never have to like worry about deploying contracts ever again. I never really saw it as like a.

• 47:51David Hoffman?

  A financial asset.

• 47:51Speaker 02

  A financial asset. I'm like, oh, this is really cool. I could use it. So this is my, my engineer coming out, but.

• 47:59Speaker 02

  So yeah, so then Matic mainnet is coming out and then that's where everything's ready to go. And then we'll have, you know, staking will be live on day one, bonds will be live on day one. The whole protocol goes up and up and running at the same time. Whereas Olympus, they basically released the token first and then they released everything that they were working on. We have the benefit of basically being able to do all of that at once because it's already been built. And we're working on like a number of other things. So like CO2, for instance, is building a permissionless carbon bridge. That's almost ready. And that's like that'll be deployed as well. So people will be able to bring their tonnage from Vera on themselves or they can have someone do it for them. Like there's a whole bunch of, you know, routes there that we can help people move their stuff on chain and basically benefit from all the crazy stuff that's happening in DeFi.

• 48:42Speaker 02

  And that's, and that's like kind of the short term, like the next few months. Longer term, like we talked about this quite extensively, but compliance market. So we talked, at the very beginning, we talked about voluntary markets, like Vera, gold standard. This is what people opt into this incentive to, to do something great about the client. And this is where, you know, all the big companies, Microsoft, Google, Facebook, whoever, whoever you are, that you make a carbon pledge to and say like, we're going to be carbon neutral by whatever. You're operating in the voluntary market. There's a whole other side of the market, which is called compliance. And I'm going to totally butcher this. Dan uses this way better than I do, but fundamentally, that's like state level actors, right? Under the Paris agreement, they're basically a trading compliance certificates on, you know,

• 49:24Speaker 02

  Canada has to do this much emission reduction based on its allowance. And they trade with France or they trade with, you know, the States or, or somewhere else. And they, and this, this whole side of the market has a different categorization, different level of ruling and regulation. And, and to Dan's point, like by influencing the voluntary market, this also gives us an opportunity to influence the compliance market. But longer term, we also want to build, and we have a bunch of partners in the pipeline too for this as well. But we want to basically build the same types of DeFi bridge ecosystem tools for the compliance market. So people can then enter and participate in this much more distributed and fair market that emerges as a result.

• 50:05Speaker 02

  So if we prove the voluntary one, it's very easy for us to then just push into the compliance one, which is much bigger. And we can actually have a good significant impact on everybody's commitments to not just as a company or corporate, like, you know, social level, but also at like a regulatory level. Like if you sign the Paris agreement and you agreed to reduce your emissions by 20%. And suddenly the price of carbon is so expensive, you're gonna have to do something about it.

• 50:31Speaker 01

  Quick tidbit on that too.

• 50:33Speaker 02

  Go ahead.

• 50:34Speaker 01

  So I was just gonna say, you know, the the carbon market in the European system, it's a European emissions trading system. It's been one of the best performing commodities in the past year and the Australian carbon compliance market, it just reached an all time high. And I just point that out because, you know, the carbon market itself, that the voluntary carbon market could be worth, you know, 50 billion by 2030. And so, you know, this is why having exposure to this market and bringing that exposure to DeFi users is so exciting for us.

• 51:03David Hoffman?

  Right, yeah. So this is not just necessarily like a voluntary feel good for participating. This like actually has like raw economic upside exposure incentives as well.

• 51:13Speaker 01

  Absolutely.

• 51:14David Hoffman?

  Cool.

• 51:14Speaker 03

  Yeah, everybody, everybody who is in the space is right now buying up supply. And it's like, there's already, you know, we can all see already see like a supply crunch because people understand that, you know, buying now while the price is still cheap is a really smart move. And yeah, so I think this is, you know, this is really, and it's frustrating because it's quite a gated market. It's not easy to get to get access, especially it's not as an individual. So, you know, this is happening behind closed doors and like giving everybody the the possibility to participate and like, you know, hedging also with by having exposure on carbon. I think this is, I think this is something that hasn't been done yet in in crypto.

• 52:00David Hoffman?

  Guys, are you familiar with the the whole slaying Moloch meme that we talk about on Bankless every now and then?

• 52:09Speaker 02

  No.

• 52:09David Hoffman?

  Oh, oh, gosh, guys. Oh, man.

• 52:12Speaker 01

  Unfortunately, no, Felicity.

• 52:13David Hoffman?

  Yeah, okay, so so Moloch is the god of human coordination failure. And I mean, climate change is like one of the core examples of this, right? Like, everyone knows that we should stop like ruining the climate, but no one wants to actually do it themselves. They want everyone else to do it. And so it never happens, right? Like, there's all these coordination failures, like the the negative externalities of. Capitalism is a coordination failure. There's a bunch of coordination failures. And so Moloch is like this representative god that we've kind of memed into existence. It came from this Slate Star Codex blog called Meditations on Moloch. And like, it was something I talked about with Kevin Awaki all the time is that like crypto is brand new coordination infrastructure to help solve coordination failures, right?

• 52:57David Hoffman?

  So climate change, one of the biggest coordination failures, hopefully we can use these coordination tools that we have, which are DAOs are a very significant part of, like tokens as well. Ethereum is in smart contracts. These are all coordination tools. And so I think my final question for you guys is, since you guys don't know the Moloch meme, I'll leave the Moloch side out of it. But you guys should definitely go listen to the Slaying Moloch episode on Bankless.

• 53:21Speaker 02

  We will.

• 53:22David Hoffman?

  Like, give us, give us the maximally successful version of the future for Klima DAO. Like, five, 10, 20 years from now, Klima DAO is everything you guys envision it to be? What does it look like? What has it done? And how is the world different?

• 53:37Speaker 02

  Yeah, I'll go first. I'm sure everyone has their own view of it. But like, in my view, like, long term, it's basically carbon prices appreciated to such a point that it's a, it's like a luxury good. Like, if you're buying carbon offsets, you're paying for something that is truly a premium product. And otherwise, you're just completely incentivized to do better, right? Like, the whole coordination mechanism that you're talking about, like coordination failure, because there's like a cheap pop out, right? That opt out, you can just not have, you know, pollution problems, but just paying your way out of it, which is totally not fair for the people who actually are doing something like significantly valuable. So, long term, like, that's basically it. It's like, we've coordinated, we've solved this.

• 54:19Speaker 02

  And at this point, like, we've created a whole ecosystem that revolves around regenerative capitalism rather than exploitive capitalism, right? Like, building a whole currency on the premise that it's backed by regenerative actions. That's, that's like the future I want to see. It's going to be super cool.

• 54:35Speaker 03

  Yeah, and I just want to add to this, like, you know, if we really think this to the end, like, we have the choice of the currency we use. And if we get Klima to a point where it's, you know, operating as a stable currency that is really collateralized by the things that we care about, and we're starting with carbon, but you know, it's really just because it's a proxy for a lot of like ecosystem services, you know, biodiversity is something that we definitely want to see getting more attention also in the future. And this is something that Klima can also incorporate in the future. So having this money, which is essentially turned the social contract on its head and by, you know, just agreeing, the more utility the currency has, the higher its value, right? So if we get people to adopt Klima also as like a

• 55:21Speaker 03

  a currency and like if we, the more people decide to hold and huddle in Klima, this means that it's creating essentially the sink, the sinks for all these environmental assets. So yeah, this is probably dreamland and won't happen the next five years, but

• 55:40Speaker 03

  yeah, I think that would be, that would be incredibly exciting if we actually establish a new currency that is underpinned by different economics.

• 55:51Speaker 01

  One of the things that Oxlos brought up early on in our meetings together is that, you know, Clean Dow could really democratize access to climate finance for users. And I think that's something that everyone's really has an affinity for. And we realized the potential of that, which is super exciting. And I think Clean Dow itself is just a testament to the type of amazing collaboration that can happen in the DeFi space. We each were working at disparate groups. We had various backgrounds, you know, there was some overlap in carbon markets of DeFi. But we realized there's just a huge synergy potential by working together and producing this. And that's really what's happened. So, you know, long term, I would love to see Klima really catalyze finance and accelerate the price pressure on the carbon market, really make these companies have to reduce their emissions,

• 56:37Speaker 01

  you know, and just restore ecosystems around the world. There's so much potential, if you really think about it, of working together with crypto, you know, pooling capital together and then developing carbon projects. Absolutely. I think that's something that Clean Dow could be a part of in the future. And it's extremely exciting to think about.

• 56:55Speaker 03

  And just like one thing to add, right? We, we have an incredible community already in Discord with like, I think it's over 2,000 users now that are, you know, crypto users that are educating themselves about the climate change and like how we can tackle it. And I think we shouldn't underestimate the role of, you know, a group that is basically focused around like climate action and crypto and like educating ourselves and creating new tools and experimenting with new ways of, you know, driving finance to where it's needed. So, um, one last thing is, you know, come into the Discord and we have office hours twice a week. We've been doing this for like a couple of months now, so people come in.

• 57:38Speaker 03

  Every Tuesday and every Thursday, you can just hop into the Discord and there, and we're there, we answer questions, we, you know, um, and we educate ourselves about this topic. So I think there's a big gap there and if we can be a part of filling this gap, like this is something that,

• 57:54Speaker 03

  yeah, this is something that we, you know, is really important and is really core to this.

• 57:59David Hoffman?

  Well, guys, this is one, it's such a fantastic project. I'm so glad we got connected by, uh, by our mutual friend Chaz. So I just want to say that, uh, when I first got into crypto, it was problems like these that got me just like, you know, into this whole crypto thing. And like, uh, as we got into this whole crypto thing, like we kind of got a little bit distracted by like, you know, all these like DeFi tokens, financial assets and decentralized finance is important, right? You guys are a part of decentralized finance, but like it's some of these like grander problems that like nation states aren't necessarily big enough to solve themselves, that we need some sort of better global coordination infrastructure. And so like seeing projects like, like Klima Dow come out of this is like, oh yes, this is like,

• 58:42David Hoffman?

  let's return to like some of the original like, you know, Dreams that we had back in 2015, 16, 17 about like how crypto can can truly change the world. And Oxylus, you said like, uh, maybe like this isn't going to happen in five years. Maybe that's a dream, but, uh, I mean, in crypto, we dream, man.

• 59:01Speaker 02

  Yeah, please prove me wrong.

• 59:02David Hoffman?

  Yeah.

• 59:03Speaker 02

  No, I could.

• 59:05David Hoffman?

  Uh, uh, uh, Klima Dow, like it's tackling a problem that's bigger than nation states. And so, uh, the, the magnitude of what this could become, I hope, is also bigger than the nation state. So like Oxilo said, um, we'll have the, uh, the links to both the website and the Discord in the show notes. Obviously you guys want engaged community members, but is there any more like precise call to action about like who you want? Or what you guys need help with over at the Dow?

• 59:32Speaker 02

  Join the LBP on Tuesday. I'm super stoked to watch that and participate when you think is fair. Um, and then there's like a lot of people have been reaching out to us who aren't crypto natives, which is really cool to see. Um, that are like just climate natives and they're like, oh, like I'm working on this carbon project. It's, you know, certified under various standard, blah, blah, blah. Can I bring it to Klima Dow? And we're like, yeah, absolutely. You know, we're, and we're starting to, you know, coordinate all sorts of people who are, who have never really experienced DeFi in a profound way, but they understand climate really well. And they're like, okay, this is like something that I can finally, you know, tap into. So yeah, a hundred percent anyone, it's not just, you know, you know, crypto people. It's now client people too, that they really want to get involved.

• 1:00:12David Hoffman?

  Cool. Guys, any last comments or last words you want to add before we sign off here?

• 1:00:19Speaker 01

  I just want to say really appreciate the opportunity here and David, thanks for all you do for the crypto community.

• 1:00:24David Hoffman?

  Oh, hey, hey, thanks.

• 1:00:25Speaker 02

  Thank you. Yeah, cheers.

• 1:00:28David Hoffman?

  Cheers, guys. All right. Uh, all the listeners, you can find the links to the Discord and website in the show notes. And, uh, if you guys have any more questions about Klima Dow, go into the Discord because it sounds like that's where these guys are. Guys, thanks for joining me on this, uh, Meet the Nation.

• 1:00:41Speaker 02

  Thank you, thanks for having me.

• 1:00:42Speaker 01

  Thank you, take care.

• 1:00:44David Hoffman?

  Cheers. Hey, we hope you enjoyed the video. If you did, head over to Bankless HQ right now to develop your crypto investing skills and learn how to free yourself from banks and gain your financial independence. We recommend joining our daily newsletter, podcast, and community as a Bankless Premium subscriber to get the most out of your Bankless experience. You'll get access to our market analysis, our alpha leaks, and exclusive content, and even the Bankless token for airdrops, raffles, and unlocks. If you're interested in crypto, the Bankless community is where you want to be. Click the link in the description to become a Bankless Premium subscriber today. Also, don't forget to subscribe to the channel for in-depth interviews with industry leaders,

• 1:01:26David Hoffman?

  Ask Me Anythings, and weekly rollups where we summarize the week in crypto and other fantastic content. Thanks everyone for watching and being on the journey as we build out the Bankless Nation.