FAQ

What problem is Solid World DAO solving?

The forward carbon markets don't function as they should. Carbon projects face major obstacles in financing operational expansions. Buyers are disincentivized to participate due to the illiquidity of forward agreements compounded by long delivery timelines. The certification and approval process for new credits can take years.
When carbon projects need to wait many years to sell the credits that they’ve earned, they can be tied-down with debt or unable to continue with their sustainability efforts because of market price dynamics. This makes the prospect of generating carbon credits very unappealing for new entrants. The incentives in the current carbon economy are not set up for success.
Solid World DAO aims to reimagine this market structure and realign incentives so it is more attractive to start carbon projects. We need the carbon economy to grow in both scale and quality.
Solid World DAO is building the infrastructure that will help scale the carbon market into a planetary powerhouse. Our mission is to build core infrastructure to make forward carbon markets as liquid as possible - unlocking the value of forward deals for carbon projects and the institutions that buy them.
There are many other problems that will need to be solved in the carbon economy as these markets mature. Solid World DAO hopes to be a part of as many of these solutions as we possibly can.

What is a carbon credit?

A carbon credit is a unit of value that represents one metric ton of CO2 reduction. These credits are generated by organizations that are taking some type of action to reduce carbon emissions in the atmosphere. Sometimes these credits are generated when existing businesses become more sustainable and other times they are generated when new projects or efforts take proactive measures to plant trees or develop carbon capture technology.
There are markets where these credits are sold by participants hoping to earn a financial return for their sustainable efforts, and purchased by those who want to offset their own carbon footprint.
ESG is also now a driving force behind carbon markets. ESG stands for "Environmental, Social, and Governance". It’s a term that is used to rate and describe the impact that a business has on the world, specifically in the three areas mentioned. Companies will often buy credits on voluntary carbon markets to offset their carbon footprint and improve their ESG rating.

Are carbon credits greenwashing?

Voluntary carbon offsetting markets are a great way to encourage positive change, but it is true that in their current form they can also be manipulated so companies can greenwash their environmental impact with low-quality credits that have questionable additionality. Meaning that it is unclear whether or not the source of the credits will actually be creating a reduction in carbon emissions.
These markets have become infamous for widespread corruption because many companies have been able to manipulate the system to greenwash their environmental impact by purchasing a large number of low-quality credits that have no guarantee of funding carbon reduction. If these markets were decentralized, open, and transparent, this type of corruption would not be able to persist, and participants in carbon markets could be confident that their trades are actually making the world a better place.

Why are you dealing in credits that are not certified yet?

As with most things in the world, funding is one of the biggest limitations preventing carbon projects from scaling. Starting carbon projects can be very expensive and there are often large upfront costs in order to do the activities that will lead to credits. As a result of these up-front costs, many companies that have the ability to sequester carbon are discouraged from changing their practices or starting carbon projects, even if it would be in their best interest to do so in the long run.
Forward selling carbon credits allow carbon projects to access the liquidity they need to scale.
Even though the credits are not certified yet, the organizations that generate these credits are contractually obligated to follow through on their promises of achieving certification. If the carbon project fails to deliver these credits, it must contractually cover the shortfall. If the carbon project fails to pay back the financing due for any reason, most likely, the DAO has set up a contingency for the project. As the last line of defense Solid World DAO would cover the payback from the treasury.

How do you ensure that pre-funded projects will follow through and deliver the required credits?

If a project fails to deliver the credits, they are contractually obligated to purchase equivalent credits on the market to keep up its end of the agreement. Solid World DAO has a community of experts who vet projects in advance to determine potential risks. The project is obligated to provide solutions to these risks in order to be tokenized.
Solid World carefully screens projects and only offers forward contracts to trustworthy project proponents. We use conservative credit generation forecasts, which means that projects should always produce more credits than we forecast. The DAO is willing to tokenize only up to 50% of the projected credits in order to control systemic delivery faults.

What types of carbon credits will Solid World DAO focus on?

There are many different types of carbon credits, and even within these categories, credits can often vary in quality, which is why it is so important to build markets that can value every carbon project on an individual level. The following are a few of the most important categories of credits that Solid World DAO will be looking at:
Agriculture - Agricultural carbon credits are awarded to farmers that improve their sustainability practices and work to improve their soil. Some of these measures include reductions in plowing or chemical use, but also extend to planting trees and additional crops.
Blue carbon - 83% of the global carbon cycle is circulated through the ocean, so the health of coastal and marine ecosystems is incredibly important. “Blue Carbon” is focused on improving carbon conditions in marine ecosystems
Reforestation/Afforestation - Reforestation projects earn carbon credits for every ton of CO2 that they capture from the atmosphere in tree biomass in regrown ecosystems.
Carbon Capture - Carbon Capture projects use innovative technologies to remove carbon from the atmosphere.

Are you sure this will work? How much will the protocol be worth?

We cannot predict the future or make any promises about how the market will react to the protocol, but we believe in this technology and the power of the community, and we believe that this is an important mission. This is a young protocol and we don't know where this will all end up. We hope we can turn the world economy upside down and create a platform that reimagines the entire carbon economy.

When are you launching? When will your token be available?

Our platform and token are expected to launch at some time in early 2023, with a likely launch on test-net in January of 2023. You can stay up to date with all of the details on the development with the team directly on our Discord server.
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What problem is Solid World DAO solving?
What is a carbon credit?
Are carbon credits greenwashing?
Why are you dealing in credits that are not certified yet?
How do you ensure that pre-funded projects will follow through and deliver the required credits?
What types of carbon credits will Solid World DAO focus on?
Are you sure this will work? How much will the protocol be worth?
When are you launching? When will your token be available?