Stake to Support Mangrove Restoration
Liquidity Staking for CRISP Scored Mangroves
High-quality carbon projects face a major hurdle - while the resulting credits are viewed as desirable, the mechanisms they have access to limit their ability to scale. It can take up to 5 years to receive their first carbon credits for mangrove restoration projects, while most of their costs are up-front. This means significant timelines are involved in paying off the costs of developing the project - making them challenging to finance through traditional means.
Solid World's infrastructure enables great projects to forward sell their carbon credits ahead of time for working capital. By getting involved as a liquidity provider, you support a healthy forward market for Mangrove Restoration projects, allowing project developers to access working capital earlier and buyers to access quality supply at market rates. The CRISP-M token is what makes all of this possible.
Participating in Solid World liquidity pool staking is more than just joining a liquidity pool. It’s a commitment to support carbon projects and advance environmental sustainability.
Check out the details of our first CRISP-scored liquidity pool CRISP-M here:
Why this matters:
- Support for the fight against climate change: Staking in Solid World’s liquidity pool supports projects that combat climate change and contribute to a more sustainable planet. You enable highly impactful carbon projects to scale.
- Get rewarded for your contribution: Staking your liquidity opts you into rewards in a mix of USDC and CRISP-M tokens. These rewards accumulate automatically and can be claimed at any moment in time. You may also always unstake your liquidity and withdraw the principal as USDC and CRISP-M to stop participating.
When you stake CRISP-M LP tokens, you're essentially becoming a market matchmaker, helping buyers and sellers of the CRISP-M and USDC tokens meet. To do this, you give some of your CRISP-M and USDC tokens to a system called Gamma Protocol, which in return gives you LP Tokens. These tokens represent your role as a matchmaker and can be redeemed for a proportional share of the position.
In essence, the matchmaking for CRISP-M happens within a specific price range, initially set between $18.8 and $48 per CRISP-M. If the price hits $18.8, the matchmaking system will have only CRISP-M left, and no more sales of CRISP-M can be made. If it reaches $48, the system will have only USDC left, and no more purchases of CRISP-M can occur.
By providing this matchmaking service, or "liquidity," your LP tokens collect fees from the transactions they facilitate. These fees are automatically put back into the matchmaking system. Additionally, by staking your LP tokens, you earn extra rewards, receiving more CRISP-M tokens and USDC. Since sellers are carbon projects and financiers, and buyers are sustainability teams, brokers, and trading houses - you are providing a major service to the market by staking.
The dynamics of the CRISP-Scored Pool are underpinned by a robust token supply creation and destruction system, ensuring the maintenance of a fair and liquid market for mangrove restoration forward credits. Every CRISP-Scored Pool token is 1-1 backed by real-world assets with strong contracts and delivery guarantees. All the underlying agreements of the projects that create the supply can be found on the projects page.
- Supply Creation: The supply of CRISP-M increases when carbon projects sell their future supply of carbon credits into the pool. This process is inherently tied to the market price of the credits. Suppliers are incentivized to sell to the pool when the market price is overvalued, creating an equilibrium that reflects true market conditions. Every pool is curated and protected by the curation council, which has skin in the game. For the projects to be able to sell their future supply to the pool, they must pass the curation process. This means that projects, which might drive the price below the fair market price for the other projects, won't be able to access the pool.
- Supply Destruction: On the other hand, the supply of tokens decreases when buyers purchase forward carbon credits from the pool. Buyers can redeem every project from the pool for a premium and have the option to take the forward credits off-chain as standard legal contracts. This mechanism ensures that buyers will buy them up if there's a market demand for these credits, reducing the supply of tokens. Buyers are incentivized to purchase from the pool when the market price is undervalued, counterbalancing the supply creation process.
These two mechanisms, suppliers selling to the pool when the market price is overvalued and buyers buying from the pool when the market price is undervalued, enable Solid World to establish a truly fair and liquid market price for mangrove restoration forwards for the first time.
Participating in any DeFi protocol carries inherent risks, and Solid World is no exception. These include project delivery risk, potential price volatility, regulatory changes, and platform security vulnerabilities. However, Solid World prioritizes risk management and has implemented robust measures to minimize these threats and safeguard our community's funds. A key strategy includes ensuring that every token in our pools remains fully collateralized, underpinning our system's integrity. Furthermore, we are actively engaged in collaborations with leading insurance providers to insure the entire liquidity pool, thus adding another layer of security for our liquidity providers.
We have approached setting up this system with care and have instituted multiple risk-mitigation strategies to lower participation risks. Here are some of the major ways we are reducing risks.
- Independent verification standard with demonstrated demand - All projects included in our first pool are mangrove restoration projects seeking VERRA VCS Standard certification. Forward financing’s highest risk is a lack of demand for the resulting carbon credits once certified. This pool relies on an already established market with demonstrated demand from end-buyers.
- Delivery risk mitigation with the CRISP Framework - To mitigate the risk delivery shortfalls, all incoming supply is subject to public analysis based on Solid World’s CRISP Framework. This sets caps on how much supply is allowed to be forward sold via Solid World.
- Legal contracts with replacement guarantees - Solid World provides underlying legal contracts for all of the supply available on the platform. These include contingencies in shortfalls and moving the shortfall risks to suppliers instead of buyers. All of the contracts are publicly accessible on each project's page.
- Curation Council for Consensus-based Curation - There is always a risk of a “race to the bottom” if sub-par projects can access liquidity. The top 7 Liquidity Providers, including many project developers, can veto any new project from entering.
- Security audits for our smart contracts - All of Solid World’s production smart contracts, which non-custodially handle key functions of the system, have been audited repeatedly by Dedaub, a well-respected blockchain security auditor. Our smart contracts and audits are publicly available and accessible on our GitHub for review.
- Battle-tested third-party market mechanisms - Solid World is not an exchange and does not provide custody. All tokens and transactions are managed by on-chain mechanisms, which Solid World has limited control over. Especially when it comes to any trading mechanisms which facilitate market activity - we rely on battle-tested independent protocols which we don’t control. Liquidity is handled via Gamma Protocol on Uniswap V3.
Here are the five necessary steps for participating in Solid World liquidity pool staking, along with why these steps are critical to ensuring smooth operation and sustainable impact.
The first step is to connect a wallet. This secured connection establishes a user identity that allows you to interact with the Solid World platform and related smart contracts. Doing this ensures the safe handling and storage of your assets - wallets allow you to have self-custody over digital assets instead of relying on third parties. You have to explicitly opt-in to anything happening with your digital assets.
CRISP-M tokens form the basis for transactions within the Solid World ecosystem. They can be used to purchase specific projects' forward carbon credits from the pools, participate as an LP by putting them into Gamma Liquidity Pool, or be used in numerous DeFi applications.
The Gamma Liquidity Pool is built on Uniswap V3, a non-custodial protocol known for its active liquidity management and market-making strategies. By participating in the Gamma liquidity pool, you'll become a liquidity provider and earn trading fees in USDC and CRISP-scored pool tokens from the protocol. Solid World maintains the power to update the trading ranges based on market activity if
The final step is to stake your LP tokens. Staking allows you to opt into ecosystem incentives. Staking is done non-custodially, meaning no third party gains additional control over your tokens. Solid World redistributes a significant portion of the platform's fees as rewards to the stakers. The rewards come from two sources: forward carbon credits through time appreciation and USDC through direct incentives by Solid World.
By participating in Solid World’s liquidity pool, you're joining a mission to make a difference in the fight against climate change - supporting projects that are making a real impact on our planet. Together, we can drive forward climate action.