Tracer is developing an open-source, decentralized carbon credit marketplace infrastructure to address the pressing issue of climate change. Our goal is to create a trusted and liquid economy for carbon dioxide removal (CDR). Data shows that even if global emissions were to stop today, the 2.2 teratons of CO2 already in the atmosphere would continue to drive climate change. By using blockchain technology, we aim to accelerate the development of the carbon removal economy and, in turn, help save the planet.
How Does Tracer Work?
Our ecosystem is built on two primary smart contracts:
- Tracer (TRCR): This is the governance token for the ecosystem. Holders of the Tracer token vote to grant licenses to registries and carbon-certification bodies. They oversee the health of the Carrot economy and can revoke licenses. They also vote on crucial protocol decisions, such as smart contract upgrades and managing the Tracer DAO (Decentralized Autonomous Organization) treasury.
- Carrot (CRRT): This is the Carbon Removal Token, an ERC1155 token used for trading carbon removal credits. Each Carrot token represents a ton of CO2 removed from the atmosphere and stored for a specific duration (from a century to millions of years).
The two-token structure is central to our project’s approach to scalability and governance. We focus exclusively on carbon removal credits, not reduction or avoidance credits.
What Makes a Carrot Credit Unique?
Carrot tokens are designed to provide transparency and traceability, which are currently lacking in the carbon credit industry. Every Carrot token within its ID, links to a specific project. Each project, on-chain is a NFT that contains:
- A name
- The certification body that endorsed it
- The grade (persistence) of the carbon removal
- A link to metadata on IPFS such as:
- Source: How the carbon was removed and stored (e.g., biological, chemical or technological methods).
- Region: The geographical location where the removal occurred.
- Date: When the removal took place.
- MRV data from the company that Measures, Reported and Verified the project and the removal.
From minting to retirement, this system prevents double counting and provides full traceability all the while supporting portfolios of Carrots from multiple projects. Carrot tokens are graded based on the persistence of the carbon sequestration, meaning how long the CO2 remains stored. This science-backed metric allows for objective comparison and trading of credits. While each token is immutably linked to a specific project, tokens with the same grade are fungible, creating a liquid market that supports price discovery and efficient trading.
What is the “Buy and Burn” Model?
Our ecosystem incorporates a deflationary mechanism to benefit Tracer token holders. When carbon removal credits are minted using the Carrot smart contract, 1% is automatically sold. The proceeds are used to buy and then burn Tracer tokens. This continuous buying and burning of tokens creates deflationary pressure, which can potentially increase the value of the remaining Tracer tokens over time. This process links the value of the Tracer token to the success of the Carrot ecosystem. Tracer token holders have a financial incentive to govern the Carrot ecosystem towards maximum value.
How Do We Plan to Scale and Build Trust?
We recognize the carbon credit market is growing rapidly, with some estimates placing it at $100 billion by 2030. Our strategy to scale and build trust includes several key components:
- Decentralized Governance: The Tracer DAO, managed by TRCR token holders, provides an oversight mechanism for the ecosystem. The DAO is responsible for granting and revoking Endorser NFTs to and from trusted certification authorities, which helps protect buyers from low-quality or fraudulent credits.
- Supporting the “Long Tail” of Suppliers: We plan to focus on supporting smaller, emerging carbon removal project developers by providing access to financial instruments like Carrot token futures (which we call the “Seeds” project). This allows them to secure funding by selling credits before they are delivered, giving them the capital needed to scale operations.
- B2B2C Approach: We will partner with companies that have a large customer base and a significant carbon footprint, like webshops, to offer Carrot tokens at checkout. This approach aims to create a new revenue stream for our partners and an easy way for consumers to offset their emissions.
- Security and Compliance: We are using a secure development platform like Arbitrum and are committed to implementing robust governance and market-based incentives. We also plan to implement rigorous KYC/AML procedures and engage with regulatory authorities to ensure compliance. The carbon credits on our platform come from the same verified suppliers used by NASDAQ-listed companies like Microsoft and Google.
How Can I Get Involved?
Our dream is to create a unified, decentralized marketplace for carbon credit trading that can be used by everyone, from companies to governments. The Tracer token is a way to participate in this vision by providing a vote on the project’s direction. We believe that by building this ecosystem together, we can all contribute to a solution for climate change and benefit in the long term.
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