FtC x EC Hackathon | Workshop: Carbon Credits, Simply Explained (Oct 2024)

Your Mark is whenever you're ready great thanks Teresa hi everybody greated to be here as part of the funding the commons Earth Commons hackathon 2024 I'm going to be sharing a little bit about ecological benefit assets today in particular focusing on carbon markets uh but I'll preface by saying that a lot of the concepts I'm explaining here do apply to other ecological assets so if you're developing biodiversity credits or PL sck removal credits A lot of the same Concepts and Frameworks that I'm going to run through will apply there as well so I'm here in Florida right now where we just had two severe hurricanes back toback and I think it's pretty clear to everyone with the flooding in Thailand uh with an ever increasing number and frequency of natural disasters occurring all around the world that uh you the effects of climate change are here already and Earth climate is destabilizing rapidly as we continue to force uh more carbon in the ATM osphere their emissions and other activities that are pushing our planet out of the stable equilibrium that we've come to know and love as humans um so before I get into it I'm just going to give a brief overview of the agenda here I'm going to spend about 15 minutes talking about carbon markets and how they work then I'll run through a few examples one from Defi and one from an nft project uh these are going to be pretty technical I'll go through the code as well as how the applications themselves work and then I've left about 10 or 15 minutes for John to go through how astral protocol works and um talk about location based proofs and I've also left a little time at the end for Q&A so as I was describing we all rely on a stable climate for all of human history the Earth's temperature has been in a fairly narrow range and we haven't had NE Global catastrophic climate events like an ice age or a major volcanic eruption that has caused uh extreme instability in the climate now with the forcing function of greenhouse gas emissions uh deforestation and other negative environment Al impacts we are as a species destabilizing the climate of the planet that we call home and this is creating problems all over the world uh but in particular um there's a useful analogy for how to think about this issue specifically around greenhouse gases and carbon dioxide emissions that systems uh thinking model is uh pretty well understood widespread is the bathtub model and the basic idea is that our atmosphere is a bathtub we have been filling it up with carbon dioxide in the form of greenhouse gas emissions and there are also mechanisms that remove water from that bathtub both natural and artificial but the real thing causing the uh the real thing causing global warming leading to the increased severe weather events uh the higher average temperatures is the CO2 in the bathtub so there's really two different ways you can think about attacking this problem we need to both reduce the rate at which we are filling up the bathtub I you turn off the to of emissions but we also need to bail out water from the bathtub if if we're going to stabilize through climate for context on the amounts here we are emitting about 40 billion tons of carbon dioxide every year and the bathtub contains about two trillion tons of carbon dioxide in excess of what was there before the Industrial Revolution so we're emitting a few percent every year we're filling the bathtub by a few percent every year uh and we're not really bailing out the bathtub much at all right now um there are some natural sinks that are removing carbon dioxide at about the same rate they always have been things like the ocean absorbing CO2 in the form of carbonic acid rocks weathering that absorb CO2 from the atmosphere as well but those effects are pretty small compared to the rate at which we are adding CO2 to the bathtub so we need to both turn off the tap and we need to start bailing out CO2 from the uh from the proverbial bathtub in the context of carbon markets we talk about these two different activities as reducing emissions or removing emissions so reduction is some activity that will stop emissions from going into the bathtub in the first place for instance switching from a Coal Fired power plant to renewable energy or switching from a gas powered car to an electric car on the other hand removing emissions is some activity that's going to take CO2 that's already up in the atmosphere and put it somewhere where it's stored for a long time so for instance if you plant a bunch of trees make sure they grow up to be a strong healthy Forest you you're now storing carbon in the wood of those trees uh similarly if you create a a factory that you know sucks CO2 out of the air and puts it underground in a storage location that's also going to be removing emissions from the atmosphere where they won't be able to have the impact of capturing heat from the Sun and and warming the planet so these are sort of the two key types of activities in the context of the bathtub metaphor you know a reduction is going to be turning off the tap a removal is going to be bailing water out of the tub and there are two different mechanisms for incentivizing these kinds of activities on one hand you have a government mandated system also known as a compliance system where the government says for instance we will not allow companies in our jurisdiction to pollute more than x tons to emit more than x tons of carbon per year and if they do put out more than x tons of carbon prer we're going to put a very harsh uh fine on them and make them pay uh the government for that violation on the other hand there is a voluntary Market I also like to call it a verified Market because rather than the government mandating that a particular activity cannot take place and if it does they fine you in a voluntary system individual actors are going and positive actions like planting trees or switching to renewable energy and on the other side individual actors are paying those project developers those producers for the activity that they're carrying out I'm going to focus on the voluntary Market uh the reality is that these two systems are actually kind of intertwined and some compliance Market systems are now integrating credits from the voluntary system but that's a bit out of scope it goes beyond the sort of simple introduction that we're here to discuss today uh but if you have questions about compliance markets feel free to reach out to me on telegram or Discord so in the context of the voluntary system um what we're trying to do is basically pay people to go out and turn off the tap or pay people to go bail water out of the tub uh those people that are going to go do the work are called project developers and they're you know running companies all over the world that go and take some positive action this is a bit of a overview of how the carbon Market is structured and the different players that are acting it's quite simplified there are other players involved but these are the key types of actors and their relationships so I just mentioned the project developers they're really the stars of the show here because they're the people who are going to go out in the real world you know put shovels in the ground and actually do stuff to have a positive impact now they may be implementing different activities and I'll go into that more later uh but the point is they're going to go do something and then the other players are there to support the activities that the project developer are are carrying out so most importantly the buyer is the one who's going to be financing this activity right because going and planting trees or installing solar panels that all cost money and the money's got to come from somewhere and in the context of a voluntary Market we talk about buyers or also known as retires these are the people who are going to be consuming the underlying credit and supporting the project developer with cash with money on the other hand you have the vvps and the registry and these play an important role of checking that the project developer is actually doing what they said they were going to do and that it's being carried out according to the appropriate scientific methodology so on one hand we have a carbon credit registry uh these are organizations like Vera gold standard pero Earth and their job is to publish standards for what a good carbon credit looks like as well as have a system of record where those credits are recorded the projects are uh information is stored and when a credit is actually issued all the transactions are going to be taking place in the carbon credit Registries underlying uh Ledger in their underlying transaction laog on the other hand we have vvds validation and verification bodies and their job is literally to go and check did the project developer do what they said they were going to do and did they follow the standards set out by the Registries so in the traditional carbon Market these vvvs are literally sending people out into the field with clipboards and tape measures you know to look with their eyeballs and check like did the project developer actually plant the trees are these solar panels actually installed and hooked up to the grid and then they will publish a report back to the registry which includes information about what they saw when they vised the project maybe some photographs uh basically attesting to the legitimacy of the project developers activities so that's a bit about the structure of the market uh and the key players uh and I want to just emphasize that these players are typically independent from each other so the vvb is a third party usually a consulting firm project developers are usually companies that are locally based in the jurisdiction where they are operating or they work with an on the ground implementation partner in the jurisdiction where the project is being implemented and the carbon credit Registries are typically NOS or nonprofits uh that basically function as standard Setters uh and they don't themselves go out and develop projects directly so I want to talk a little bit about methodologies and the different types of methodologies and how they relate to each other so some of the most common ones that you'll encounter are things like planting trees also known as aforestation that's where you take an area that either is not currently forested or was previously forested but it was cut down and you replant those trees this is a type of removal activity uh and it is uh one of the most popular and widely deployed methodologies it's not necessarily the quickest uh these have quite long turnaround times because trees take a long time to grow and there's sort of trade-offs in each of these methodologies between the speed the profitability the effectiveness uh and there are various attributes along which each methodology can be assessed another methodology that you've probably heard about is renewable energy installation I've already mentioned that uh and this is where you go and install a solar panel or install a wind farm and you are calculating the credits that are issued for these uh for these methodologies based on the avoided REM avoided emissions that would have taken place if the grid did not have these additional renewable energy resources so these are typically implemented in jurisdictions that have a large Reliance on fossil fuel energy so for instance developing countries like India turkey China have been some of the most widely deployed uh locations for renewable energy based carbon projects and finally we have industrial uh projects of various forms so on one hand you could improve an industrial process by you know that reduces emissions for instance by destroying a very toxic uh or highly potent greenhouse gas before it's emitted or improving industrial process so that it consumes less heat or a factory that actually removes carbon uh so for instance you've probably heard about direct air capture where you literally build a big Factory with fans on top they suck in a bunch of air separate out the CO2 using some chemical or mechan IAL process and then store that CO2 underground and each of these activities has a scientific document associated with it a methodology kind of like if you were in a science class in you know grade school they would give you a methodology with like five steps where you're going to you know carry out an experiment similarly a carbon credit methodology is basically a step-by-step guide for how you carry out a particular activity and most importantly which variables you're going to need to measure in order to confirm that your activity actually had the intended effect whether that you know the size of the trees that you planted or the amount of CO2 being measured by your flow meters as you're you know capturing it out of the air in a direct air capture plant uh the methodology lays out the steps to take and the variables to measure to confirm that those steps were actually implemented correctly so stepping back from the mechanism I just laid out this whole system was developed in the 1990s under the Kyoto Protocol so the first ever carbon markets were something called the clean development mechanism developed directly by the and administered by the un uh but there were some issues that emerged with that initial implementation and we're currently living in a sort of carbon markets 2.0 world the current generation of Registries that I mentioned Vera gold standard Etc um they came up in the late 2000s early 2010s and the tech stack really hasn't evolved much since that time so we're talking phone calls emails back and forth wire transfers to send money PDF documents as the authoritative records for these activities uh and there's a big opportunity here to improve the scale of this Market by addressing the tech stack by basically upgrading some of the technology being used for various aspects of this Market because the reality is that this Market is quite small I mentioned the 40 billion tons per year number and the two trillion tons uh total emissions since the Industrial Revolution there's only been about two billion tons of carbon credits created using this mechanism since it was created in the 1990s so we're really talking about a few percent of ual emissions over the past 30 years and if this Market is going to have a meaningful impact on the climate crisis and help us stabilize the climate it has to grow a lot like 100 to a THX over the next couple of decades and in my opinion the current Tech stack is not going to scale to address that uh yeah is not going to scale to that level so we need to do some upgrades and uh on one hand there's a lot of manual processes going on here and a lot of opaque operations that's not only slow and inefficient it also opens up opportunities for Fraud and Abuse but there's some modor tech that's been developed in the last 10 years or so that I think can solve most of these problems in particular I'm going to talk about two different aspects of this issue I'm going to talk about some supply side issues around the way projects are implemented and verified as well as some demand side issues around how the credits are traded and consumed so basically my point here so far is that this concept is sound we need to both slow the rate of emissions and bail water out from the tub and this mechanism of carbon markets provides a way to fund people going out and taking those actions but the implementation as it currently exists is flawed and imperfect and it can be improved by applying some new technologies so on the supply side meaning project developers are going out and doing something and they need to do that in an effective way and monitor what they're doing uh in as you know high integrity and uh also high efficiency ways they can to reduce their costs associated with verification so there's a move now from the traditional mrv or monitoring reporting and verification process that I described before where you know a consultant flies in they have a clipboard they go around with their eyeballs and they look at stuff and they write down on their you know clipboard what they see and then they send a PDF report that's the traditional mrv process dmrv or digital mrv promises to address some of these integrity and efficiency concerns by leveraging monor technology think instead of sending someone out with a clipboard and a tape measure to you know measure the amount of trees that have been planted and how big they are you use satellite data to assess the amount of biomass in a particular area uh on the other hand you might use uh in a uh in a factory context you might have gauges like physical you know gauges that you like look at with your eyeballs instead of having a you know a consultant come out and look with their eyes and write down what they see on a piece of paper you could have an iot device on that gauge that publishes a cryptographically secure record of the measurement that it took onto a public blockchain and then that that becomes the system of record that you can then use in your mrv calculations to determine you know how much CO2 was captured by this DAC plant uh on the other hand you also have soil projects so uh where you're trying to change the way that an agricultural process is carried out for instance to capture more carbon in the soil and currently those soil measurements are quite expensive to take because you literally need to go send someone out dig a little hole in the ground and then send that soil sample off to a lab somewhere remote where they're going to carry out you know some manual tests on that soil sample but there are people developing iot devices that can be embedded directly in the soil that can assess many of those soil parameters without having to physically remove a sample and send it off to a lab somewhere so in my view dmrv can address many of the Integrity concerns while also enabling project developers to carry out smaller and more cost-effective projects because you don't have to fly someone out from the Western World to come and look with their eyes or take physical measurements in the same way you may still need some ground truing um there's some you know back and forth in the community about to what extent you can can rely on uh you know purely remote sensing for assessing these projects but I think that you can move from a world where 100% of the verification is done manually by someone you know physically visiting the site to a world where maybe 90% of this verification is done through remote sensing and then you periodically send people out to do spot checks um or have some other mechanism for ground truthing the methodology and making sure that the remote sensing measurements are accurate so that's the supply side um and frankly I personally do not spend much time working on the supply side issues uh they're pretty hard Science deep in the weeds issues um I'm more focused on solving some of the demand side issues in the organizations that I work with um and there's really a big unlock that addresses in my view most of the problems on the demand side and that is tokenization and more generally web-based Technologies so the way that these credits are typically traded right now is very opaque and very cost intensive so if you want to get your hands on say a direct air capture credit from clim Works you're going to be calling somebody on the phone sending an email back and forth with them and by the way if you want to buy less than like $10,000 worth of this stuff they're probably going to hang up on you because in their view the amount of time that it takes to fulfill this order to send the wire transfer is simply not worth it if they're only going to be you know doing a transaction of $100 in fact sometimes the transaction costs themselves can be as high as $100 so if you wanted to say offset a flight that you took to Thailand to go to Devcon um there's not a lot of Brokers that want to talk to you about that because your total cost is going to be somewhere in the range of like10 to $100 and it's just not worth their time if they have to take a call send an email do a wire transfer email a PDF so tokenization can solve many of these problems by simply taking the credits from these opaque web2 systems where they're you know require permissioned access in order to uh to use and put them into a more open public interoperable ecosystem that is a public blockchain so there's really three aspects of the demand side that can be improved uh through tokenization one is improving access as I already mentioned another area is improving automation so rather than having to go and click a button when you want to retire uh carbon credit uh you can build an automated API that every time you know a widget is manufactured or a flight is booked um a small amount of carbon credits are retired and we can also get money more directly into the hands of project devel velers so rather than the project developer having to sell their credits off to a broker who then sits on the phone all day taking orders the project developer could directly list their credits for sale on a Marketplace and uh you know capture nearly 100% of that uh transaction for themselves so there's work to do there's a lot of stuff to build there's a lot of problems to solve and I'm going to walk through for the rest of this session a couple examples of how uh people are solving some of these problems so this is a similar slide to what I just showed in terms of of the structure of the carbon Market um and I've added a few logos here to indicate how some of the uh sponsors involved in the hackathon are playing uh so on one hand um I've been talking about the demand side just now right so cadow on the right hand side we're really trying to solve the process of getting money from a project um financer from someone who wants to buy the credits uh to the project developers more directly by creating a liquid spot market for carbon credits and we also do some project financing ourselves where we directly fund a project and take the credits um for Sal on our Market we work closely with tokenizers like toucan protocol who work with the Registries to create a tokenized representation of the offchain asset so that then we can plug into all these interoperable Legos like you know amms and other D5 Primitives and then we have organizations like Astro protocol that are working closer to the supply side where they're you know Building Solutions to uh monitor the projects to provide location-based proofs about the activity that took place in the real world uh you'll hear you'll hear more from astrol here in a few minutes uh but first I'm going to walk through a couple examples of how carbon credit retirement has been embedded into onchain applications so just before I get into that a couple real world examples of how carbon credit retirement is already being used in the real world you know offchain so on one hand you probably already see this when you book flights occasionally uh you'll be offered an option to offset your flight uh basically what's happening on the back end is they're collecting a bunch of you know these orders calling people on the phone to settle them uh and usually like once a month or once a quarter they'll you know actually retire credits on the other hand you have manufacturers that want to compensate for the uh emissions associated with their manufacturing activity so one of the organizations that I work with carbon Mark is partnering with a battery manufacturer for Ev batteries who want to make truly Net Zero batteries so they calculate the emissions associated with sourcing the minerals and producing you know the battery in a in a factory and then they compensate by retiring carbon credits so that those batteries are not just reducing emissions from the you know ice engines the gas guzzling engines that they're replacing uh but also they themselves have a carbon neutral life cycle similarly uh when you're booking an Uber you may be offered an option to you know take Uber green and they will retire Carbon on your behalf for the the ride that you took package delivery similar idea um and really the the emphasis here is that by putting the carbon credit retirement closer and closer to the underlying economic activity we are surfacing the emissions intensity of that activity directly to the consumer and then it becomes a cost it becomes a question of you know do I want to take the train instead of the plane because it you know cost me less in terms of the carbon that I'm emitting and it also puts foregrounding in people's mind how emissions intensive is the activity that I'm carrying out maybe I could just go to the grocery store and buy this item rather than incurring the you know 25 kilograms of emissions that the shipping is going to uh have associated with it so the idea in a nutshell is integrate carbon credit retirement integrate the emissions impact of a given economic AC activity into the cost of that activity so as an example uh moving to the onchain world uh cadal worked with sushi swap uh last year to develop what we call the Green fee and the idea here is that every time a user engages in a swap on the sushi swap platform a small amount of carbon credits are retired now um there were a couple unfortunate aspects of this uh specific example it's just the best example I have to demo um in particular it was I recently found out that it was deprecated off of the produ sui swap uh application so I'm going to be walking through the source code and some of the documentation here just so you have a sense of how it works um but this is a really generic concept that could be applied to other dii applications uh it's just a useful example for us to go through um so I'm going to jump into the source code in a second I just want to quickly walk through the components that are going on here because it's there's like five different files we're going to be navigating across uh so on one hand there is the sushi router itself and this is you're familiar with if you've ever done a swap on sushi or uni or any other decks there's a router that decides which specific LP pool to swap through based on the input token and the output token and basically the way this feature is implemented is that there are two different router contracts one is the normal router that's the one up here it's sort of the default works exactly as you would expect you put in your input token you get out your output token on the other hand the user can opt in by basically clicking a flag on the sushi UI can opt in to a green router and what the green router does is it basically has a couple extra lines that that send a little bit of gas token in this case it's a polygon so it's pole token gets sent to a separate contract it's extra gas gets sent to an a separate contract called the swap retirement holder and that swap retirement holder has a function on it that will basically retire whatever car whatever um gas has been accumulated it will swap that that gas token pole for uh for carbon credits and then it will retire those carbon credits using the cadow retirement aggregator and this whole mechanism is automated using a chain link automation that once a day calls the perform upkeep function on this swap retirement holder to actually initiate the retirement of any accumulated fees okay so that's sort of the U the structure of how this thing's going to work I'm going to flip over now to the source code uh so there's a link to this in the slides um and there's a URL in the slides that's easy to find so um feel free to follow along so here in the uh claim Dow solidity repo I'm going to start by looking at how the uh Sushi router itself works so this is the sushi swap green wrapper this is the modified router contract and the most important thing that's going on in here is we have this function called Green swap tokens for tokens and all this does is it calls the same swap function from the main router contract it's importing the interface for the Unis swap V2 router calling the Swap and then right after that we send the native gas token a little bit extra was collected um by you know from the user and we send that extra over to the retirement holding address which is that uh swap retirement holder contract I mentioned earlier and then if it fails to send we just admit um a requirement so that's pretty much all that's going on here we added two extra lines that send a little bit of extra gas to this retirement holding address and then if we go over to the swap retirement holder contract itself in here there is a function uh called perform upkeep and this is really where all the action is happening in this function um we're basically going to check if we've done another retirement recently if it's been sufficiently long since the last uh the last time we did if it's been longer than the interval then we will carry out a retirement and basically we compute all the retirees that need to have a retirement done on their behalf and then we call the ca retirement aggregator retire carbon function and we're passing in basically the carbon token that we want to retire as well as the fact that we're using the native asset of Paul plus the amount to retire and some information about the retiree and then we fill in What's called the retirement beneficiary and the retirement message with these Sushi swap green transaction and retired using CLA daag Sushi swap integration uh just so that there's information on chain about why this retirement took place and where it came from this is really important if you're going to be doing an integrated carbon retirement that you think about who is the benefit beneficiary like who is going to claim this underlying benefit and what message am I going to put so that it's clear why this retirement was carried out okay that's really the meat of it um and then the only other thing that happens is there's a chain link keeper that is going to call that perform upkeep function it's pretty straightforward standard chain link keeper logic you basically configure uh the contract address that it's going to call as well as the function and any parameters that need to be passed to that function and you do that through chain link automation you can consult the chain link docs uh for more information about that it's pretty straightforward and that's basically how the the chain the sushi swap Green fee works I am going to just quickly show you how it used to work uh because it was deprecated recently um so basically you would come in here you're on your sushi swap trade page and basically under the uh you know extra settings there was a little flag uh that would say like Green fee and you it was opt in which was one of the things we went back and forth with them about because we really wanted it to be opt out so that by default all Sushi swaps would you know have this additional fee it was really a few cents I think we were doing five cents worth of madic uh or poll um but yeah they wanted it to be opt in I kind of understand why but on the other hand it's something to consider when you're implementing one of these uh retirement functions that um there should be a good reason why it's opt in or opt out and uh obviously opt in is um going to be more differential to your users but also fewer users will do it because as we know um basically humans are averse to taking actions so anything they have to do any extra clicks they have to do to make this happen is going to discourage people from actually using it but yeah that's basically how the sushi Green fee Works um and the sort of more abstract um or more General concept here that I'll emphasize is anywhere where you have a defi application doing some transaction there is an opportunity to integrate carbon credit retirement into that transaction in a pretty straightforward Way by adding a couple lines of code okay so now I'm going to move on to nft strategy examples that was a defi example example now we're going to look at some nft stuff so there's basically two different strategies that we've seen most commonly adopted by nft projects one is where you simply retire a batch of carbon at mint this could either be done as like a one-off transaction by the by The Collection Creator or it could be done where in the mint contract itself you have that you know retire carbon function similar to what we just saw with the sushi Green fee where basically you collect a little extra or you use a portion of the minting fee to retire some carbon another idea it's a little more interesting is to embed live credits so unretired carbon credits into the nfts themselves and then have some mechanism where users can you know either add more carbon or retire the carbon that's already in the The nft Tokens um so there's a few different ways you can imagine doing this you know we've talked to some game developers who wanted to have you know uh certain uh nft that represents an in-game object and you know like for instance a tree and if you water the tree then you it retires some carbon or something like that um some mechanism where the user interacts with the token and it results in carbon getting being retired we wrote a whole blog post a while back about these different nft strategies so if you want to learn more about that I encourage you to check out this blog post um like I said the slides are are going to be linked so don't worry about uh frantically typing this URL in but I want to go through a specific example of an nft project that uses um carbon credits and that's a a project called plant-based um oh let me should go back uh okay so project called plant-based and this is on the base chain using twocan protocol's new Char um biochar based carbon P so the website is plant- based. Art and they've also got some of the uh GitHub code provided by our friends at tan that I'm going to walk through briefly uh so this is the landing page for plant-based um it's a regenerative art series that evolves as you store carbon um so just play the little intro cool so um you know there's a few different functions here obviously you can mint the thing um and when you go to carbon it links you out to a page developed by 2en themselves um and basically the idea behind this collection as I understand it is that um you know users who hold the um who hold the the nft itself can put Char into the nft and then at some point they're still working on this there will be an ability to retire the Char that has been accumulated in your uh nft and over time as you add more Char into the nft uh it modifies the nft um yeah that's basically it and this function or this uh this collection ised using an underlying function created by toucan that they're calling the nft carbon extension and basically what this does is it manages the carbon Holdings of the nft so you know users can call um this contract to add carbon into the nft um and there's also going to eventually be a function for retiring carbon out of this nft as far as I know that hasn't actually been implemented yet um but one of the good things about this is uh if you're putting live carbon into an nft I would be careful and and consider how the carbon is going to be either extracted from the nft or retired because one thing you want to be careful about is not pitching the nft itself as like being a carbon credit because there's a lot of concern rightfully so in the carbon markets about what's called double counting where the same carbon credit is being used to make a claim that like I you know supported removing one ton of carbon through biochar dispersal um but then the credit hasn't actually been retired and then somebody else gets a hold of that nft and then they you know somehow get the carbon out and retire it then they're also making the claim that they removed one ton of carbon you know from the same credit um and that's very dicey I highly discourage you from doing that kind of thing um you always want to be thinking about if the credit is live how am I making you know how am I eventually going to retire that credit um or if it's going to be put in there retired how do I make sure that users are not making multiple claims or I should say that multiple users are not making the same claim based on the same retirement um because it's really important that we maintain the Integrity of this market and the one of the key aspects of the Integrity of the market is that a retirement is only ever claimed by a single individual for a single activity rather than sort of reclaiming or double counting the same activity over and over again okay so that's pretty much uh what I had to cover in terms of the nft strategies um like I said if you have any questions about how these Integrations work please feel free to reach out to me um and now I'm going to turn it over to John from Astro protocol to share a little bit about location based proofs and how astral is solving some problems yeah great thank you so much Marcus and thank you for the the thorough um overview of the carbon Market it's it's fascinating stuff and um it's definitely true that um this Advanced Digital infrastructure has the lot to bring to the eort eort of increasing the scale and precision which we're flowing Capital Into Climate impact projects so it's cool stuff um I may I think I I should take over because I'm gonna do also a little bit of a windscreen tour of our code base is that all right with you yep let me you gotta stop and I'll then start okay cool right so um I think we're good to go hopefully this is nothing embarrassing all right we've got the the slideshop up great okay so um yeah I'm just going to take a couple of minutes and talk through some of the work we've been doing at astral um and this is is quite a kind of developer forward um rundown of what we're building and some of the tools and um software that we've we're we're hoping Builders build with um for part of our challenges that we've sponsored in the funding the common hackathon so um just to give a very very brief uh overview Astro is an open- Source R&D studio for the decentralized geospatial web um you can find our website at as. Global and we're on uh Twitter and forecaster on under astral protocol um we also have a GitHub github.com protocol call so anyway um the big question that we're we're kind of perplexed by at ashel is this one here where are all the location-based adapts so much of the internet is useful because software applications use spatial and location data in part of their business logic this is Uber this is Tinder this is Airbnb this is Netflix this is Amazon this is Google this is so much of the way the web works and I the way we see it this has been really really underemphasized in web 3 um ethereum and blockchains are cyber native they're Global globally accessible di by default which is really a good thing but there's a lot that we can do by building tools um and software to be able to build location based services that still adhere to web 3 design principles and that's kind of what our entire emphasis is on how do we build web 3 alternatives to some of the um the services platforms infrastructure that run the geospatial Web currently and also what does web3 bring to the conversation that can actually uh improve on the way things work in um in web 2 and I'll I'll get into a bit of specifics on what I mean by that in a second um but the way we think about this is that there are three pillars or kind of research areas that we're working in um and these three pillars kind of constitute what we see as more or less the breadth of of the decentralized geospatial web those three pillars are location proofs um this is what I'll put a lot of emphasis in today's talk um there's also decentralized geospatial data how do we store spatial data like satellite imagery like vector tiles like vector feure sets like points lines and polygons on a decentralized data storage system like ipfs and then especially how do we query that using spatial conditions as input parameters so send me all of the points in this data set that are inside of the boundaries of Paris or whatever may be right um and then the third is this sort of uh much more experimental work we're doing an onchain GIS thinking about how we would build geospatial databases using smart contracts so that we can store uh Records that represent geographic features like cities or trees or mountains or whatever it may be and put that on a neutral globally accessible uncorruptable data storage and uh compute system like ethereum um so I'll focus in on location proofs first and then I'll talk a little bit about decentral geospatial data these are the two technologies that we have actually um built to a position where we think that devs can build with it so that's why we're we're sponsoring the hackathon and then I can talk very briefly or Point towards what we're going with onchain GIS and if anybody wants to talk about that I'm more than happy to so um location proofs are kind of trying to solve this problem that it's really hard to prove where you are or where events happen on the internet um and I mean prove in a more kind of robust way than the way it works now which is more that we measure where we are using GPS systems and then we self-report that we're there without any real robust ways of checking that that's actually true um so to try to solve this we've um built a location proof protocol that is an effort to create a standard data structure or data model to report locations that has all of the trappings of the web 3 design principles I mention so these are user controlled these are optionally privacy preserving these are cryptographically verifiable these are composable these are extensible and um to do this we used the ethereum attestation Service uh which is its own really quite interesting robust um very versatile ethereum based system for creating anti stations what we did is we built on top of that and defined a location attestation and I'll get into exactly what it looks like in a second but um right now the the location proof protocol is deployed on EAS instances on arbitrum Main net um cell main net and ethereum sapoia test Nets and we have typescript implementations of uh client functionality like creating and um registering location proofs on chain and also fetching location proof data so I'll go ahead now and actually jump into the docs and show you uh the quick start um which actually shows you how to start building with location proofs and then I'll also show you some of the resources and code that you can look at to see how we've got it running in a client application that we've built on the location proof protocol which is also available for anyone to fork and build with um so real quickly this is a quick start to show how to create location proofs and how to resolve location proofs from E both of these use the esas SDK which is well documented um we've got a link to the documentation it will be here in two seconds after I put it there um and uh we use an EAS config file that is actually something that anybody can pull from this defines the schema interface um as well as has the EAS contract address and schema uids that where we've got this registered if you dig into e this will all make a bit more sense but we're trying to make this as quick as we can so I'm assuming you have some familiar with the EAS um to create a location at to station you instantiate um the a new provider using ethers and a new instance of the EAS SDK um pointing to the blockchain where you want to register the attestation on and then you create a schema encoder instance with the string that is specific to the astral location proof um schema and then there's a couple of values here that I've kind of popped in dummy data which anybody can add what you want to and then this is how you encode it using the schema encoder that es provides and you go ahead and register this um transaction using the EAS SDK there's an ATT test method real quick that will broadcast the transaction and register it on EAS then it'll be on chain for anybody to look at and also for you then to in the next part fetch that data and resolve it into your browser or client application to then visualize on map so here same story um you've got to have the attestation U ID in this case and then you can use uh um this get out testation method and it'll fetch it and then we got a little bit of code to destructure and um see a couple bugs but to destructure and fetch out all the relevant data but that will at least get you the data and get you off and running um I made this pretty concise but you can actually see this code deployed in the Wild on the log book source code that we've we've built which um here for example the the um attestation page is fetching attestation data and then here um we've also got the check-in form where we're actually um pulling the data from a form that the user input and registering it on chain so that's creating and resolving location on to stations I know that's super quick but hopefully that gives you a bit of an orientation of what um what it takes to build with location proofs there's one other thing I'll say about it which is still very much in development but um we think there's no one size fits-all for proving location um online or on chain uh different use cases have different security requirements different privacy requirements and so to to accommodate this we've created an extensible data model where people can actually Define what we call location proof strategies and we've brainstormed a bunch of different types of strategies here and then um each one of these strategies you'll have to provide some sort of data that serves as evidence that the proof was created and adheres to that strategy and that evidence can be included in a location proof as well so when you when you see something like um here we've got the recipe type and recipe payload right now this doesn't mean anything but this would be where you'd attach say evidence that someone in an event checked you in and signed off that you were actually there that's an example of a strategy um all right two seconds left on the decentralized geospatial data storage and access systems this work was done by some friends of ours at the University of Maryland group called The easier data initiative they've got a whole really incredible blog walking through all of the research they've done um looking at how do you store large satellite imagery data sets terabyte scale data sets on the interplanetary file system and one of the pieces of of work they've done is querying spatial data on ipfs using geohashes which is a um discrete global grid system that segments up the Earth's surface into a series of increasingly precise um grid squares and so basically they organize the way the data is stored on ipfs using these geohash and then you have the option of making of fetching only the relevant part of the data that you want by querying based on the Cs Associated so that's about all I'll say on this this blog post is really thorough and really good intro to it and then at the bottom of the blog post they've got a link to their um project repository with IPython notebook so you can dig into the source code and figure out how to how to build with satellite imagery stored on ipfs um I'll leave it there but I'm I'm because I'm conscious I'm probably running up on my 10 minutes um although maybe just one last thing I will say is the whole idea of this in relation to the climate action track which is something we really support and a reason we're on this call is that these things are designed to be the underlying tool set that would help web fre developers build products that serve climate impact um for verifying climate impact for um monitoring it for scoping new projects for automating things like Insurance payouts or carbon crediting systems you know it's it's very very much early days this is very prototype experimental but our hope is that these tools mature and and develop into things that become really instrumental to to working on the climate crisis using blockchains um so just as an example location proofs were really deliberately designed to be used for monitoring reporting and verification providers like the vvb Marcus was referencing um they go out to a field site for example and take pictures of of a forest we want to be sure that they are actually at that Forest they would package up those those uh measurements in a location proof with evidence that they were actually there and it provides an additional layer of assurance that that that's an Integrity um kind of ecological survey and then decentralized geospatial data again um you know so many use cases dmrv use cases Marcus was talking about have uh satellite imagery needs and we want that satellite imagery to be stored on durable persistent uncorruptible cryptographically verifiable data storage systems because as they back higher and higher value Financial financial instruments there's more and more need to have confidence that that data is is um kind of what it says it is so cool that's it I'll I'll stop there thanks for the the slot marus and Tesa and uh yeah yeah really appreciate the time awesome thank you John that was really really insightful and I think um contrasts really well with the uh with the de demand side Integrations that we were talking about earlier um so thanks for sharing um cool so we're we got about eight minutes left um I wanted to leave a little bit of time for questions um so I'm just throwing up my contact info here and the link to the slides there at the bottom um so yeah if anybody on the call has questions feel free to uh unmute and jump in thank you Marcus and thank you John um John do you also want to drop maybe your contact information then in the chat although I think both of you are already on the F comments Discord so anyone that's watching this uh conversation um from the recording can also reach you out there um and yeah if anyone has any questions now is the time I actually do have one and I think maybe both of you can answer it I'm wondering uh Marcus when you were showing kind of the batht with the removal and reduction Parts I feel like uh you know all the project that I've seen different Heaton like most like we free Innovation around carbon uh or like climate action generally is to me focus on the removal rather than the reduction and I'm wondering uh have you seen any initiatives kind of focus on the reduction as well I'm thinking maybe like supply chain traceability and things like that that that you would really like to see work or that you can already enough to uh take out yeah so one thing I'll highlight is that the reduction versus removal discussion is um it's become quite political actually in the carbon markets themselves um so for context uh right now most of the carbon credits in circulation in the traditional Market are avoidance or reduction um mostly because those are the technologies that are most mature so for instance we understand pretty well how to install renewable energy how to improve the efficiency of industrial processes how to protect forests um removals are sort of new fangled uh and the scale um for context there of those two billion credits that have been issued since the carbon markets were created about 99% of them are reductions so in the web three space what I think is when you know I think what you're seeing is that uh recently there's been a lot of emphasis in the carbon markets on removals for varying reasons um I personally have like a bit of a spicy controversial position on this which is that we should reduce before we remove or like that um if I had to spend a marginal dollar I would rather spend a marginal dollar avoiding putting carbon in the atmosphere then it's already up there but we do need both because even if we were to go to emission zero today we've locked in 1.

5c of warming and that's going to cause some pretty catastrophic impacts so um yeah in terms of like in the web 3 space you know focusing on reduction I do think there's an opportunity for some consumer facing applications that help consumers make informed choices about you know the products that they're buying or the activities that they're engaging in in their lifestyle um for instance like one of the biggest sources of a missions in most people's lives is transportation um and so just getting people to feel good about taking alternative transportation whether that's you know rewarding people with some kind of reward token for riding their bike instead of taking a bus you could maybe use location uh attestations like John was saying to you know attest to the speed at which someone moved and you know show that they're actually walking or biking instead of taking a car um that's a really interesting idea I've seen some experiments in that vein um but yeah a lot of the reductions unfortunately come from industrial operations so you know in our own lives like I said transportation is the big one food is number two uh so food waste as well as the choices we make about um you know eating meat versus plant those are the two biggest sources for individuals to change their behavior but actually most of the emissions come from industrial sources so for instance power generation and uh land use change together comprise about half of all Global emissions uh and it's kind of hard for individual users to think about how they would change you know the way power is generated on their grid um but yeah I'd say the the biggest opportunity there in the web 3 space is around um basically consumer apps that help people make more informed choices about their own emissions perfect thank you so much um we only have a few more minutes left I'm wondering John do you also have any anything to share on that or any final words from you both before we rip out no I mean Marcus is a font of knowledge so you know it's a tiny coloring in the details more than anything I think he kind of Hit the overall overall nail on the head um only one thing comes to mind which is a mutual friend of Marcus in mine Mar Johnson is working on a a project called Nova energy and this is um a kind of web three play to um Monitor and understand the uh environmental impact of data centers used for um Bitcoin mining or you know blockchain validation as well as um training artificial intelligence machine learning models and um so this is an example of kind of getting a strong handle on what's going on as a a critical first step to then reducing the impact and then from of the emissions that are really hard to Abate or it will take longer or be more costly to Abate then carbon credits kind of come into to the mix and say okay well we've we're able to wind down half of our emissions but there's half that we're still doing for whatever reason so let's go ahead and buy buy avoidance or removal removal credit yeah yeah I love NOA what they're up to it's it's really interesting uh and it's also interesting to see the convergence between some of the arguments that were levied against blockchain early in the early days for its high energy usage and therefore environmental impact now being levied at AI um I think it really brings to the four this difficult um reality that we need to balance the value that energy and Emissions deliver to us as people with the negative impact that those that the energy consumption and Emissions have on our planet um because the reality is um you're never going to hear anybody talking about zero emissions that is not a realistic um trajectory like we're not going to not emit any carbon dioxide or any greenhouse gases the question is how do we manage the planet manage the climate so that we have a stable environment in which to live and Thrive uh but in a way that we're able to enjoy some of the benefits that energy and Emissions have brought to us whether that's you know air conditioning on a hot day whether that's being able to fly and visit some far off location there is real value created by the use of energy and the the emissions that are associated with them um and so I I think it's important to highlight that um reducing as much as we can is absolutely imperative but no one should go around the world thinking we're going to reduce to zero the question is how do we reduce as much as possible while still unlocking the value that we all have come to know and love and then removing emissions that cannot be evaded so that we can stabilize the clent and Thrive here on planet Earth love that I think that's a really beautiful call to action as well and you know some really difficult challenges to solve so hopefully we'll see some Builders kind of diving into that and again whoever you would like uh feel free to reach out to Marcus and John on Discord or also through the contact information they shared here and yeah we'll be looking forward to to the next workshops soon thank you everyone thank you Teresa bye bye