For context, read CAP for VCM first.
As the world grapples with the urgency of climate change, innovative solutions like CAP and Toucan are stepping up to the plate, providing key infrastructure to digitize and tokenize carbon credits, and revolutionizing the voluntary carbon market. This piece aims to explore the unique propositions of both CAP and Toucan, and proposes a collaborative framework that could enhance the effectiveness and reach of both systems.
Toucan is carving out its niche by providing substantial liquidity to digitized carbon credits from various registries through its Uniswap V2 Liquidity Pools. This is a major accomplishment for the carbon markets and opens them to the world of decentralized finance. This unique approach is democratizing the carbon market, making it accessible and transparent.
Where Toucan offers liquidity and a transparent blockchain-powered database for carbon credits, CAP provides a protocol for the lifecycle from impact claims to verified carbon credits. As Toucan and CAP are both EVM-native, they can coexist harmoniously on multiple chains together.
As we collectively strive to build a healthier planet and a more sustainable future, let's make the best use of the tools and protocols available to us. We propose a collaboration between the CAP and Toucan teams to bring this vision to life. By working together, we can revolutionize the landscape of carbon and ESG markets and amplify our collective impact.
With the shared goal of fostering a more sustainable future and a more efficient carbon market, it would be incredibly beneficial to metaphorically and technically bridge the strengths of CAP and Toucan. The proposal is to build a two-way CAP to Toucan bridge, allowing CAP eco-certificate holders to pool their certificates in Toucan's Pools, and those who redeem wrapped eco-certificates can unwrap them into CAP eco-certificates.
This integration would not only enhance the functionality of both systems but also foster greater transparency, efficiency, and credibility in the carbon market. It would seamlessly connect the needs of the voluntary carbon markets addressed by CAP with the liquidity offered by Toucan's Pools.
Moreover, this integration would address one of Toucan's challenges — providing programmable carbon credits. Currently, Toucan's efforts are bottlenecked by centralized evaluating bodies, which limit the capacity for developers to create unique applications that tap into global financial markets. This bridge would unlock the native issuance market for Toucan.
Let's combine our efforts, expertise, and creativity to turn this proposal into reality. Let's build a future where carbon credits are not only auditable, credible, and liquid but also proactively nurtured, grown, and scaled. Together, we can unlock a new era of climate action.