NFT carbon loans are effective only during burning, experts say environmental problems bother both crypto industry and the world as a whole.
Adoption, Dao, Environment, Sustainability, Nft
The use of non -functional tokens (NFT) as carbon loans or carbon compensation opens up opportunities for Web3 technology that contributes to a more environmentally friendly future. The use of NFT as carbon loans is a slowly developing trend in the regenerative financing markets (Refi) and decentralized financing (Defi). Most of this activity is currently taking place on the Polygon blockchain, since he has already compensated for his entire carbon mark. However, how these digital assets work with carbon loans differs from other enterprises in this area. Not being a repository of wealth or a work of unique digital art, NFT of carbon loans serve as a repository of information related to a particular batch of carbon compensation. This information may include, but not limited, the total number of compensation (i.e. how many metric tons), the year of compensation, the name of the project, geographical location or the certification program used. Such NFT is then fractionated in ERC-20 tokens based on Ethereum, which can be exchanged for each other. However, unlike most of the NFT, accessible to consumers, which is properly functioning for carbon loans NFT has their own grinding. In order for him to serve his true goal - verification and replacement of compensation for emissions of carbon - it must be burned. In the conditions of the extracurricular carbon market, this is called "retirement." One of the main members of Klimadao, a decentralized organization using Defi to combat climate change, explained Cointelegraph, both operating both on the network and outside the network: "Resignation means that someone, in fact, takes this carbon offset and declares its environmental benefits, that is, in fact, compensates for its emissions. Then this carbon offset is forever withdrawal from circulation and can no longer be the subject of trade or sale anyone else ". However, when it comes to withdrawing these carbon compensations from circulation in the chain, it is necessary to burn token after receiving a certificate of withdrawal from the appeal. In other words, it must be deleted from the database and is no longer available for trade. "It is very important that in the case of any environmental claims to the offset built in the NMT, this NMT has been burned in any respect, and a specific legal or individual who made claims for this environmental incident is indicated. A large number of projects appears on the market applying for the implementation of NFT technology to compensate for carbon emissions, including Carbonable and Mintcarbon. However, with a market value of more than $ 850 billion, the carbon loan industry is not small. Like other profitable markets, it is subject to fraud. Since the popularity of NFT continues to grow, scams with NFT are becoming increasingly common. Similar articles: Scams in GameFi: How to identify toxic gaming projects NFT Klimadao emphasized that the projects applying for NMT as carbon loans should also have accreditation according to international recognized standards. Basically, this is the approval of the international alliance to reduce carbon emissions and offset. Otherwise, projects with such a statement should be carefully considered before investing under this pretext. Although the carbon loan market is very valuable, the principle of its operation is still unknown to the broad masses. "The fact is that you unite Web3 with a market that is not very well known. Therefore, unfortunately, you have various subjects that use people in their interests." Nevertheless, these NFT for compensation for carbon emissions can be really useful if they are completely disclosed, because they will do what they promise. These compensations ensure the infusion of capital from another source to maintain and develop the project. This can vary from the production of renewable energy to forest protection or forestry.