The Toucan Protocol, a service grounded in blockchain and smart contract technologies, provides the infrastructure for the tokenization of carbon credits that streamlines the trading process and expands their applications. You can read more about the Toucan Protocol’s tokenization and the carbon pooling process in this article. The Nature Carbon Tonne (NCT) is the result of such tokenization.
The requirements for NCT tokens are stricter than those for other Toucan Protocol Base Carbon Tonne tokens (BCT). The criteria include:
- Issuance only through the Verified Carbon Standard (VCS) Program.
- Use of VCS methodologies and solely nature-based solutions. If a climate project employs both a nature-based methodology and a non-nature-based methodology for the same credit issuance, its carbon credit tokens will not qualify for NCT.
- Acceptance of vintages from the year 2012 and later, accompanied by a 10-year rolling acceptance window.
Tokenization process started in February, 2022 and the NCT token was officially launched. There are currently about 1.3 million NCT tokens in circulation. You can check actual information about price and supply using Polygonscan or KlimaData.
NCT was previously widely used as collateral for Klima during the bonding process within KlimaDAO. However, this option is no longer available. This change comes after a statement by Verra, which led to the Toucan Protocol stopping the issuance of TCO2, the foundation of the NCT carbon pool.
Several factors have contributed to the significant decline in NCT’s price and trading volume:
- A general decrease in demand and prices for voluntary carbon credits.
- The announcement from Verra questioning the environmental value of such tokens.
- The inability to retrieve carbon credits from NCT tokens due to the one-way bridge model employed.
Being a pioneer, the NCT token faced limitations in its initial tokenization effort. The main issue stemmed from a lack of coordination between the tokenization process and the standard that issued previously used carbon credits. Additionally, the tokens themselves were not convertible back into carbon credits. NCT tokens are currently available for purchase on platforms like RegenNetwork and KlimaDAO, or through decentralized exchanges such as Sushiswap.
