What is Klima DAO Coin and Is It a Scam?
Klima DAO (Decentralized Autonomous Organization) is an interesting protocol, thanks to its noble goal of helping the planet’s polluted environment. You may be wondering what a crypto project such as this one has to do with ecology? This may sound suspicious and one should always be cautious in the uncertain world of crypto.
So, let’s take an in-depth look at Klima DAO, which should answer all the questions you may have.
Is Klima Crypto Legit?
The question in the heading above is a rather complicated one. Klima DAO is a legitimate project in the sense that it is not a scam. However, is it actually a useful project that will bring good to the world and put money in the users’ pockets? Well, that is another thing altogether.
But, let’s start from the beginning.
The Battle Against CO2
Klima DAO is part of the broader movement to reduce emissions of carbon dioxide. In simplified terms, those companies that contribute to environmental pollution (such as airlines and oil companies) can use the money obtained from selling carbon credits to finance the reduction in the overall level of pollution they’re causing.
For instance, a renewable energy plant could be built that would eliminate the need to burn extra coal and thus lower the amount of released carbon dioxide.
Blockchain-Based Carbon Offsetting
Klima DAO is intriguing because it is one of the few projects that bring the concept of carbon offsets into the world of cryptocurrency. It does this by providing a chain of tokenized carbon offsets, in the form of BCT (Base Carbon Tonne) tokens.
The advantage that blockchain technology provides over the standard means of carbon offsetting lies in its transparency. Namely, records of accounts involved in transactions and the prices paid for individual offsets are, for the first time, available for everyone to see.
Moreover, there is great dissatisfaction with the way that carbon offsetting is currently handled. The TSVCM (Taskforce for Scaling Voluntary Carbon Market), which is a private sector-led initiative seeking to optimize the voluntary carbon market, reported that less than 5% of offsets have actually contributed to the removal of carbon dioxide from the Earth’s atmosphere.
Because of this, Klima DAO’s aim is to incentivize the purchase of those carbon credits belonging to low-quality projects. The idea is to force people to buy (more expensive) offsets that might actually help to save the Earth.
In other words, the goal is to sort of lock away such cheap projects, that don’t actually contribute to improving the ecological circumstances.
Issues with Klima DAO
Unfortunately, Klima DAO, and other companies connected with blockchain-based carbon offsets, have faced serious detractors in the past months. Gold Standard is a major standard program for the regulation of carbon offsets projects. According to its head of the environmental markets, Hugh Salway, such blockchain projects can actually be unhelpful.
It seems that plenty of companies involved in blockchain-based carbon offset don’t actually need the financing they’ve acquired in this way. An extremely important concept of carbon offsetting is called additionality. It basically means that the credit is only worth it if the company could not have financed the carbon-reducing activities without outside financial assistance, which is otherwise wasted.
Many BCT tokens are linked to renewable energy projects that are more than a decade old. According to Barbara Haya, a research fellow at Berkeley, when a project doesn’t issue credits for years, there’s a very real chance of the project not really needing the offsets.
To name an example, Dayingjiang-3 is a hydropower dam in China that has converted more than 2 million credits into BCT tokens since last December. Given that Dayingjiang-3 is an existing dam that has been in function since 2006, does it actually need this kind of financial assistance? Not really.
In fact, Grayson Badgley of the major public benefit organization CarbonPlan, has stated that most blockchain-based carbon offset projects wouldn’t be eligible for trading on commodities exchanges and carbon markets that offer carbon offset contracts. The reason is that those projects started before 2016.
Klima DAO Objects… But with Little Success
Klima DAO’s response to criticism doesn’t make us particularly optimistic as to the future applications of the project. Namely, the company’s representative Natacha Rousseau admits that there is a definitive problem with the supply side of things, as one of the key concerns related to carbon credits historically has been associated with the quality of the originating projects.
On the other hand, Rousseau claims that Klima DAO’s job is, in fact, to scale up the voluntary carbon market. She cites the estimate of the aforementioned body TSVCM (Taskforce for Scaling Voluntary Carbon Market), which predicts that the volume of the voluntary carbon market will need to grow as much as 15 times, by 2030.
Rousseau states that Klima DAO’s mission is to empower everyday people, who are incentivized to buy low-quality credits and earn BCT tokens. However, that doesn’t really address the ongoing issue of money from Klima DAO’s blockchain going to inadequate creditors.
In fact, it seems that such projects are now drawn to blockchain-based carbon offsetting because it allows them to sell cheap credits. According to CryptoPlan’s analysis, many developers who haven’t issued credits in years have suddenly reappeared and started to sell again. This has shown that the plan to buy off all such cheap credits is deeply flawed, as it has lead to more cheap credits appearing than there were before.
In brief, it seems that Klima DAO is yet to provide any tangible positive effects on the level of environmental pollution.
What is Klima Crypto?
So far, we’ve discussed Klima DAO’s usefulness (or lack of it) in terms of ecological impact. But what about the profit that an average crypto user can reap? Well, in this sense, Klima DAO is certainly legit.
Once a carbon credit is turned into a BCT token, the buyer can use it to offset a tonne of carbon dioxide (1 Base Carbon Tonne token = 1 tonne of carbon dioxide reduced from the atmosphere; in theory, at least).
But, the buyer can also turn BTC tokens into KlimaDAO’s “carbon-backed currency”, simply named KLIMA. Given that cheap credits can be bought for less than $2 each, and that the current value of KLIMA amounts to $3.63 according to CoinGecko, the opportunity for profit is obvious. Just 30 days ago, KLIMA’s value was over $7, meaning that users were able to make an even larger profit until recently.
Where to Buy KLIMA Crypto?
If you’re interested in making a profit with Klima DAO crypto, we’ll mention two different ways that you can obtain it.
The first one is to use your credit card and buy KLIMA with fiat currency directly from Klima DAO.
The second way is to swap for KLIMA crypto through a decentralized exchange (DEX). Klima DAO suggests using a DEX aggregator called Zapper. For this method, you’ll need a Polygon wallet with MATIC.
Ultimately, even though Klima DAO is legit and you can make a profit from it, it’s quite a shame that a project such as this one, which seems to be genuinely dedicated to a worthy cause, is not only having trouble with achieving that, but is likely making matters worse.
If nothing else, Klima DAO, as well as other similar protocols, can be a solid foundation upon which future blockchain-based carbon offsetting projects may build, after learning to avoid their predecessors’ mistakes.