How do the carbon credits make their way on-chain?

  • Companies can earn carbon credits by sequestering one ton of CO2 (or an equivalent amount of any greenhouse gas) through initiatives such as reforestation and carbon farming. These credits can then be used to offset the company's greenhouse gas emissions.

  • To ensure the credibility of the carbon credits, companies must first have their credits verified through the Planetary Carbon Standard (PCS). PCS is an easy-to-understand carbon credit standard that assigns value to the credits, making them suitable for use in transactions.

  • Once the credits are verified, they can be purchased by other parties seeking to offset their own greenhouse gas emissions. By purchasing the credits, the buyer essentially pays the company to reduce emissions on their behalf.

  • Transactions involving carbon credits are logged on the blockchain, ensuring full transparency without the need for a third-party mediator, similar to how cryptocurrency transactions operate. Proceeds from these transactions can then be used to fund additional sequestration projects, further contributing to the company's sustainability efforts.

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