How can one BCT represent one tonne of carbon and how does the bridge work?
The bridge works by tokenizing carbon credits from real world carbon registries, such as Verra or Gold Standard. A Toucan ID is included when a batch is retired, creating a link to the on-chain representation of that batch. The retirement of a batch on the source registry returns a specific code, which code contains information about the specific vintage of carbon credits (year, type of credit etc.). This code is then posted on chain, creating an unbreakable link between the registries.
Once the retirement is verified and approved, the batch is activated as an NFT that contains the same code/information. This NFT can be fractionalized into TCO2 tokens, an ERC20 token where each token represents one tonne of carbon of that project / vintage.
TCO2 tokens can then deposited into compatible carbon reference pools such as BCT, where by depositing one TCO2 token, users receive one BCT. This way, one BCT is backed by one tonne of carbon held in the pool.
An overview of this process can be found in the documentation:
The Toucan Protocol
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