The Toucan Protocol
A high level overview of the Toucan Protocol
Below is a diagram of the overarching design of the Toucan Protocol. It shouldn't be thought of as a technical diagram, but more of as a way to get a sense of the different parts of the Toucan Protocol and how they interact.
The bottom of the diagram depicts off-chain registries maintained by standards bodies like Verra, who issue carbon credits when projects can show they've engaged in activity that meets their standard.
The Carbon Bridge provides an on-ramp for carbon credits from these source registries onto the Toucan Registry, a set of smart contracts built on Polygon, an EVM-compatible blockchain running on an energy-efficient Proof of Stake consensus mechanism. Currently Verra is the only source registry Toucan has connected to the Carbon Bridge.
Once bridged, tokenized carbon credits (called
TCO2tokens) can be deposited in a Carbon Pool. These carbon reference pools only accept carbon tokens that contain a set of attributes, meaning every TCO2 token in the pool shares a set of gating attributes. By depositing TCO2 tokens into a pool, users receive carbon reference tokens, a fungible pool token that is backed by one carbon token held in the pool's smart contract.
By aggregating carbon credits in the Carbon Pool smart contracts, the Toucan Protocol enables the creation of liquid carbon tokens like BCT. As fungible ERC20 tokens with deep liquidity, these carbon reference tokens serve as the carbon building block across Web3.