How is BCT not double counted?
Preventing double spend and preserving integrity
How can Toucan be sure that people won't retire credits that they convert to BCTs but also use (in the real world) to offset — i.e. double use them?
Toucan's bridging protocol was designed to securely preserve the integrity of these assets, and to ensure no double counting can occur. By transferring this value to a token held on a public blockchain, increased carbon credit utility is unlocked.
To achieve this secure digitization, a user bridging a batch of credits must permanently retire the batch on the source registry, and publicly declare a Retirement Beneficiary, Retirement Reason and Retirement Detail.
Retirement Beneficiary: the Ethereum account that will received the bridged batch of credits. Retirement Reason: "Other" — indicating that the credits are not being retired "for a Person or Organization" or for "Environmental Benefit". This field is crucial to make it clear that these retired credits cannot be used for carbon neutrality claims, as this would constitute double usage. Retirement Detail: A cryptographic reference to the "BatchNFT", the digitized representation of the batch being bridged stored in a non-custodial smart contract operating on the Polygon blockchain.
Before a batch is "approved" and activated on the Toucan Registry, these details are verified — any error results in a rejected batch.
Toucan requires that this retirement be publicly verifiable on the source registry — anyone examining a retired batch can see that the VCUs were retired to be digitized with Toucan. Many independent third parties have done a full audit of the integrity of Toucan carbon tokens and the bridging process — here's a community member's open source analysis, as an example.
A diagram detailing the Toucan bridging process.