SIP-4: Carbon capture (with NZC)

Council recommendation: Positive 🙂

TLDR

This proposal advocates for The Sandbox's acquisition of Carbon dioxide removal (CDR) tokens from Net Zero Company, a highly reputable Carlyle company based in Stockholm, Sweden. It suggests creating a SAND-CDR trading pair, enabling users to directly contribute to carbon neutrality by exchanging SAND tokens for high-quality CDRs, representing a pioneering move in fungible tokenization of carbon credits. A CDR from Net Zero Company had been physically removed from the atmosphere and credited by a reliable institute.

What

This proposal seeks The Sandbox's initiation into environmental sustainability by acquiring Credible Carbon Removal (CDR) tokens for creating a SAND-CDR trading pair, promoting direct user investment in high-quality carbon offsets.

Why

The initiative underscores The Sandbox's commitment to leveraging blockchain technology for global sustainability efforts, offering users a meaningful way to participate in carbon neutrality.

How

• Initial Acquisition: The Sandbox will enter into an agreement to purchase CDR tokens from the Net Zero Company. This initial step secures a foundational volume of high-quality carbon credits, preparing Sandbox for the next phase of market engagement.

• Market Integration and Trading Pair Creation: Upon the CDR tokens becoming publicly available, projected around July 2024, the Sandbox team will establish a SAND-CDR trading pair. This pair will be launched on an exchange, facilitating the exchange between SAND and CDR tokens. This approach not only enhances liquidity but also sets a precedent for environmental sustainability in the DeFi space.

200k SAND to purchase CDRs, and 200k SAND locked to be able to set up an exchange pair.

When

The CDR tokens are expected to be live by the end of Q2 or the beginning of Q3, with subsequent availability for trading. The acquisition of the CDRs representing high-quality carbon removals will be purchased in Q2 2024.

Where

The trading pair will initially be available on decentralized exchanges, facilitating global access and participation.

Who

Net Zero Company is a forward-thinking enterprise committed to combating climate change by offering nature-based, already sequestered carbon removal solutions. They leverage blockchain technology to increase the accessibility, trust, and transparency of carbon dioxide removal credits (CDRs). Their diverse portfolio includes high-quality, nature-based projects worldwide, ensuring a reduced risk and a tangible impact on carbon emissions.

The team at Net Zero Company boasts a rich background in the carbon space, equipped with expertise and innovative approaches to tackle carbon emissions effectively.

The major shareholder of Net Zero Company is Carlyle Group, a global investment firm based in the U.S. with a significant presence in various sectors, including energy and natural resources. Carlyle Group is known for its vast resources, extensive portfolio, and commitment to sustainable and responsible investments.

For more detailed information about Net Zero Company and their initiatives, please visit their official website. https://netzerocompany.org

SIP Details

Background

In an era prioritizing environmental sustainability, integrating real-world carbon neutrality efforts into digital platforms has become crucial. The Net Zero Company specializes in the highest quality CDRs, marking a significant stride in environmental responsibility.

The proposal involves The Sandbox acquiring CDR tokens managed by the Net Zero Company and establishing a SAND-CDR trading pair, providing a seamless mechanism for users to engage in carbon offsetting activities.

Rationale and Benefit

Leveraging the Net Zero Company's reputation and expertise ensures access to premier carbon removal credits, enhancing The Sandbox's environmental initiatives. This approach not only supports global sustainability goals but also positions The Sandbox as a leader in digital-environmental integration.

Risk Analysis

The risks are minimal, primarily related to market dynamics and regulatory landscapes, which will be mitigated through strategic planning and legal diligence.

Implementation Plan

The Sandbox to sign a purchase agreement of the asset backed token CDRs, which will be delivered when the token goes public (end of Q2).

The Sandbox DAO to setup a trading pair of CDR/SAND.

Resources Required

200k SAND to purchase CDRs, and an additional 200k SAND locked to create the pair

All CDRs, which are backed by real-world assets, are 100% owned by The Sandbox DAO.

Metrics for Success

Metrics include transaction volumes of SAND-CDR trades, user participation rates, and impact on carbon neutrality projects.

Voting Options:

• Yes - Approve as proposed
• No - Reject the proposal
• Abstain - Cannot decide

Voting Period: 14 days

Appendices and Additional Resources

• Net Zero Company profile and CDR token overview.
• Technical and legal assessment reports.

Robin Stenman

rs@netzerocompany.org

Net Zero Company AB Birger Jarlsgatan 20 114 34 Stockholm Sweden