Tokenization of Carbon Credits (Emission Rights and Offset Credits)

The tokenization of Carbon Credits (Emission Rights and Offset Credits) can be achieved through various methods. Typically, this tokenization follows two main models: 'Custodial' and 'Non-Custodial'. Additionally, it can be implemented through a 'Native Issuance' approach.

	Custodial	Non-Custodial
Value of Carbon Offset Credits Issuance	Utilization of Carbon Offset Registry	Utilization of Carbon Offset Project Infrastructure
Transaction Value	Underlying Asset Transaction Value	Infrastructure Transaction Value
Proof of Retirement	Proof of Retirement Registration in Carbon Offset Registry	Proof of Infrastructure Technology (Blockchain)

Custodial In a centralized system, the tokenization of carbon emission rights and offset credits involves entrusting the ownership to a reliable intermediary or institution. Such intermediaries manage the issuance and trading of tokens and securely store the assets of the owners. This model is familiar to those accustomed to traditional centralized systems and offers additional reliability in terms of security and regulation.

Non-Custodial Emphasizing the core principles of decentralization and autonomy inherent in blockchain, the ownership of carbon emission rights and offset credits is directly granted to individual users. Users issue and trade their tokens independently. This process leverages smart contracts and distributed ledgers to ensure reliability and transparency. The non-custodial model facilitates direct transactions without intermediaries, enhancing transaction efficiency and offering advantages in terms of personal data protection.

Stable Carbon Offset Project Tokenization Model

The main reason we aim to tokenize carbon offset projects is to transform the concept of carbon credits into the form of digital tokens. This approach not only preserves the intrinsic value of the projects but also aims to increase infrastructure participation rates. As the participation rate in the infrastructure increases, so does the value of the tokens, which ultimately contributes to maximizing the overall value of the carbon offset project.

Before issuing tokens for a carbon offset project, two crucial elements are the "verification of carbon offset amounts" by certifying bodies and the "token issuance process based on these offsets". These processes act as key elements in ensuring the reliability of the tokens and the efficiency of the project.

	Reference Tokenization	Native Tokenization	바우처 토큰화
Token Base Value	Carbon Offset Registry	Carbon Offset Registry	Carbon Offset Registry
Issuer of the Token (Entity)	Third Party (Wallet)	Protocol (Smart Contract)	Ecosystem (Node)
Attributes of the Carbon Offset Registry Directly Represented by the Token	Yes	Yes	Yes
Ecosystem Attributes Remain in the Carbon Offset Registry, Ensuring the Token's Ecosystem Value	No	Yes	Yes
The Process of Issuing Tokenized Assets Occurs Automatically, Without Direct Human Intervention	No	No	Yes
Ecosystem Expansion System (e.g., Retirement, Donation)	No	No	Yes

Reference Tokenization The tokenization process based on the value of the carbon offset registry is conducted using tokens issued by an approved third party. Although the carbon offset registry recognizes the value of carbon generated by carbon projects, the tokens are issued through an Externally Owned Account (EOA) of the approved third party, which poses a risk of fraud and manipulation. This is one of the drawbacks of the carbon tokenization process, potentially affecting the reliability and stability of the tokens.

Native Tokenization The tokenization of carbon offsets based on the value of the carbon offset registry is carried out using protocol smart contracts. These smart contracts are controlled via a concept called 'owner,' which acts as an approved third-party agent. While the carbon offset registry recognizes the value of carbon from carbon projects, the approved third-party agent manages the smart contract through an Externally Owned Account (EOA). This management process is also susceptible to fraud and manipulation.

Voucher Tokenization In this tokenization process based on the value of the carbon offset registry, blockchain network nodes are used to tokenize carbon offsets. These nodes perform the function of certifying and managing the carbon offset registry as physical entities by operating node computing directly. Through this process, carbon offset projects are automatically tokenized at the time of certification, occurring without the intervention of a human wallet (EOA), thus eliminating the risk of fraud and manipulation. Additionally, the tokens created can be linked to other smart contracts, offering various expansion features like donations or retirement.