MakerDAO Community Collateral Onboarding, 28 Apr 2021

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From YouTube: Collateral Onboarding Call #31: MCO2 Token - Wednesday, April 28, 2021

Description

Collateral Onboarding Call #31: MCO2 Token

Intro by @JuanJuan
Presentation by @renankruger

Agenda: https://forum.makerdao.com/t/collateral-onboarding-call-31-mco2-token-wednesday-april-28-16-00-utc/7615

Governance Forum:
https://forum.makerdao.com/

Disclaimer: These calls and the summaries are produced and hosted by MakerDAO community members. Content produced by the community are not the statements or views of the Maker Foundation.

A

Hi, everyone welcome to our collection, boarding, call number 31. Today uh we are touching in on real world finance, so we are with this uh interesting project called uh most earth, so the mco2 token, and we're here with the rennan and bernardo that are going to be presenting the the token, and hopefully, we can discuss more and see how this this works.

A

uh Renault, if you want to give a brief introduction about yourself on the project.

B

Perfect, thank you. Thank you for the opportunity. Thank you for the community of mercedal bringing us here today. I am the cto of moz.turf.

B

Unfortunately, our ceo couldn't join us today, but me and bernardo, which is our crypto advisor and he he is in the crypto space for a long time.

B

I think he can introduce himself and tell a little bit about him.

C

Yeah, so um very short, I mean crypto since 2013. um been in many projects. Recently, I structured the first security token latin america. I helped the btg petrol with their security token as well. They were the first investment bank to issue a token in the world. um I joined mercado bitcoin, which is the largest exchange here in brazil.

C

uh I'm currently the head of innovation there and I've been advising moss for, I think, six months or seven months, something like that, because I really love what they're doing and how they're getting the best out of crypto blockchain um to help. You know not very nice purpose to help the amazon and and to help fighting climate change. uh I've been also advising a few other projects, such as hotel network and nifty.

C

So you know pretty busy, as everyone is in the crypto space.

B

So guys, mazda turf is already the biggest climate tech in the world. We are the major broker, uh selling carbon credits, tokenized carbon credits in the market. We are in some exchanges already on mercado bitcoin, on probate, on uni swap as well on cello network on ubiswap.

B

We have a lot to grow. We have a lot to.

B

We are talking with uh tire one exchanges like kraken and binance and coinbase, but you guys know that it's very difficult to be there, but we are working so just a pitch here. uh During this presentation we will lose 15 football fields on amazon forest. Just to give a half estimation here, it's not.

B

100 percent correct, but just to give an estimation for you guys what we do is.

B

We are worried about the climate change in the world and we thought we could do something to stop this.

B

We could, uh in the private private sector, create a solution which will help the the climate and, at the same time create a economic incentive to people, buy carbon credits, which is a global commodity, but it has a very illiquidity market and bernardo join. If you want on the whenever right, uh it has a very liquidity market. It has some uh regulated markets on europe or california, but at across the world we don't have one market to be trading carbon credits. The idea of mos is to create that by doing on ethereum blockchain, okay.

B

So what we do we, we do a due diligence on uh course conservation projects in amazon rainforest. We go there and through a global registry called vehi.org, we buy carbon credits from projects direct, so we buy those credits we pay for them. Then we create a flow with armanino. You guys may know to audit the process bringing from vera system to the blockchain. We we have this audit report on our site, so we go there.

B

We buy credits from vehicle.org, then we tokenize it on ethereum blockchain on msco2, and then people can buy it from our site. Moss.Turf or people can buy from exchanges like mercado, bitcoin or uni, swap or probit.

B

Whenever we are that's the the main idea, so we already sent to the projects eight million dollars, which is a lot more, the from more than the government budget to protect amazon already. So we believe we can do a lot more.

B

What is uh msu talking? It's uh erc20. We have a very cons confidence because we did all the certification process bringing from the real asset to the blockchain uh via uh ernest young armanino. Certain k and also perkins q certifying that this is not a security, because it's not a regulated market. It's autoregulated.

B

We, we are on the voluntary voluntary market. It's it is called. We have regulated markets in on europe which they sell ewa emissions units allowance allowance. You may hear about this, but we are on the voluntary market from carbon credits. Okay, uh we have uh the goal to increase carbon prices, to uh send more money to amazon in forest projects, as well as creating a liquidity market, a liquidity, global market for carbon credits, which is not the case right now.

B

Right and the difference between a global commodity like oil or carbon credit is, it is not tangible. It is uh not easy to see one ton of co2 extracted from the earth, so we did it along with blockchain technology on ethereum to create that transparency.

B

B

uh This is how what we uh I wanted to to point you guys to to give a brief introduction, but we can discuss a lot more and bring questions. You may.

A

Have so ryan, I guess my first question is: uh what's the need for or what's the use case more than, they need right for for a company to buy this on the ethereum blockchain compared to a to a centralized company with their reputation and well. You also mentioned ui and different companies.

B

The idea is, they can hold the carbon credit asset and consume them until moss the one the one functionality carbon credit has was offset, not investment. We create both. They can hold the asset and leave to to offset later something uh some. Some guys in in some studies from uh fme uh tells that.

D

B

Amf tell that the carbon credit could go through 100 right now. We, our token price, is 14 dollars. The eua price is 40 euros euro in europe, so we have different ranges price because of the eliquid market. They people could buy to offset some carbon fruit footprint to sell green products to sell green products or they could hold mso2 asset and then, by doing that we have a unit of his reserve value, but it's different from gold. For example, gold. You have to make holes on the earth and extract gold.

B

In this case we are creating value from doing good from from protecting uh amazon rainforest and sending money to the the to the projects on amazon. That's the the difference. We think we could.

C

If I may, you know, if I may add some color here um from an economics point of view from a you know, uh perspective of externalities right, negative externalities. Everything we do on earth creates an impact right. So if I'm building this house- and I.

C

I have to cut, helps uh neutralizing co2 emissions right. uh So, if I can, if I want to compensate this tree, that I cut it, I can have other trees and then I can plant other trees or I can play projects that that that take care of large areas and and these projects can be certified and these certifications are global. So any carbon credits is is global right. um But if, if I want to compensate my impact, I can just go to any global carbon credit project and and buy credits from them right.

C

So um this is something that already exists, but the way that it works in the traditional economy of carbon credits is that um even that carbon credits are just digital certificates right, because you're just buying a certificate that says hey, I'm a project that uh I maintain these trees uh up right and and by maintaining these trees intact. We are protecting this area right, even if these certificates are digital, um there are negotiated traditionally in a very offline or you know, uh direct or you know over-the-counter way right.

C

uh What we are doing in moss is really using the blockchain to create a market for something that is global, that is a commodity, but that that traditionally is traded. Very you know in in over-the-counter ways. I don't. I can't find a better way to say this in english, but uh we don't have a flying.

B

Way, calling projects and trying to buy this, their selves, some there's.

C

A lot of inefficiencies in the traditional market for carbon credits right and and what we can really do by having a token that is global trading 24 7 on the top on on blockchain, uh is helping everyone on earth to have access to these credits and to maybe neutralize their impact with the best price discovery they can do right. Instead of having to call and enter different projects and see uh you know what price is uh project x, doing and project y doing.

C

uh You can just buy a mr2 token that that has a very good price discovery mechanism. That's a free market right and go.

D

On please, oh sorry, uh I have to run in a bit, so I wanted to get a couple questions, and can you speak a bit about say I'm a company? I need to do some offsets. I purchased these tokens. What's the process for which I consume them and they're removed from the market.

B

You have to burn it on our site, they it's a centralized burn to know people you have to go to our site and then you click compensate. Then we burn the tokens.

D

And you're only in the voluntary market at the moment, correct.

B

D

So just to play devil's advocate, because I really like the project you've got here. I like everything about it, the structure but just from a collateralization standpoint, because this is a voluntary thing. What's to keep me from being a company or organization that says I'm going to offset, you know a ton of co2, I buy one of these tokens.

D

uh I would normally just throw this down a hole by going to your site burning it, but I've already purchased it what's to keep me from lowering my cost basis by then collateralizing it for a loan with maker and then walking away from the loan.

B

I think the idea that we could the carbon price could be improved in in the future. It's the idea to hold m32 tokens right now. We are dealing with 14 and I, I believe, the carbon prices.

B

Let's say more people are willing to offset flights or offset as well. Btc we sold to to a company called one river asset management. We sold for them 200k tokens to compensate their custody of uh bitcoin so well they have green btc as well. So the idea to maintain.

C

Can I just just put something here: um every token that we are trading in in moss is already a negative.

C

What you're doing you're, indirectly increasing demand for more projects that issue more tokens that we can burn in the future? That, if you, if you're buying mco2 to hold you're just increasing demand, that's that's already a good incentive. You know you're already doing something good you're, not burning it to neutralize, but you're already doing something you're uh expressing that you value more um the market to have more mco2, issued and and the price appreciating, and that you're you're, giving more value to you know the the forest being there than dollars.

C

On the other hand, right, this is just.

D

Yeah but okay, maybe let me let me rephrase it let's say I'm an environmental corp uh organization or I I want to to support this kind of market. Let's say I buy a hundred of these credits and instead of formally retiring them through your system, uh I just instead throw them in a maker. Vault use that money to then buy more credits and loot and tell myself that I'm I'm getting even more offsets for the same amount of money.

C

You're, not yeah you're, not off setting you're. Maybe you can justify. You know that you're buying for 10 years and then you're gonna be offsetting each year. What's the right amount that you want to offset, but you want to have this talk for 10 years. So that's why you're politicizing and you know that, but the idea you would be wrong if you say that you're buying uh and you're not burning the token and because you're buying your offset you're, not offsiding, if you're not learning the token.

B

There is a difference between have a and you having a good pro green product and buying carbon credits. You can only have a certificate saying that you are carbon neutral or something. If you offset your carbon footprint, if you just buy, you cannot say it, it will be green washing.

B

But if you buy and then wait each year to offset a part of it, then you can say each year that you, you are being carbon neutral. Then the market has some stamps that can be carbon neutral or carbon friendly or carbon negative. Depending on the amount of tokens you burn.

D

Okay um and again, I'm limited on time. So let me squeeze in another quick question here. So um tell me again a little bit more about where you source these from my understanding. Is you mostly get them from agrocortex.

B

No three projects uh on. Let me show you here on our site, just a minute. You can find on our uh site the main three projects we do do: diligences agrocortex, etushi and amazon hill. So here on more, let me show you can find the vehicle description of the project, which is the global custody we buy it from. So they have the total amount of tokens generated.

B

They have a buffer because they they have a stake if they not comply with.

B

The rules of vera they can be burned, so they have to maintain the forest for more years, uh not just take the credits and and burn the and stashed the the the the forest, but that this is all about voluntary market.

D

Okay and um one when last question I had, in addition to diversification of sourcing partners, um these are all generally sourced through the same methodology of um calculating um via historical trends, correct.

B

D

So, just again, hypothetically, you know we have to think of worst case scenario um say somebody finds some issue with methodology uh and uh makes a big stink about it. um How? How is that going to affect the market for for these, particularly given that they're voluntary and there's not uh a regulatory requirement yet for them.

B

Yeah uh we think vaha is the mo the biggest player on the space and they work with voluntary market and regulated market as well. We don't believe they can have some problems when on their methodology, it is the most known methodology. But yes, we would have some problems on that.

D

Thank you, and actually one last one is um how do you, how is with regard to the market? For your token, given that this is a co2 offset which is effectively a commodity?

D

How are you going to ensure that your token maintains a deep and liquid market in the face of competitors, because I just I've literally seen people on open seas, doing uh like, like individual people, just doing one-off carbon offsets as as nfts for um like just as artwork? But how do you prevent, like some new player coming in and taking a market once you've built it? That's my last question. I promise.

B

Yeah, if no it's not a problem, there are.

C

You believe questions.

B

Yeah yeah, we have like right now.

C

B

Contracts, uh 20 million carbon credits on moss behalf- I would say it is a lot for the market we prevent by buying more credits from the market, but we cannot be the only one working uh on carbon credits market we. We would like to be a dow or a protocol that we have a two-sided network from the projects and from the buyers.

B

We are working with mit and we el to create a carbon registry right now, it's very difficult and very expensive to uh create a project on vehicle like 500 million uh 500 000 dollars in three years, and you need like 70 acres of area to do that. We believe that we can create a new way to verify this, along with this kind of companies of mit or eao, to build a new way to certify projects. That's the idea to prevent or to have uh the two-sided network effect.

A

Maybe this is a very amateur question, but I'm wondering what these companies do to actually offset, because basically, what you're doing is outsourcing the the carbon.

A

So your your your footprint, you're outsourcing it to someone else, and hopefully they will do something to yeah to clean it. But if you buy one of these credits and there are more companies doing it, potentially this will drive the price down right.

B

No, if you buy one, if it will drive the price up right, because it will have less carbon credits on the market.

A

But but I mean I, when you buy one of these tokens, you strive if less companies are producing them and then there's more scarcity and potentially your.

C

Token is worth more, but what you're saying is that um yeah and that's what's actually happening right last year. uh The price of the carbon credit here in brazil was around three dollars and now it's around eight dollars right because.

B

We bought a.

C

Lot of the whole sale on this is on the whole sale right. uh So when we're we're we're selling to retail at now at 13, 14 15.

C

uh What you're saying is that hey guys, let's you know, create more projects, verify more projects at vaha, because we can issue more tokens that that's not that's, not a limited supply, and this is a good thing. So the price goes up. You know, investors make money, uh more people buy more land to prevent them to be. You know, cut down uh and issue more tokens and that that's that's a good cycle. You.

B

Know it's it's like to run five more five times more with your car. If everybody runs five more times uh if their cars, the price of oil would increase right. If more people are buying carbon credits and protecting projects and investing in the commodity, we would have less more demand and less carbon credits.

B

Then more projects will jumping. Then the demand will go down. It's it's the same uh like another commodity like oil or anything. You can can think about.

A

Gotcha um and what? What does the? What's? What determines the the price of of the of.

B

The free market free market right now we have some uh locations like california and europe. Let's see how much is it on europe? uh It's.

E

Not pegged to the price of uh per ton right.

B

No, no! It's carbon! uh It's free market right now.

C

The difference between the the regulated market and the voluntary market is, of course, that companies in the regulator market they need. They are related to offset right. So tesla receives a lot of money from gm from ford, because tesla is creating cars that are carbon, neutral right and then ford and gm have to pay for for for the emissions that tesla is. Is you know not nothing, not issuing, or something like that? um So this is like the regulated markets. They are much bigger than the volunteer market.

C

The voluntary market, on the other hand, is getting a lot of attention and a lot of people really. You know pushing the companies, and this is a collective human effort right. If I want to buy a flight here now, I have a. I have an option that I can buy. Just the the regular chicken or I can buy the green. You know co2 neutral flight and it will cost me- maybe five percent, ten percent more. But that's that's what I want to do right.

C

That's that's the the voluntary market, so companies uh right now in brazil, for, for instance, uh we neutralize it uh ifood, which is kind of like the daradosh or you know, uber eats in brazil and they're getting marketing. That's it. You know. Companies are offsetting because they want marketing. They want uh millennials that are green people and and all that.

B

It's about people's con uh cons, conscience is correct um and in europe for example, example, the the companies are obligated to buy. We have like 44 euro by by town in our price, it's 14 right now or 15. I didn't didn't see today, but we have this difference because of uh illiquidity markets and spots on the world uh to not have uh only one carbon credit market.

A

B

We are creating an instant burn solution it. It is in on a second layer on cello blockchain, which will allow to create green products like green starbucks, coffee for more 10 cents. You can turn your coffee on green coffee and then we will burn parts of one ton and then once a day will cross the bridge to the ethereum blockchain and then burn it on the main smart contract.

B

So we can create green mcdonald's, green burger, king green delivery, green everything and the green bit coin or green. You know as well.

E

So sorry, uh could I have you walk through kind of the the issuance process, because I I guess from like my end, if I'm someone hey I'm working in crypto, so I want to offset my crypto assets, um but if I'm going to buy credits like ideally I'd want, my money to be going to, you know actually purchasing the more conservatory rather than the last person who who bought the credit. So is there any way for me to participate in these like newer, onboarding.

B

Selecting projects, it's a good idea, for we can create a governance to people voting where we are buying projects right now we do our due diligence to find the projects. uh Our uh most important report about the issuance of the credits is here uh it's from our our menino, where they find out the event or we put on blockchain and the process we do from from our smart contract.

B

We have here you you guys, can look at it and then you have all the serial numbers how the batch we put on blockchain uh and the the year of the vintagey, which is the year of that credit, was registered and extracted the co2 from the earth.

E

And how are you determining the amount of carbon savings? I know like bloomberg, just came out with a report about a lot of those being overly inflated.

B

We we are not doing that, it's verha, we, we just buy certified projects from there. We we don't get involved in that, because it would be a conflict of interest. I I would say we just buy, release it and certified credits from vehicle, and then we call the project and we ask you guys are on vehicle. Yes, how many credits you have one million, then we we start trading must just, but just from there.

A

Gotcha, thank you so potentially this is what makes the the price fluctuate right. So if a project- let's say agricultural forestry, another land use, I don't know mate but example, but if a project is more expensive to to execute, then that would drive the price up.

B

C

Not necessarily yeah.

A

So what I'm trying to to understand is how these companies price their tokens right. That's like! What's the fundamental value behind it,.

B

It's offer and uh demand yeah.

C

Supply and demand: that's basically it like. If a lot of companies like let's say you know, petrobras, which is the brazilian you know bp or petrochina if they want to buy your emissions, it's you know, tons and tons and tons of credit, and the price will definitely go go up in the wholesale market right, but at the same time, if a million people wants to offset you know their daily car, driving and and flights and etc.

C

That also drives the price up a lot right then, and we would have to to have many more projects issuing credits right. So um I I think, that's basically where we are. You know driving the curve here, it's bringing the access to the retail right, because if it's not a token, if it's not on the blockchain, that you have one button instant burn, that's not easy to buy and and neutralize right. I think that's.

B

Imagine you calling a project in amazon in forest and asking to buy 10 credits. It's they will not sell, they will say, look I'd only deal with 1 million units or something- and I I prefer microsoft and ita and and and how those guys from the projects they didn't have uh a way out from those big guys, because they were calling them and saying. Look, I I'm the only one buying carbon credits in the market right now or you can sell me by one dollar or two dollars or I will not buy.

B

I can call the other brush. What we are doing is we are trying to create a real market for the global commodity and give access to the normal people to buy carbon credits by one by one and then driving price up.

A

Nice, can you maybe give us an idea on the on the numbers, so the supply of tokens- I guess outstanding and also how many are burned per year.

B

Yeah right now we have one year old. We are one year old company. uh We did uh two million credits tokenization with which drives to a total supply of 40 million dollars less or more. But, as I said, we have 20 million carbon credits bought more to the feature to the field future on the projects they will certify more.

B

We did a contract with them and then once we start uh getting more uh attraction to the to the product, we will meet more doing this procedure, buying buying vehicle and then creating the token and as well. We are dealing with this uh big uh custodies from btc ethereum grayscale, one river talking with them to compensate their carbon footprint from btch and everything else and as well. We are going cell, blockchain is one of the investors and we are going to put carbon credits on their reserve.

B

They have btc die uh eth weight, eight uh 800 million dollars. We will be part of that reserve, so we are growing a lot. The numbers are not still too big for crypto, but I think we could grow a lot and then reach the point that we have plenty of liquidity on the market. Right now we have like 1 million dollars or between 500 000 and 1 million dollars of liquidity on the market, uni swap merchant, bitcoin and and other exchanges like probate.

B

We are talking with kraken and coinbase, but you guys can look at etherscan uh to our contract. We have 2 million tokens issued there.

A

Nice and I'm wondering on the process of buying them. If a company wants to buy them, do you tell them to go to uni swap or is it more like they call you and they they do it yeah.

B

B2B, it's more our uh sales team that approach the companies, but we are talking with small business. We are sponsoring flamingo in brazil. They have 50 50 million funds to create the the mindset of this asset, because not everybody know that they could have a hazard.

B

A value of reserve uh reserve, follow and uh help the environment and, at the same time hold the asset that will be good for the the people and our our world. So we are creating mindset. I would say during this year.

E

So where's the where's, the liquidity coming from dude, you said it's not a uni swap. uh Is that correct.

B

Yeah, we are uh creating some liquidity mining programs to guys to buy it, and then we are here awarding uh on ubisoft on sello and as well. We have our liquidity money to help the the community to put emissio, do mso2 to to trade there and on exchanges.

E

B

In the total supplies.

C

We are also like sorry to interrupt you, frank, but um you know we released it in mercado bitcoin in the beginning of the year. So it's been three months four months now. uh It was very, very interesting. This team it was the the the largest uh trading listing uh in the history of crypto in latin america, uh we're now trading around 14 15 million dollars a month and that there's a challenge that I think we're in the right path now to listing in the big exchanges right and we're not a pure crypto project.

C

So that's usually you know we don't have like the usual um kpis that they want and we're not paying for listings right. That's just off the table right, so we're aiming really and we're talking to the really the top tier exchanges um getting them to understand.

C

You know the the the goal and and how these help uh bringing new people to the crypto markets right because many of our buyers they're, not crypto people right, they're, they're, buying the token and they're the first time, they're interacting with crypto right, they're they're. You know installing mercado bitcoin wallet and buying the first token of their lives. Right because they're more into sustainability than crypto and investments right.

C

So I think there's these like this challenge that we're addressing now before we get listed in the big exchanges and having bigger markets as well, globally, right we're also starting to to have a global market team team. Now.

E

And I guess, as you look to expand, that I would imagine you're going to go to different countries right and how's.

A

E

Differ from say, uh the carbon market in uh in england compared to australia.

C

Yeah, I don't know I I guess the global global trend is really getting hot. You know, did all the the climate change uh trend and and the negotiations last week earth day and all that's impacting.

C

You know millennials and young people all around the world um for for us. I think we really need to understand um how we better talk. People and you know- crypto safety, tech, savvy people with people that wants to leverage technology and blockchain to buy.

C

You know things that they want to buy, that you know to to get exposure to things that they they value in their lives. I think that's that that's huge, but there's also like a lot of new roads to explore here. I don't know if I answered your question. I don't know that. That's where you want it to go.

E

Yeah, I know that that's fine, I mean I was just trying to see if there was difference um with carbon credits, if you're a company based you know in new zealand versus, uh I guess the us, but I'm not going to bring up the us. The.

A

Us is not part of the.

E

The uh treaty that was made right.

C

Yeah, so the point, I think I understand your point better now. um The point is um it's a global commodity right. If you buy one ton of carbon credits from a brazilian project or from an european project, um it's it's basically the same, given that the methodology is good right. Of course, you know, and and given that the the this the company that is certifying this, this credits is honest and and is doing good work right um so that I think that's uh evolving and we're trying to be with the best partners.

C

We can be right, we're doing everything we can to be a plus in everything we're doing like in the blockchain audits in ernestia and doing the the audit for the whole company in in norman nino, doing the processes auditing uh with vehicle, which is the global standard for the voluntary market.

C

So and- and you know who knows if, if there's better partners, let's get the better partners to on on board if we can be more of a marketplace and on board more projects and more, you know partners, I I think that's even better, and if companies understand that it doesn't doesn't matter where these projects are coming from, because they're good they're validated they are audited. I think that's good enough right cool. Thank you. Man welcome.

B

And for the regulated market, uh I would say they have very known: they know how they they work, but we we don't know what will happen happen for carbon credits around the globe. We have several companies trying to create a carbon credit uh market like in australia. We have double double rent and they are working on cello network, but we did choose ethereum for the global scale and the market we could reach. As.

A

Well, I have a couple questions from will uh he's one of our real world finance contributors, but I think he's in new zealand, so he's sleeping at this time, but he wrote the question for me and he said my concern is that there is only one source and two projects and to offset it's calculated by utilizing historical trends which are widely known to overestimate offsets.

A

I feel, like there's, also issues of self-selection bias with the logging company providing the offset. So I just worry in a voluntary market. If some certification gets lost, the market goes down and doesn't recover.

B

Yeah, I think it's a good point. Right now we chose the the global player, not a brazilian player, not a government player. We did not believe in our government and I think the auto regulated market, it's the best. We have right now and vera does in a global way. That's that's why we choose them and I I think uh the guy is right.

B

uh We would go from different sources and try to tokenize in the future different projects, but right now the best option we have is not from the brazilian government government and neither a a small player in brazil or they have a a fund called fund amazonia. We did not search projects there, because we believe the the this auto regulated market.

B

A

Sounds good and the second question he says the last concern I had, and I'm not sure if moss can probably give much input, is that some more sophisticated environmental groups buy credits and just sit on them as a means of using the free market to reach environmental goals. That's great, but I worried an actor planning to effectively remove credit from circulation at a loss could reduce their per unit cost by collateralizing the tokens with us with no intention to repay, which would leave us to rely upon the robust liquidation market for them.

B

I I think we guys from us could resell it and would be willing to buy back the tokens to give to the market again. If someone take dice on collateral and give them for, let's say we start 150 percent, we will have discounts and then uh we could buy it from the collateral debit position.

A

What I'm worried right now random is that there's not a lot of depth in the liquidity, for example, for uni swap. So if we were running this and and the price went down and we needed to liquidate one of the vaults uh so potentially any any keeper that's running, the liquidations would need to pretty much bid for this uh collateral type and make sure that they can cycle it, and that would mean selling it in the open market as as fast as possible and eventually going back to yeah to square one.

B

Yeah, but how many you guys think it's the necessity, let's say for liquidity on the market.

A

So for us it's it's a matter of, uh and I cannot speak for everyone right, but it's a matter of prioritizing and and what we want to do, of course, is to grow the the amount of diet. So that's that's a bit our our objective.

A

So, ideally, if a project comes to us and they have trillions of uh of value, then it means that we can potentially generate millions right because we're going to take a tiny piece of the market. If a project is smaller, um I mean we could do it, but it will mean that even if we success, even if we succeed, we're going to have less of an impact on the overall picture and- and it takes effort from from a lot of teams.

B

Yeah we can, there is a way we can start small and then grow.

B

uh uh And then grow the liquidity and then grow the vault.

A

So yeah, I'm I I'm a bit well. Maybe sad is not the word but disappointed that the real world finance team uh didn't make it. I don't think um because I don't know if this would be like, like users, that your ideas that the users would be the ones opening the vaults or or it would be- you opening a vault with your own credit, whether that's potentially I don't know it generates, um like malicious intentions. So I'm not sure what the mechanics would be.

B

No, no, I I'm saying to limit the the vault amount of tokens in terms of liquidity.

B

Let's say we just do until 500 thousand dollars or something like that. Then we start and then we grow as soon we get more liquidity on our markets. For mg2 token, then we can, let's say we can liquidate uh the position of 500 000 on the market on uni, swap on mercado, bitcoin or on other exchanges. Then we go through cracking or binance or something then we have more liquidity. Then then we could uh open the vault for more tokens.

A

Yeah yeah, so so what I'm saying is that, from what I saw in in, I think when uni swap that plus two percent minus two percent liquidity was around 36 36 000 uh dollars so potentially having half a million would be a risk because that's already two percent, which is quite a lot and then the three things well actually, four things that we need to do, but but the three main things it's one is the risk assessment that it's done by the risk team. Then the other one is a smart contracts assessment.

A

So they they see that the that the token is um or would not add a lot of risk and then there's the oracle assessment, which would uh check how the price is fed into into the maker protocol. So we we have an idea of the price at all moments.

A

So, as I was saying before those three things take some time and effort. So it's a matter of prioritizing it right.

B

Now perfect at least you guys know us, and uh once we reach more liquidity on the market uh yeah, it will be more, let's say, feasible, to to be bigger on or make a dao. But if it it's there a way that we could start, let's say smaller and then grow together with you. Guys would be nice.

A

Yeah, for sure I mean um I, I think that our our vision or well- maybe maybe not everyone- shares it, because it is a doubt after all, but it's to that. Every collateral should be accepted, maybe with different risk parameters right. uh So it's just a matter of of priorities and making sure that we're working on the same direction.

A

uh If, um if by any means you you manage to to produce this uh these documents that are needed uh that could help the process. But I don't want to like generate any kind of expectations, because eventually someone will need to review them. But, for example, if someone can produce the risk analysis and then the risk team can just say yeah. This looks good. That would make it much easier for the wrist team and reduce the overheads um same thing for smart contracts and oracles.

A

So, potentially someone in the community that has that um yeah the the skills to do it uh would like to help. Maybe it's something that that could happen and, as you were saying, the the dead ceiling could be set low to start uh with a lower risk and then increase it as the project grows.

B

Perfect perfect, if you guys can bring us the templates, we can look at and start working by, our team and our community to help that.

A

Yeah, that's! That's! uh That's good. Are there any questions from from anyone else.

E

I know we're at the top of the hour, but this one shouldn't be too long. um I'm just curious on your side is uh coming to make her that, basically, um you want that for increasing demand. Is that, like the primary reason you want to be accepted as a collateral.

B

Yeah, I think let's say we have carbon credits as a hazard value reserve. uh We could have bring them. I believe uh I personally believe that carbon credits price will grow up and then I could take dollars from that uh that asset and then I can live there and pay the interest, and then I I think we can have another utility for our product yeah, but maker dao has a name on that eu network and I think, would help us to create mindset around carbon credit as well.

C

I I I would add here that I value a lot of the expertise and the brilliant minds that are around maker. You know and the community, that's like all the questions here have been really solid and- and I I can tell that everyone is interested in in helping and getting mars, uh better and evolving the project, because you know everybody believes on the same purpose here.

C

um So if that that kind of exposure is amazing, right and and even for me, uh it doesn't change the market because I I don't think a lot of people would use mco2 as a collateral to he should die and whatever it would be like basically us and a few friends right, but I think the the the strength of a lot of minds think about the future of finance together is what's it's it's really in place here. You know, like the future, will not be based on dollars printed by a crazy central banker right.

C

So what will be based off? I think it would be amazing to be based off the turf.

C

Values that we have right and numbers things that we want to value. That's that's so for me, it's a kind of a an experiment or an mvp that if we can start to do a start to test and- and you know play around, I think that's amazing.

A

That's great so reyna and bernardo: what's the best way to get in touch with you, if someone wants to reach out or give you feedback or ask you something.

B

We are on the chat on maker dao and we are on the telegram as well of maker doll. We can talk there and you can find us on on telegram and if you want I, I will leave my email here on the chat and bernardo's, but whenever you guys want to make a doll forum or telegram or wherever uh just say hello, and that we were on the same uh for a presentation and we can start talk.

A

C

A

Television is bernardo.

C

Rq, so anybody can reach me there.

A

Right so anything else, you would like to say before closing the call.

B

No just thanks congrats on the project maker dao, it's very nice one of the first d5 projects we know on the theorem blockchain. uh I respect you guys a lot and it would be nice to be there as a global climate change initiative from maker dolls. Since we don't have one million dollars, but ten thousand dollars, it doesn't matter. We are there and uh we can start grow together and see we had.

B

We had a lot of uh very constructive uh ideas or feedback here to to think uh about the sourcing, the projects and everybody and and everything else. uh I I think we could be in the future, a dao of carbon credits. If we can create this two side sided network effect.

B

It would be very nice, but I I think this market has to be real, not to be only spots of market on brazil or and then we can create a a very nice thing to to create a value on preserving earth, not destroying or extracting gold from the earth for something that is not good for us for our kids for our for our our future. That's the idea.

A

Sounds great so.

C

A

And we'll see.

C