Cryptocurrency has a severe energy issue. Proof-of-work crypto mining, like that of Bitcoin (CCC:BTC-USD), saps up copious amounts of energy. Moreover, each transaction on a network uses energy; when those transactions are coming in by the thousands every second, it adds up. Earlier this year, networks began making efforts to mitigate the toll cryptos inflict on the ecosystem; some moved from proof-of-work to the less energy intensive proof-of-stake, some pledged carbon neutrality, and some tokens popped up touting themselves as eco-friendly in some way or another. But there’s a new class of cryptos to buy that’s grabbing investors’ attention: carbon offset cryptocurrency.
Carbon offset tokens are built for use by individuals and corporations alike. On a fundamental level, these tokens mostly operate the same way; a corporation can conduct carbon-emitting business, but then they can buy offset cryptos to negate the negative effects. Carbon offset cryptos are minted through carbon-negative activity; when a network sees a metric ton of carbon removed from the atmosphere, it creates tokens that represent that. So when a company buys these tokens, they are supporting the carbon-negative activities and reducing the impact of their carbon-positive behaviors.
Carbon Offset Cryptos Are Controversial, But That Doesn’t Make Them a Bad Investment
Of course, these tokens are drawing their fair share of criticism. As they are largely still young as an industry, there is not much in the way of consensus regarding the minting of the tokens. Even still, some projects have turned out to be scams. It also catches flack for reducing activism to financialization — throwing money at a problem rather than reducing emissions oneself. Still though, it’s hard to not see carbon offsets as a lucrative investment; so long as companies continue using carbon offset credits to keep themselves at least carbon neutral, there is plenty of money to be made in this sector.
Many investors are wising up to this fact, including the well-known crypto bull and entrepreneur Mark Cuban. While crypto investors might be caught up on NFTs or the metaverse right now, Cuban’s recent Twitter thread is helping to shift the conversation more toward carbon offsets. Cuban says he’s quite bullish on carbon offsets, buying up plenty of them himself. More specifically, he revealed he buys $50,000 in carbon offsets every 10 days, verifying them and recording them to the blockchain.
Obviously, the asset class is quite polarizing. But, it’s hard to not notice when the likes of Cuban are massively buying up the assets. If you want to invest like Mark Cuban, you can check out these major players within the space:
- Moss Carbon Credit (CCC:MCO2-USD)
- Klima DAO (CCC:KLIMA-USD)
- Toucan Protocol: Base Carbon Tonne (CCC:BCT-USD)
Carbon Offset Cryptos to Buy: Moss Carbon Credit
Moss is an arbiter of carbon offsets and one of the most popular eco-friendly cryptos to buy for investors right now. The company aims particularly at saving the South American rainforest through its efforts.
Calling itself the first “truly global” carbon offset, Moss buys carbon credits from reputable environmental projects. In this sense, it aims to be the most credible carbon offset project; the network’s white paper shows its robust and diligent effort to certify the legitimacy of the organizations through which it obtains its carbon credits.
The network holds these credits in custody; when a corporation or an individual purchases MCO2 tokens, they are receiving crypto tokenized versions of these carbon credits. Each MCO2 purchased is equal to one metric ton of carbon that has been removed from the atmosphere. Through purchases of the tokens, the network claims to have sent $10 million in funding to Amazon rainforest conservation efforts.
The MCO2 token has had a volatile eight months since it launched. Initially listing at a price of about $17, prices continued to sink until September. Around this time, Winklevoss twin-led crypto exchange Gemini announced it would be listing MCO2. The accessibility created by the listing is helping to boost MCO2 back to these initial values. As of right now, the token is trading at $10, and it continues to move up with speed.
Klima DAO Gains Traction From Mark Cuban
Klima is an interesting pick as a carbon offset crypto. That’s because the network combines all of the draws of a carbon offset with a Decentralized Autonomous Organization (DAO). DAO networks are the most truly democratic of crypto plays; owning the KLIMA token gives one governance power. With this governance power, holders can vote on potential changes to the Klima network. Of course, the more one owns, the more governance they have, which adds an extra incentive to buy tokens on top of the offset.
The KLIMA token is making waves in the crypto community as it celebrates accumulating $100 million in carbon offset credits. This equates to above 9 million metric tons of carbon removed from the atmosphere. Klima developers say this aggressive acquisition of carbon credits is a move not only to make the planet greener but also to make the industry more profitable. The buying is meant to push prices upward to help incentivize corporations to take greater action by participating in carbon offset networks.
At less than one month old, Klima is much newer than Moss. However, with its explosive entry into the market, it is catching the admiration of Mark Cuban. Cuban says he wants to expand on his existing efforts within the carbon offset crypto space by participating in the Klima network. With Klima, he says the asset class stands at great chance to not just neutralize carbon emissions but to make emissions negative.
Carbon Offset Cryptos to Buy: Toucan Protocol
The Toucan Protocol is an interesting new token, and it’s one that’s very closely related to Klima. The two are actually partner networks, and both deal in the arbitration of carbon credits via Toucan’s Base Carbon Tonne token, or BCT.
Toucan is the protocol that Cuban is referencing when he says he is buying carbon credits and putting them on the blockchain. In this sense, Toucan is very different from Moss; users of the Klima/Toucan ecosystem can buy their very own carbon asset credits and have them verified and recorded on the Toucan ledger as BCT.
The network is creating pools of carbon offsets generated from users to mint BCT, but it doesn’t want the network to stop with simply having an inflationary token. Rather, it plans on expanding the capabilities of BCT beyond the Toucan network. According to the protocol’s white paper, the ultimate goal for BCT is to allow users to bridge the token and use it to participate in DeFi activities.
In Toucan’s perfect world, users will be able to bridge their BCT to other networks, where they could do things like stake the tokens for passive income. In this sense, Toucan’s vision is one of the most versatile, and one of the most appealing for those who want some extra utilities for their assets.
On the date of publication, Brenden Rearick did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
