4.1 The Dual Foundation of the Carrot Ecosystem

The Carrot ecosystem is built on two smart contracts:

1. Tracer Smart Contract: This contract manages the Tracer token, a fixed supply ERC-20 token that supports governance. Token holders participate in votes (anti-sybil protection) related to the Carrot ecosystem: upgrading of contracts, granting licenses to endorsers, and possibly revoking them. As Carrots are minted, 1% are immediately sold to buy and burn Tracer tokens, forcing deflationary pressure on this governance token.

This in turn incentivizes Tracer token holders to make decisions that support the health and efficacy of the Carrot economy. This type of proportional contribution leverages the fractionable nature of Carrots.

1. Carrot Smart Contract: This is a unique smart contract that manages three types of tokens: non-fungible tokens (NFTs) for endorsers and projects, and fungible Carrot tokens that represent the actual carbon removal, a real-world asset (RWA). A decentralized model supports the delegation of limited minting authority to NFT holders. In particular, projects can mint their own Carrot fungible token, as they effectively remove carbon. This smart contract allows for batch transfers of tokens of different IDs in a single transaction. Such an infrastructure supports the creation of baskets of Carrot tokens with different project origins but similar grades.