5.7 Labelled Burning Ensures Single Retirement

Carrot implements a labeled burning mechanism for retiring carbon removal credits. This ensures that tokens are retired for a single purpose and therefore precludes double-retirement.

Dedicated but freely deployable smart contracts, called “Retirement Rabbits”, collect Carrots retired by anyone for the same purpose. This could be it a personal carbon compensation, a specific carbon registry, a publicly available carbon offsetting score a company wants to promote or an organization raising awareness.

By attaching a URL (or an email) to the Rabbit smart contract, one can easily provide any website visitor with a way to verify on-chain any specific climate restoration claim: the website URL can be read in the rabbit, with its associated cumulated retired Carrots.

Transferring Carrots to Rabbit smart contracts functions similarly to burning them (sending to address 0), which prevents any further transfer or sale, making it their final destination. The smart contract includes mechanisms to track the total value and relevant statistics.

Carrot token retirement depletes circulation for any project, therefore the circulating supply of any token grows to a maximum and then drops to zero over time. This erosion of liquidity would be an obstacle to price discovery if tokens were not grouped by grade.