Tokenomics
$CARROT is a multi-stakeholder network where environmental value is created by recycling contributors working together to divert “waste” from landfills, incinerators and the environment, and instead send these rich resources to recycling and composting facilities. The environmental value is captured through proof-of-physical-work, proof-of-provenance and certified-recycling (recorded in MassIDs), and tokenized into Recycling Credits (TRCs) and Carbon Credits (TCCs) which in turn are sold to companies needing to offset their negative externalities, in other words, their waste and carbon footprints. (As noted extensively throughout this White Paper, waste and carbon disclosure requirements are inevitable and long overdue. We understand that some of the cost to Producers will be passed onto consumers in the short-term and see this as an unavoidable part of the transition. In time, however, as infrastructure and investment are put in place the marginal costs should trend to zero, and then beyond, producing significant savings as most of the current costs are removed from the system.)
TRCs and TCCs in essence provide price discovery on the value of recycling each material waste type and offsetting both waste and carbon on a per ton basis. Price discovery can galvanize the world to ensure that markets are operating efficiently, waste actually gets recycled and that we are all moving together toward a Zero Waste world.
$CARROT distribution from the sale of TRCs and TCCs to recyclers efficiently allocates capital to the participants in the recycling economy, providing an important new revenue stream that can be used to reinvest in the equipment and technologies that are needed to improve recycling rates. The direct distribution of the value generated to each participant, free from intermediaries and in accordance with each participant's contribution, changes the entire dynamic of the market and opens the door for greater participation and competition thanks to the incentive mechanism designed into $CARROT Distribution (which, can be adjusted by the Carrot DAO community to optimize recycling performance to each locality).
The following diagram shows the Carrot Fndn's Token Economy design, combining MassIDs (in blue), TRCs/TCCs (in green) and $CARROT (in orange). For more detail on the value delivered to each stakeholder see section on value proposition.
Recycling is a key component to a sustainable global economy and its value can be captured consistently and indefinitely.
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