What is Thallo?

Author: Hayley, Rob

Background

Today’s carbon markets are deeply flawed. They are inefficient, opaque, and full of intermediaries that capture value away from both the corporate buyers and the project developers who actually build the projects. Buyers (mostly in the Global North) find it difficult to identify quality projects, so they rely on brokers and intermediaries who take a huge margin. Sellers (mostly in the Global South) find it difficult to finance projects and determine a fair market price, so they often sell to brokers and intermediaries and lose out on profit that could be used to scale up their projects.

Introduction 

Thallo is building a blockchain-based exchange for businesses and individuals to purchase, trade and retire high quality carbon credits. Thallo aims to make the voluntary carbon markets fairer to carbon project developers, helping them capture more of the value chain from the high-quality projects they build. Thallo’s model also tackles the over-commoditization of carbon, allowing buyers to select the projects from which they would like to purchase carbon credits, based on their own filters. Thallo works similarly to any other marketplace or exchange within web3. Project developers or traders can list carbon credits they own, and then Thallo tokenizes credits on-chain through a two-way bridge. Once tokenized, these credits can be traded for speculation or retired as the buyer’s offsetting needs dictate. 

Unique project features

The first unique feature of Thallo is Programmable Carbon Credits. This feature allows Thallo to implement a royalty model that allows project developers to participate in the secondary market for high quality carbon credits. Each time a secondary transaction (a trade, rather than a retirement) occurs, royalties are paid to the developer. This aligns incentives, encouraging developers to deploy highly-sought after credits, which causes margins for royalties to increase in line with price, which in turn increases linearly with quality. High-quality credits, higher margins and prices, and increased velocity maximize passive income for carbon project developers, enabling more projects to be financed and more carbon to be removed.

Another unique feature of Thallo is Dynamic Pooling, which allows users to group - or “pool” - credits by their own preferences. This innovative approach helps maximize liquidity without compromising the underlying properties of the credits. Unlike many projects that pool similar credits to create liquidity, Thallo’s approach allows them to retain individual characteristics of the projects and allow buyers to be specific in the types of carbon offsets they want to buy, without sacrificing liquidity. 

Closing Statement 

Ultimately, Thallo aims to increase participation, fairness and transparency in the voluntary carbon market, as a way to help reduce the impacts of climate change that  are currently shaping the world. You can find more information at Thallo Linktree. 

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