Planetary Regeneration with Gregory Landua of Regen Network

Transcript

we're live my guest today is Greg landua he is the founder of region Network and the only person in the world who gives me mustache Envy today we're diving into regen Network one of the earliest projects in Cosmos we'll talk about the NCT token which is a neutral cover task token neutral covered ton token how it works provides useful whether carbon offsetting is effective in curbing climate change also we'll talk about region 5.0 and the recent upgrade public good funding and a lot more I'm also dying to find out why he thinks that blockchains don't eliminate the need for people and why he's increasingly bearish on the cause of foods ecosystem before we get started make sure to hit the like

button hit the notification Bell And subscribe to get notified when I go live every week and remember that none of what we discussed here on the interop is investment device and if you enjoy this content please consider staking or moving your delegations to inter my long-term goal at the podcast here is to not take sponsorship and staking with us is part of building a sustainable business model we're live on evmos Quicksilver and I'm very excited to announce that we made it into the osmosis and Juno active set this week and we need your delegations to keep moving up the ranking so please take with us just look for interrupt in the active validator set my guest Gregory Landing is coming up next right here on the internet foreign

foreign [Music] Gregory how's it going man I just need to have mute oh right mute yeah good to see you man how's it going um pretty good pretty good uh it's good to have you on uh finally uh great to be here we did an epicenter episode a couple of months ago and you know that was the first time you had been on epicenter and so yeah I think a lot of people are familiar with regen uh I I don't want to go into like you know what is regen and everything here I think we can kind of keep this up keep it kind of

summary if people are interested in diving a little bit deeper into the history of regen and and the mission and everything they can go and listen to that episode I want to talk here about um well I I want to talk about this recent upgrade because there's a lot of technical bits in there that are really interesting and also interesting in terms of you know moving uh moving the cosmos ecosystem forward in terms of governance and uh and you know there's there's a ton of uh interesting Dao ideas in there as well uh governance proposal Etc so like I want to talk about that um also discussing this neutral covering time there's been a little bit of you know skepticism uh recently about carbon credits so getting your thoughts

on that too and then yeah uh I think there's other things we can discuss like public goods funding which is another big topic right now so um but yeah briefly just for those who are not familiar with you if there are people out there who are not familiar with you please uh just give us a brief introduction yeah well so um super excited to be here um I'm one of the founders of regen Network um I think we were the second blockchain in the cosmos ecosystem to enable IBC um so right after the Hub did maybe the third but we were right there at that moment um and at that time

um we built a lot of a lot of the core have been participating and building a lot of core infrastructure my background is actually more on the ecology and environmental science side of things so I've been working in regenerative agriculture um and supply chain work certification work and carbon markets for gosh I mean essentially my whole Adult Career uh so since 20 to like 2004 or something what how what I guess we're coming up I'm getting old it's coming up on two decades um and region Network yeah and region Network um we we built region Network and and continued to evolve regen Network really to fill a core Gap in the institutional

and infrastructure uh needs for appropriately coordinating action on climate um valuing ecological resilience and regeneration these are sort of really Core Concepts to a functional economy and a functional Society they also happen to be massive profit centers for you know it's it this is going to be a multi-trillion dollar per year business the natural capital and climate space and so it's sort of both serves this Mission and existential need it also happens to be a burgeoning and vibrant Economic Opportunity yeah I mean I think within Cosmos and

probably even like broader into the broader crypto space uh you you've been I think one of the leaders in leveraging blockchains to create a market uh that incentivizes you know companies and people to be carbon neutral like can you explain for for those who don't know and I I'm certainly I certainly consider myself kind of not super well versed in carbon credits uh like what's what's a carbon credit what's it for and what's the goal of the carbon credit system sure and this is a complex subject so I'll sort of do a superficial

overview of things and then maybe we can get into some of the complexity um later if it makes sense but just broadly speaking um carbon credits are a commodity right from a sort of like what are they perspective that are used to balance the um carbon Budget on a balance sheet of a company um increasingly right and so the value of carbon credits comes from the fact that in in 2023 it is now consensus amongst business and regulated regulatory agencies that carbon

emissions should be considered a liability for companies meaning it's a cost because every carbon emission that is emitted every every you know ton of carbon that's emitted out in the atmosphere has a societal cost and creates risk for the very company that's emitting it right and so this is complex but there's increasingly there's about 20 years of work going into quantifying how much that cost is and how to sort of pay for it and there's different schools of thought about how to pay for those costs right some people would like to just regulate it or tax it right and other people would like a free market

mechanism like a carbon Market where you you actually sort of like pay for offsets and so interestingly enough you know Carbon markets by conception are quite a they're a market driven approach to dealing with this negative externality while also incentivizing positive externality so it's a it's a mechanism to fund public goods and um and fund the amelioration of public bads I guess you could say negative externalities any in the economics lingo um so essentially again to sort of recap app there are there's sort of carbon liability that um

companies accrue by emitting carbon generally that is tracked according to commitments that companies make the recent sort of like World coordination process was in Paris right and so people talk about the Paris Accords that happened in what was it now 20 20 2019 Paris 2019. I think it was right before Kobe I think so yeah and everybody came together and basically said hey we want to have a global economy that is carbon neutral by 2050 meaning we're capable of sequestering or pulling or or you know are in-breath and

our out breath of carbon in the global economy is balanced by 2050. and in order to do that every industry and every business and every company made a set of commitments those commitments are encoded into sort of scientific baselines right which then allow you to calibrate how much you need to offset if you're a big corporate or if you're a blockchain protocol or if you're an individual so it's a it's an incentive mechanism essentially is what you're saying so it it incentivizes businesses and you know also also people to some extent since you know people you know choose with their dollars which businesses they deal with they they want

to conduct business with it incentivizes businesses to limit their uh their carbon emissions um through the acquisition of these credits uh now it puts a cost on carbon emissions and therefore a positive value on carbon sequestration and avoided emissions and that then incentivizes businesses to reduce their emissions by to be smarter to choose more energy efficient manufacturing or Transportation options because it costs them money if they're inefficient right so and so it creates a price to balance this thing which we all

need which is a healthy biosphere and sort of a balanced carbon cycle so when considering the the cost of carbon so I uh yeah what what are What are the what goes into considering the cost of a carbon unit or like a carbon ton in the case of this nature carbon ton token that yeah well this is a whole world you know um so there's the social cost of carbon where people calculate the damage that's done through uh climate change which you

know increases the frequency and magnitude of large storms for instance um or um you know increases the cost of air conditioning or increases there's all these costs that increases the number of flooding events these sorts of things and um so that social cost of carbon is that different people come up with different numbers right so there's a quantitative process to sort of add up the cost is generally between 100 and 150 a ton this can is sort of considered and that's like an academic exercise that's not supply and demand necessarily that's

like the social cost that's been calculated um generally speaking markets operate by supply and demand right so so we might have a value but value is not always connected to what the price of something is so um currently price Discovery in the market is how much demand there is versus how much Supply there is um so there's different market segments there's compliance markets like the European Union right so the European Union has a compliance Market where all they have like they manage uh a you know there's Regulatory and government oversight around the carbon markets and

every company has sort of their allocation and they have to balance that on the carbon Market I we could check we could Google it really quick generally like last year at the peak of car carbon fever when everybody was like wow this is going to be big it was over a hundred dollars so it's like somewhere around 95 Euros uh per ton over in Europe and and it you know it's somewhere between 50 and 100 euros per ton in Europe at any given moment that's the trading range for carbon um due to supply and demand factors um then there is the voluntary carbon market and that voluntary carbon Market has a much broader

price range so the price range in the voluntary carbon Market is from like two dollars a ton up to like a thousand dollars a ton it's a it's a giant um and then there's sort of projections about if every company that has pledged carbon neutrality and is signed up to these commitments um and if the SEC follows through with its Regulatory Compliance for public companies and if and if all these things that have happened continue to happen there's this demand curve that has been projected that demand curve essentially says that the price of carbon is going to move up upwards towards a hundred and fifty dollars per ton by about 20 30.

um just due to demand pressure because of how much Supply there is how much demand there is and that's the that's like World Bank and World economic forum and other and McKinsey like think tanks who are trying to look at data and judge and place a price point based on the supply and demand not and again not the social costs like not how much damage the carbon emissions do if they're not um mitigated but how much just like demand there is versus Supply and what that does to the price I see and so what one of the things that I remember from our conversation last time on epicenter that maybe I'd like to revisit here is the fungibility of of carbon credits

if you look at other Commodities things like gold things like you know food commodities there's a I think for most Commodities there's probably a fairly standardized um system for grading Commodities so you may have you know I think gold is probably fairly standard right gold is gold and there's like a a a threshold um yeah like yeah exactly how pure the gold is um and then right away so there's like two Dimensions how much does it weigh and how pure is it and and then so there you can say okay

like the uh an ounce of gold that that adheres to this standard is where it's worth this much and that's measurable and it's it's you can you can measure that and test for it in the case of uh carbon credit it it feels to me like the [Music] the effectiveness of one initiative through reduced carbon versus another uh and in all of the different ways in which one could try to reduce their carbon footprint is fairly varied how does the market account for these variations and what are some of the

unintended consequences of like this you know this effective non-fungibility of carbon credits on actually reducing carbon you're muted again sorry about that that's a fantastic question and it's really the core question a lot of ways that region network is being built to answer right how do you grade and sort and allow discoverability price discoverability in a rational and logical way according to a set of quality for carbon is one of the primary functions that region network is aiming to provide to the marketplace so

um there's different ways I could answer this um but I want to start by just like outlining the different candidates and like this is still very early days for this market so there isn't consensus about like what the market is going to choose to grade carbon right um complete consensus at least there's there there are arguments and there's still sort of like there's competition to see what this is going to actually end up being right so just to like put that out there um okay so step one um one of the primary well so taking a step back there's two

Dimensions to think about one is the scientific certainty about the claim that's being made that's one dimension of quality how certain are we and it costs more money to be more certain and you see this to some degree with like gold even right you know if you you have things that are assayed and certified and third parties have weighed right you have a high degree of certainty that you're getting what you say versus like you know you bite it and you're like yeah it tastes like gold it feels about right okay that feels like it's about an ounce and it you know has it right so you can see like the more effort you put in the more inter subjective

verification the more different people attest to the veracity of something the more sure you get so that is true also in just normal commodity markets but it's extra true in carbon markets because carbon is a odorless tasteless gas when it's it's diffused in the atmosphere when it's in the form that we're trying to mitigate and and remove and put into forests or soil or carbon removal projects so um so you need a lot more sophisticated methods to verify a claim related to carbon so that's number one so the First Dimension is

just like rigor and quality of of the science behind the claim and we can get in like we can dig into the the sub attributes of that the other attribute is and I like to put these on like a x y axis and you know think of them as you know there's like there's like scientific quality and then there's impact quality like how how if this carbon is in a rain forest for instance and it's being stored in a rainforest how many other benefits and services is it giving us right um so how charismatic is it how powerful what's the public goods story that's being brought into the marketplace by

this and so you have that x y axis and generally speaking that's sort of like the carbon price Discovery access right and then you can dig into that and there's differences of opinion about quality public goods like different people want different things maybe some people want a healthy agricultural system maybe some people want Forest conservation maybe some people want it to be completely a machine world and they want giant machines that suck carbon out of the atmosphere you know people have different preferences and so therefore that that relays into the the marketplace and then there's a scientific rigor okay now let's let's let's like dissemble that pattern into some of its component parts so this is

going to be a little jargony I'll try to say a term and then unpack what that term means generally speaking so um concern quality concern number one is durability or permanence that those two words are interchanged and even in the marketplace that's how long is the carbon in question going to be sequestered and stored out of the atmosphere right and in some like in an agriculture carbon credit the durability and per and or permanence is fairly low because it's a shorter carbon cycle like because soils naturally breathe and they have a tighter relationship between then for

instance like um turning it into biochar or even a forestry project that carbon Cycles a little bit longer right okay so so durability and permanence that's that's a that's a prime concern and for some people it's the highest concern the second is what is generally called additionality an additionality is how sure are we that this wouldn't have happened through other means that it required a market and a price in order to do it right um or another definition of additionality depending on you know the market preference is how sure are we that the action that we're funding is

responsible for the outcome right that's additionality is there a tight linkage between the fact that I pay I have this contract with this farmer and this carbon was sequestered right um which is independent of are we sure and then there's how sure are we right about the claim right um so that's the certainty so we have um permanence additionality certainty and then there's a term called leakage which is um can we be sure that this project sequestering carbon didn't make someone else emit carbon somewhere else due to like a second order effect where it's

like oh I put in you know I preserved this Forest but they just chopped that Forest down over there so it's the the net carbon impact was the same so you can see those are fairly complex and they require sort of like uh an observation and surveillance apparatus that's quite sophisticated to be able to both uh you know and a contract apparatus it's fairly sophisticated because you're making multi-party contracts about a particular place and you're trying to observe these multiple dimensions in order to generate that value so um I'll pause see what questions it seems like it seems like what you're saying is that these Assets

in order to be priced accurately have various axes of scientific but also Maybe some amount of subjective uh qualities that allowed yeah that allow them to be priced accurately how effective can we how effective can we hope that these assets are actually priced in and how confident can we be that these methods of measurement are are accurately representing the the

carbon that a specific credit is offsetting and and I think what's really at stake here is the legitimacy of carbon credits as an effective as an effective way to offset carbon I guess the subtext of my question is how much of this is greenwashing and how much is actually you know actually doing good for for the future of the planet yeah um it's a totally valid question I think so the answer to the you know so so like they not they

answer the subjects but the answer to the sort of specifics that you were asking about so um there's two ways that we try to address uncertainty related to claims one is to be transparent with the market about the level of uncertainty because markets are good like people people aren't certain about lots of things we that's we have insurance we have all of these different cool Financial mechanisms that are built to deal with uncertainty markets are uncertain the life is uncertain everything is uncertain this is no different

um what's important is that you're transparent with the level of uncertainty right and that there's a process to improve the Precision and accuracy over time right so what's what's what's important is that we have a clear process to improve the level of certainty associated with claims over time and that we're accurately representing the level of certain that we have right now okay so that's number one and that's true with anything like any Financial instrument any stock any everything a hundred percent of anything that anybody ever buys has a level of uncertainty and this is what I think doesn't get sort of like we don't wrap

our head around everything everything you know the FED interest rate the everything is like foggy and you know we have to figure we have to calibrate and actually dealing with uncertainty is What markets are great for that this is the magical thing of of like a market approach to something whereas if we were trying to create a bureaucratic approach right and this is like this is the interesting thing so okay we can have two different conversations we could have is I don't know we could say oh is climate change even a thing and is carbon even a problem is should we even deal with this I don't really want to go into that right I think like I'm starting with the premise that we have consensus that you

know yeah that we have enough certainty but but like look there is uncertainty related to everything right yeah I guess that the the issue that I I see here and I haven't given much thought to this I'm sort of thinking out loud here but that yeah it is there is a market approach and markets are great with dealing with uncertainty I agree with those statements the the thing is that carbon credits and the incentivization to leverage carbon credits has been at least in Europe uh widely incentivized by policy I think is accurate right so so in Europe that's

true which is not true in the United States right which is which is not true in the United States carbon markets in the United States happen almost independently of any public policy although the policy will come later because that's how things work in the states is that the market drives the policy instead of the policy driving the market yeah so from a European perspective I've I've mostly uh been skeptical of of carbon credits and and the incentivizations mechanisms because they've been driven by government by by governments and by the EU and I don't trust those institutions to make the best decisions I think there's

historical precedent there um and then the broader question that I've started considering here is to what extent does to what extent has the policies around incentivizing carbon emission reduction through carbon credits perhaps been an accelerator of you know the the what I think is you know a looming energy crisis in Europe and perhaps across the world and you know to be more specific there is has government policy around you know uh ESG Etc

uh really accelerated not taking into account the kind of blocks one event which was like a you know a hot war in Ukraine and um in the context of reducing investments in um in um in in uh and um nuclear reducing investments in fossil fuel um uh uh research Etc to what extent are are are these policies maybe responsible for um putting us in a tight squeeze in terms of our access to cheap and affordable energy something you've given some talk to no way okay I mean I would say there's zero

moving on so so there's two there's just a lot of different things so different people have different opinions about nuclear for instance but broadly speaking nuclear is is a low carbon energy source so if what you're aiming to do is to decarbonize your grid um you know you you would probably choose nuclear right over Russian gas for instance so that's a different there's a different argument however there's a different arguments I'm sitting here in Germany right now and uh you know I was I was having a chat with my father-in-law yesterday talking about his energy to Bill that that's you know more than done but but Germany nuclear and that wasn't driven by

so so there's two different things going on one is if you place a price on carbon and you say as a society we want to decarbonize our energy grid for instance um that's good for creating resilience against you know Petro real politic and geopolitical like like there's actually a complete alignment between placing a like dealing with the reality of the like the thermodynamic and geophysical reality of carbon Cycles right and the geopolitical reality of bullies and War there's a complete

alignment between those two things okay sometimes there's other political challenges like oh we don't want to deal with this or we want to deal with that or other their special interests democracies messy things get but in no way is dealing with like creating a uh like a healthy carbon cycle for our economy at odds with also your that creates resilience and Independence in a global world of you know control over energy resources that's what that does so I I would say they're actually like line up really well and that the static and the confusion that's happening in Europe is due to other things not you

know and like Russia or whoever will you know it's like all of a sudden being anti-nuclear becomes this Anonymous with being like Pro you know I guess healthy climate or something but that mimetic like we have to look a layer deeper there's propaganda there's memetic Warfare there's all sorts of things going on which are trying to confuse and Cloud the decision-making process I can't comment on all of that but you know I don't think sort of like having a carbon Market in any way you know undermines um sane energy policy I guess yeah I think then it's probably it's

probably safer than to disassociate the carbon market and the policy um yeah yeah I mean the the I I do believe it is the policies that have led us to uh to the situation that we're in in Europe but policies are complicated thing right different people Lobby for different policies and it's not like a unified thing so people are people want to you know like but yeah like how do we know how do you know that Russia didn't fund all of the and all the nuclear decommissioned campaigns in Germany just curious possible yeah I mean I would say the

likelihood they put money into that is nearly a hundred percent yeah why because they benefit they profit from it it's just like you just follow the money and you'll find out why something exists that way so someone needs to look behind Greenpeace hahaha right but but and green pieces Greenpeace does amazing work in the world but they're also like super you know they have their perspective you can disagree or agree sometimes they're on the right side sometimes they're on the wrong side you know where are they getting money where is it getting funneled from you know it's all pretty complicated so I want to get out of the complicated thing and get back to sort of like there's uncomplicated parts of this which are

you know for instance like let's get back to crypto okay there's a very linear and clear relationship between what we're doing and the value that a protocol like osmosis for instance um has in the marketplace so there's a huge so so the growth of our industry requires new people to come in and engage with the functionality um and for the industry to grow as a whole then you know with that influx of new energy and new talent and New Capital you know are we have a healthier industry we have a healthier ecosystem that's that's the basic dynamic now there's a lot of people who don't

want to engage with crypto because they have concerns about energy usage and you know like we can unpack what about that is rational and what about that is irrational uh we can have this different conversation I'm just stating that that's a that's a big thing for a lot of people right yeah I mean it is it is a thing that is mostly I mean for most blockchains uh you know it an irrational uh concern um I think um well I think we would agree I would say it's a completely rational concern that gets blown out of proportion and is

misunderstood that's what I would say I'd say it's a completely rational concern because everything that we do has a we're beings of carbon you know running running computers of silicon that require usually carbon energy in order to keep them running and in order for us to have the conditions for health and wealth and success we need to like not in our own nest essentially right you you have to keep the conditions for your welfare good it's just like as if you know if you had a you know what let's see like if if you

are running it's like if you're running if you're running a generator in your basement right and it's filling your house up with carbon monoxide you have to take some action to make that go somewhere else well there is no somewhere else on planet Earth so every blockchain and every business and every human has we have to coordinate to figure out how to not just be exhausting our planet like that's a thermodynamic geophysical reality for in order for us to have economic activity right like we require Healthy Planet for economic activity and of course wait and so let me finish this up so the degree

to which a protocol can say you can engage with us and we deal with all of that problem and we give you money you become more competitive in the marketplace it's that simple it's a competitive advantage to to efficiently deal with that because guess what people aren't dumb and they do realize that there is a rational concern there now like again it gets blown out and people have different interests and it becomes this distorted this reality Distortion field but there's like a core like rational logic there which is the more efficient and effective we are as business people or as blockchain protocols or as

communities dealing with this core existential challenge the more attractive we are to new people who are thoughtful and engaged and have money and want to come and do business with us right it just creates a healthier more Dynamic Marketplace essentially so what so tell me about this uh this uh nature carbon ton token that uh I think will go live we'll be on osmosis next month yeah you hopefully we'll be live in March it looks like everything's uh lining up it's been it's been a long winding road to get everything all together it's more of an interoperability issue than anything else we can talk about that decide so

nature carbon time is like this first generation tokenized carbon credit um that that allows um businesses and protocols to offset their carbon footprint or to or to engage in speculation that more and more people are going to want to offset their footprint and that this as sort of like a you know as a business opportunity is going to grow so it has the it has two different forms of utility there um so NCT um as a first generation token as carbon credits is sort of their legacy carbon credits that are coming off of the the sort of largest and most well-renowned

verification body for voluntary carbon credits which is Vera these were tokenized by toucan which is a tokenization protocol and we helped co-create some of the standards about what got into that sort of basket so talking about like what's fungible what's not we helped in we leaned in with a body of other actors helped set those standards and now NCT is being bridged over from polygon into the region Marketplace and then people can do what's called basketing it and that turns it into a fungible IBC token which then allows it to move to osmosis and we can talk there's a really cool thing happening in this partnership between region Network and osmosis to build the liquidity pool and sort of create access

to this carbon credit to be offsetting protocols and to be bundled into all sorts of other things because it's really kind of the fuel for the regenerative Finance economy I would say so yeah let's talk about that partnership and also I'm curious what are some of the technical you mentioned there were some improbability issues uh because I believe this is a standard that you guys have built and you've built some custom SDK modules uh around this uh this this this new token type I think um yeah can you talk about that yeah well so we built the Eco credit module which is a token standard that runs on regen Ledger

um and we basically had to reconcile our both IBC token standards and Eco credit token standards with a um polygon like erc20 token standard and the the interoperability challenge here is that this isn't just an erc20 token these tokens have sort of like a payload of metadata and functionality that has to go with the token because it has to be able to be retired you have to keep track of who bought the token and then retired it to actually have the system work so message passing and more sophisticated Bridge stuff is is required and so we had to build that out

basically to be able to create this interchain interoperability to a level that other people haven't yet you know that that use case hasn't been top of mind for a lot of the bridge folks so um we worked in tandem with toucan to build a custom bridge between their smart contracts on polygon um and cello and our blockchain so that there is sort of like this ability to flow this particular token standard back and forth and make sure that the accounting is square wherever the tokens go in terms of retirement and issuance and other things um so and then once it gets to us what's cool is then it's IBC and it can go

anywhere so we have amazing things happening over on evmos really cool things happening on stargaze and this exciting launch on osmosis and so the launch on osmosis sort of a protocol the protocol partnership which is very exciting so the osmosis Community voted to pre-buy I think like a five-year supply of carbon offsets right and then do liquidity provision so they're offsetting and then they're doing liquidity provision and then there's sort of a constant purchase price and then there's other um stargaze and other folks have voted to do offsetting so you can start to gauge the demand and we can create liquidity with real utility that's creating this sort of internal carbon

offsetting economy um so that protocols again are climate positive carbon negative and this is sort of like this first generation um carbon Credit in the IVC World um yeah and it's launching in March which is super exciting um I think there's going to be about 300 if I'm not mistaken there's going to be about 300 000 tons of liquidity um which represents something like you know so a an average protocol depending on how you how many compute nodes are running and how far you take the carbon accounting is going to use between five and ten thousand

tons a year um to run it to run itself um so um you can kind of get a sense of sort of like the demand Dynamics and the liquidity Dynamics that's getting bootstrapped and sort of Spun up um through this launch so the osmosis chain through a governance proposal bought 300 000 tons of uh it's about 150 it was it was less than that there's also other liquidity right like regen is providing liquidity other folks are I think in total it's around 300 000 times okay so so they're so effectively there's going to be a

liquidity pool on osmosis that is that represents about 300 000 tons of carbon yeah um what are yeah what are the kinds of things that token holders can do with these tokens and how how is it offsetting uh carbon like how is it helping offset carbon emissions yeah so each one of these tokens represents a ton of carbon that has been verified to be uh stored right and according to these standards so the utility of the carbon is you basically you retire it so you render it non-tradable

and you retire to a specific address and then that address can sort of claim carbon neutrality according to you know the number of carbon tons that it's required um you know related to their carbon emissions budget right so the core utility here is as again and it's a little bit of a clumsy term but it's as a commodity right and there's as we were talking there's all these ways that it's not really a commodity but it's use meaning it's like grain where its utility is to turn it into bread not just to have it right and the same is true with carbon the the utility of the NCT and the other carbon credits that are coming online

which we should talk about the region native carbon credits which are coming online which is really exciting um we should talk a little bit about that but the utility is really to to buy it and retire it like it's it's use it its use is its core utility okay so so so this retiring of the of the credit means that especially you can't you can't like buy a carbon credit and be like in fact you're like long long time of course but then you're speculating that someone else wants to buy it and retire it okay or if someone else wants to speculate on the fact that somebody else

wants to buy it and retire it but it has a use like what I'm just saying is there's this utility and that utility is to create is to actually retire it and take it out of circulation and to use it once it's been used otherwise the carbon counting scheme wouldn't work right if you can trade it after you count your like like I can't be like oh I bought this carbon credit so I'm carbon neutral and I'm going to sell it to you and then you can be carbon into two it doesn't right if I if I'm making a claim I take that carbon out of circulation and then it's out of circulation so it's used on a you know regular basis I see right um yeah tell me about this other uh carbon token this region well

region is built to allow people to manage the minting process of carbon credits and other Eco credits biodiversity there's a whole burgeoning Marketplace that assigns value to conservation and regeneration outcomes and again this is a giant industry that's in its formation phases um that is enabled and fueled by blockchain right but this is independent of this is independent of the blockchain world that this you know this whole thing is happening billions like just to contextualize the global carbon markets right now you know the full Global carbon markets voluntary carbon market last year was about uh two billion

dollars and it grew it doubles from the year before and the year before that it was it grew 30 so it's in this like very rapid growth phase the full Global carbon markets which includes compliance markets from around 300 billion dollars um payment for ecosystem Services where people where there's there's payment for specific ecological stewardship that's taking place somewhere that uh stakeholder needs somewhere around 40 billion dollars a year um so these are you know and and these markets are set to grow to two to five trillion dollars a year over between now and 2030 2035 so it's very fast ramp up

that's taking place lots of activity lots of investment activity even in this bear Market in quotes So um what region network does is it allows people to come together and create a credit minting standard right where you say this is how we're going to measure this is what we're going to measure how we're going to measure it how we're going to answer additionality durability leakage permanence if you're in the case of carbon credits or in the case of biodiversity credits or other credit forms you'll have different criteria that you're answering so we have a registry system that allows you to govern credit minting standards and then follow those credit minting standards on chain and result in a fully transparent

Digital auditable Credit and that's what that's the functionality regen network has that's our core utility as a network right and our our state machine our our governance is built around securing and um and giving that functionality to a community and allowing that Community to govern those crediting standards efficiently and that's a that's sort of like using a public blockchain as a um governance Network and registry system and and Marketplace for these types of credits is really quite transformative because it creates this vertically integrated application specific blockchain that allows us to

disintermediate huge parts of the market so if we get back into like carbon credit markets as they exist right now they're really inefficient it's there's a lot of middlemen in between a buyer and a seller it's very hard to do price Discovery um it's very hard to know exactly what you're getting and by integrating a registry system with a Marketplace we really disintermediate that so you know exactly what you're getting it's efficient to to like mint and go through the process and then you can actually set the foundation for this efficient price Discovery we know what we're getting and why we're getting it and just like really transform that industry

and build it on solid footing one of the other things that's very exciting about how we've approached things at Region network is stakeholder governance so traditionally a market like this may end up getting captured by demand that makes sense like it's like the people with the money end up capturing the full marketplace well in this case we actually have land stewards and Indigenous people and scientists participating in governing and owning the network alongside the buyers and the corporates and the verifiers in these other bodies so there's like a co-ownership of the marketplace and the platform which generates the legitimacy the transparency the efficiency and the trust that the market requires to

actually work and to generate the outcome at the end of the day the outcome needs to be that the that the unit that you buy clearly and directly represents the impact that it says it does right that's the core question right that's the core question and any of the challenges and confidence that the marketplace has around that undermine the value of the that unit for sure so that's kind of you know region Network's focus and circling back to NCT you know NCT is this first generation liquidity launch of the best possible in this moment carbon credits right and then there's this next generation and I

just mentioned we've built this functionality on chain we've built a whole community so there's more than 40 different groups innovating their own credit classes right now going through governance and science it's a that's a giant undertaking like just people should understand there's a huge amount of science research development and Community power going into what's taking place six of those credit classes are coming over the next two quarters into regions Marketplace so there's culson carbon trust which is biochar credits there's uh Roots holistic management uh soil carbon credits there are um environmental stewardship credits

coming online there's Jaguar biodiversity credits coming online there's uh European uh regenerative agriculture credits coming online higher quality more assuredness than the compliance market and a lot of these are getting pre-bought like some of these credits you can't get like they won't even make it to the marketplace people are just going to buy them before they come on chain um so that's sort of like the real excitement is as we get to this next generation of carbon credits um and somebody asked what does the region token do region token secures the application specific blockchain so region token is uh is really focused on governing and securing a proof-of-stake

blockchain so it's a proof of stake token and its primary utility is security and governance of the core utility right so up any software upgrades and other things we haven't gotten to talk about I mean we sort of went in a little circle around the carbon Market questions but we haven't gotten talked so much about region Ledger 5.0 and sort of governance yeah we can also dig into sort of you know tokenomics but the high level takeaway for folks is that that currently the tokenomics of regen Ledger are a pretty standard proof of stake token economics right yeah um for that to evolve in the future like yeah let's let's talk for sure

and we can talk about Regional 5.0 yeah a hundred percent there's active conversations in in Commonwealth right now about um upgrading the token economics um I'm kind of a token economics um I'm I'm a bit conservative about token economics upgrades meaning um I want to see I want to see an engineer upgrade to the Token economics that are not contrived and directly benefit the utility that the network is creating um so you know I think an engineering token

economics upgrades is is complex so I think I'm of the opinion is something that we evolve slowly and this is what we outlined in the white paper and the token economics paper there's a technical token economics paper that sort of charted the forward pathway but also talked about the choice of using just a standard proof of stake and why and some of the options that were considered if people are interested they can go geek out on that some of the token economics upgrades that I think are going to be probably fairly quickly and easily adopted that are small are going to be shifting to burn region in order to mend Eco credits making it possible to collateralize Eco Credit Credit claims with regen as a form of

collateral um um and some specific um reallocation of token protocol emissions like inflation rewards for specific public goods and and utilities Beyond security because security is what's incentivized solely what's incentivized at the moment those are three things that I think are going to be fairly non-controversial and aren't radical changes to the Token economics there are also I mean there's also a pretty fundamental radical upgrade coming up likely it's in governance right now which is a shift to adopt the liquid staking module right and that actually transforms the economics entirely

and you know that looks like it's going to move forward and I'm quite excited because that also gives us more tools to build liquidity around Eco credits for instance in creative ways so that's a very interesting sort of evolution that's taking place kind of organically right in the whole community of Cosmos is is engaging in that foreign [Music] okay yeah a stream yard just started playing some music in the background I I don't

know if you guys could hear that that was a bit weird uh yeah so I'd like to talk a little bit about the uh regen 5.0 upgrade so there is a GitHub page that I'll put in the show notes there's a governance proposal that passed in January um explaining this upgrade and there's a there's a couple of interesting things in here so um you guys have implemented uh some Dow support some improvements to governments governance proposal interchange accounts and also reeler relayer incentivization how significant is this upgrade

and what does it mean for and now how is it going to change you know effectively uh I think the I think the big thing here is really governance um how do you think this upgrade will change governance of regen moving forward yeah it's a huge upgrade group module is really a big deal and it's going to transform not just regen ledgers governance I think we might be the first chain that's running it um but uh ecosystem-wide in the cosmos ecosystem so what group module allows is for you to essentially create a Dao a collection of addresses and then set a

governance policy over any of the capabilities that that address has um so for instance you could create a dow that's governing the community spin pool and elect members to that Dao right you could create a Dao that's governing token inflation rates if you wanted like a fed or something like that you know um you could have a dow that's governing any on-chain parameter like and for us this is about Eco credits so we can create subgroups that are specifically governing Eco credit parameters um methodology parameters and other functionality that we've built into the

blockchain I think we'll also use it to engage a little bit with governance of like for instance the community spin pool and this is I want to get into you know I met you mentioned you know Gregory's bearish on Cosmos well let me say why right because we continue to to procrastinate dealing with important structural governance and funding of public goods issues and instead we engage in politics that are essentially you know I want to get money from all of you and so I'm gonna like engage in a political fight over this single issue instead of engaging in the we actually need to

transform and create a process that improves the likelihood that the outcome of those sorts of political engagements is going to be net positive for our protocol and our ecosystem and and it makes me bearish as help right now because I'm like who's going to step up and make sure that like who's the adult in the room who's going to make sure to actually focus on the protocol level upgrades the governance level upgrades and just frankly the people who do step up and and take that kind of responsibility and if I could toot my own horn here like regen has always done that you know tend to get like left behind and you know we're not the loudest voice in the room there's not

hype there's not a money grab involved so it's like people just forget about it and so if that continues if that Dynamic continues in Cosmos where we're just eroding and degrading the the the decorum the governance capability and the tools for our own personal gain then you know the value that's trying to be generated and the ecosystem approach will be eroded over time and the value will be eroded over time and the value of everybody's atoms and osmo and everything do you know everything will get eroded because of that because we're all in this interdependent ecosystem so you know I feel like the issues with governance on blockchain just sort of

mirrors and amplifies the issues of democratic governance and yeah I'm also not always super enthused about the way governance is is sort of managed or discussed you know I feel like but we have every opportunity to change that did the bullish yes the bullish case here is that we have that we can iterate and experiment and create effective ways to govern and so that's part of what the group module allows the group module allows for flexible delegated governance over specific elements that's transparent right that's

fully transparent and it allows off Z to oversee things so you can have the community override something or boot out a delegate you can assemble a group of people and in a much more effective way than just like hey this is a multi-sick so I think I hope I really hope that is the first like it's in downtown is great too like just a shout out to Jake and the Dow Dao Innovation other stuff awesome awesome stuff not everybody's gonna adopt cosmosm right so this is a sort of safe and audited part of the cosmos SDK that natively allows a blockchain running an IBC blockchain to

deal with a lot of the governance issues from a software perspective it doesn't solve like The Meta issue of democratic governance but you know one of the things I think we need to be a little bit more courageous around and and this is sort of like my hot take number two was you know blockchains don't diminish the need for humans right yeah fundamentally this is a coordination blockchains are a piece of software that allows a community to generate consensus and represent that consensus computationally that can be value in different in different domains and different circumstances but that is by definition a governance activity we are

we are coming together with our computers and generating consensus so if we don't think deeply about what that means and how to do it well and have experiments so that different people are trying different things then we're we're losing the thread I think of what is actually transformative about the technology yeah I had this conversation with Jake a couple weeks ago and and you know his argument was hey you know if you're if you're going to want to deal with the community you if you if you want to if you want to appeal to the community for funding for example you've got to deal with the fact that you're you know you're talking with

the community and so you have to address all the issues and and I don't think that I think that works maybe now but I don't think it works at a scale that we envisage blockchains to become like it doesn't work when uh when you have potentially billions of people interacting with blockchains businesses Etc you need to have some amount of responsibility placed on people or groups of people because because I mean effectively this is why this is why we have I mean to some extent you know democracies we we have layers of abstraction between decision making and um and and those who are concerned now

you know it doesn't always work very well in fact I think the issue that we the issue with Democratic Society is that there isn't enough accountability for decisions made there isn't enough transparency around um around how decisions are made Who's involved who they what the incentives are how money is spent uh who who who stands the profit from decisions and I think with blockchains you know we we sort of create this opportunity to improve those systems by having accountability up and down the government's governance stack um there's a long way to go still and uh and I think you know the when you say

that of course people you know the blockchains don't don't eliminate the need for people um but they do they do they do tend to amplify lots of voices and I think that that is something also that you know it's something that also needs to be recognized as as part of the as part of the um I guess as part of the landscape right so if you're in a in a if you're in a in a in a position of responsibility or you

have some responsibility over some part of governance um we I think that a lot of times we let ourselves be clouded by the opinions of you know faceless faceless Anonymous people right and so yeah um that's where accountability also needs to happen on this um you know you also oh we also need to expect accountability of people making claims right and and for sure 100 or like yeah I think we're aligned and I think you know my my definite My Hope Is that the group module specifically and that specific piece of SDK kit that shipped with 046 right and is now available to any blockchain out there

um in the cosmos ecosystem allows us to create what I would refer to as more nested governance meaning you can have accountable responsible people looking out for specific things who are elected to that position or appointed to that position or or rotating into that position I mean you can think of there's amazing history of people experimenting with different ways of decision making and governance right we have the full world is at our fingertips in terms of you know I'm not here to prescribe what the best way of doing that is I just think we need to get busy getting more specific about who's accountable for what

right how are they being held accountable because as you said it's too complex I believe it's too complex at this stage to continue to just have like unicameral mob rule like like people should study history there was a unicameral uh government in France for like how long did that last and what happened afterwards a bunch of people's heads got chopped off at the end of that story at the end of that experiment is like people swayed to mob and all everybody and all this stuff happened and then like you know the original people of the Revolution went and got all their heads chopped off and

then in everybody who disagreed and all this other stuff and so it's what happens when you create conditions where like the the loudest most toxic voice can manipulate public opinion and push something through so democracy evolved to have checks and balances right there are checks and balances and there's a separation of different functions that then check each other and I think we need to evolve quickly quickly and effectively evolve checks and balances like we're doing this on Regent Ledger as quickly as we can with our community but you know I think more broadly in the cosmos ecosystem Cosmos Hub and Beyond there needs to be clear checks and balances and clear thinking about how to manage

that for for the benefit of the whole protocol and the larger ecosystem as well thank you well uh that's I that's a great note to end on I think we agree on the governance part I'm very hopeful to see uh well I'm I think I'm a little bit less bearish than you know I think I'm quite hopeful that these things will get sorted out um I guess I really am too but I want to kind of like I want to push people a little bit and I want you know I think somebody needs to be like I've been that guy in the cosmos ecosystem who's been saying we'll figure it out like let's give everybody the benefit of the doubt I've been saying that for like five

years and and and working hard to make certain things true and like like engage and roll sleeves up and and and do things at this but I just crossed a line and just like that's the truth like like I cross the line and on this side of the line now I'm like you know either action is taken or it's a failure and so like things need to happen now and like that and and otherwise we're we're really deeply in trouble so like I will not vote Yes on any governance proposal on the cosmos hub that isn't dealing with checks and balances and pro governance process

anything that comes up I am a no to and I would encourage everyone else to be a no to we should have a moratorium on any new spins we should have a moratorium on any new upgrades and we should say the most important thing is to have a charter and a process and set of checks and balances in a first iteration even if it's only for a period of time right even if it's like we're going to do this for a quarter whatever it is I don't know how to push it through but I really strongly believe nothing else should go through until that happens basically that and um that's just my sort of opinion in the cosmos Hub leads and that's the role of the cosmos Hub I mean people other people experiment and things but in a conservative slow way

Cosmos Hub is still in a lot of ways the heart of everything and so those of us who are OG's and those of us who are new geez and those of us who um care I think we should just basically be like procedurally I don't know we maybe we need to start a new political party or something that's like you know nothing happens you know it's like um I don't know but that's the the that's Gregory's like um no more tolerance and it and this is like I'm saying things like I agree with a lot of the stuff that's coming through it's like I I agree with it but I think there's a deeper thing that has to be

addressed and I know that that's hard and different people are going to have different feelings and challenges with that but my opinion is until we deal with that I can't say yes to anything because it's too because I don't have the capability to follow all the threads and to assess all the things I need to know who's accountable and who how I can hold them accountable to deal with the complex decision making that already exists let alone is going to exist in the future yeah well we could spend another hour just talking about the cosmos Hub and I realized we haven't we I've got so much so much more stuff here on on my rundown but I wish we could have talked about but we'll have to keep it for another time um Greg it's been great having you on

and yeah thanks uh thanks for being so generous with your time I know you have another call in a couple of minutes here where you're gonna have to ramble for another another yeah yeah another hour people who are live and want to listen to someone basically rip apart the um critiques of carbon markets live on Twitter spaces head over to region networks Twitter because I'm going to be um interviewing um Steve zwick who's been in the space for a long time and is the director of media at Vera which is the biggest um carbon voluntary carbon um registry system and there's recently been a bunch of drama Guardian articles

and other things calling into question you know all sorts of things we released we did a bunch of science on all of this um Steve is going to be talking all about we've tried to cover it from all sides but Steve is going to sort of like give his take and it's probably useful for people to listen and if you're curious about the you know the the foundations and how solid the foundations are for for carbon markets moving forward it should be an interesting Twitter spaces awesome thanks so much Greg talk to you soon ciao and to our listeners thanks so much for tuning in we go live every week so make sure to hit the like button hit notification Bell And subscribe to get notified and if you've enjoyed this

content please consider staking with interop we're live on evmos Quicksilver and now Juno on osmosis we're at the very bottom of the list on Juno and osmosis and I'm really hoping that we can climb up the ranks by attracting more delegations from people like you so if you enjoy this content please support the channel by staking with interop that's it for me I'll see you next week