StellarcarbonExplained
Sinking process
Our customers can sink tokens, meaning they buy the token and immediately lock it onto their account. This locking means the is no longer a tradeable object and the investment into the project is now funded. The owner of the account on which the balance is locked may claim the environmental benefit.
An essential part of the mechanism is that the input is permanently removed from circulation. In cryptocurrency jargon this is also known as "token burning". We avoid this phrase because sinking causes a reduction of CO₂ in the atmosphere, and no combustion is involved.
Sinking transactionThe locking mechanism is contained within each transaction. Stellarcarbon builds transactions that swap the purchased for CarbonSINK. As such, the recipient receives CarbonSINK in their wallet as proof of their contribution. This creates an obligation for Stellarcarbon to process a retirement in the Verra Registry. The CarbonSINK asset represents an equal amount of sunk and cannot be traded or transferred.
Key guarantees for blockchain experts- Atomicity: both token burn and mint occur in a single ledger transaction.
- Transparency: every sinking transaction is publicly visible on Stellar block explorers and in our audit tool.
- Traceability: retirements link to the hash digests of the transactions that they incorporate.