Klima 2.0: An Operating System for Carbon Markets

Why Klima 2.0 Exists

Carbon markets today are opaque, fragmented, and difficult to access. Project developers face challenges accessing the market, buyers struggle to source credits quickly and transparently, and pricing is often hidden behind layers of transaction fees.

Klima 2.0 is changing this. On Base, we are building an open climate finance protocol that enables a transparent, efficient, and permissionless carbon market: one where credits are priced, traded, and retired fully onchain, where value is fairly distributed to users, and where the system is free and independent from expensive, outdated, obfuscated pricing feeds.

The Protocol itself acts as an on-chain carbon asset manager. It autonomously acquires carbon credits from developers and traders, and allows buyers to access retirement certificates for environmental claims.

Everything is automated, transparent, and informed by its users: the approach represents a new operating system for how value is transacted with the carbon markets.

At the heart of this system are two tokens: $kVCM and $K2. Together, they allow Klima to go beyond just tokenization, and create an accessible market for risk-adjusted carbon pricing.

$kVCM: The Primary Utility Token

$kVCM is the primary token of Klima 2.0. It serves three purposes:

1. Medium of exchange with the Protocol.

   • When carbon credits are acquired by the Protocol, $kVCM is minted.

   • When credits are retired, $kVCM is burned.

     
     

2. Index of the carbon portfolio.

   • Each $kVCM represents a proportional share of the carbon credits held by the Protocol.

   • The market capitalization of $kVCM is mathematically pinned to the Net Asset Value (NAV) of those credits.

     
     

3. Governance mechanism.

   • Holders who lock their $kVCM tokens can vote directly on the Protocol carbon class pricing as well as its buying capacity; giving them the direct ability to influence the development of Protocol's carbon portfolio in collaboration with other users.

$kVCM is the centre piece of Klima's carbon market operating system: recording carbon inflows and retirements, weighting classes, and ensuring the Protocol’s portfolio is transparently represented on-chain.

$K2: The Risk Governance Token

$K2 plays a complementary role in the ecosystem, refining the portfolio and adding precision to how risk and allocations are managed.

$K2 has a fixed supply of 100 million tokens, distributed programmatically over four years. Holders allocate it across carbon classes to express views about risk and market sentiment. This governance layer allows Klima to adapt dynamically to changing conditions, for example:

• Market signals: Anticipated integrity concerns arise around REDD+ credits. $K2 holders deallocate from REDD+, lowering the Protocol’s exposure and effective purchasing power.

• Microeconomic signal: a disproportionate amount of $kVCM is flowing into the BCHAR carbon class that seems irrational or manipulative, users allocate $K2 in the opposite direction, correcting the imbalance and signaling higher risk.

In short: $kVCM allocates capital, while $K2 governs how safe or risky those allocations are.

How Value Flows

Klima’s design aligns incentives around a single ecosystem, rather than pitting market actors against each other. Users who provide liquidity, pricing, or risk governance receive rewards and gain influence.

Value distribution works in two ways:

1. Carbon Portfolio Growth — $kVCM market cap is pinned to the Net Asset Value of the carbon credits held by the Protocol. In practice, secondary markets may introduce short-term variance, but growth in NAV directly drives $kVCM. Users are incentivised to help the Protocol acquire valuable carbon credits.

   
   

2. Incentives — Users who lock tokens for governance voting or that provide liquidity earn periodic rewards in $kVCM and $K2. These distributions are programmatic and tied to real activity in the Protocol.

   
   

There are no VCs, no hidden fees, and no centralized value extraction. All value accrues to token holders who participate in the system.

Liquidity by Design

The Protocol only deploys its native tokens in liquidity pools, whilst carbon prices are determined internally. Anyone wanting to transact carbon with the Protocol does so using $kVCM. This insulates carbon pricing itself from onchain volatility and market noise, whilst giving the entire portfolio a USD reference price.

• $kVCM<>USDC is the anchor pool. This ensures carbon prices reflects only real supply and demand fundamentals, as well as user voting inputs.

• $K2 is paired with $kVCM creating a relationship between the two tokens. Its purpose is governance, not direct exposure to carbon or market volatility.

• veAERO is leveraged to bootstrap liquidity, with incentives concentrated on the $kVCM<>USDC pool. This provides deep and stable markets, enabling users to enter and exit the ecosystem at will.

  
  

Ultimately, $kVCM and $K2 are correlated with legitimate utilisation of the Protocol and the carbon markets, rather than speculation or general crypto volatility.

Fair Launch and Distribution

Klima 2.0 is designed for transparency and fairness from the outset.

$kVCM Distribution:

• 87.5%: Fair launch participants

• 10.0%: Klima Foundation

• 2.5%: 01x (tokenomics design)

• Ongoing supply: minted only as the Protocol acquires new carbon assets

$K2 Distribution:

• 44.4%: Fair launch participants

• 44.4%: Protocol users over four years

• 5.0%: Klima Foundation

• 2.5%: 01x

• 3.3%: pKLIMA holders from Klima 1.0

7% of supply is seeded into the $kVCM<>$K2 pool on day one by the Foundation and 01x, subject to linear vesting.

Klima’s veAERO position will be dynamically allocated between pools as liquidity evolves.

This approach ensures that Klima’s growth is community-driven and aligned with long-term participants not near-term value extraction.

The Bigger Picture

Klima 2.0 is building more than a token system. It is creating a transparent, scalable carbon market that can finally deliver on the promise of onchain carbon:

Carbon markets do not need to be zero-sum. By rewarding users for providing liquidity, pricing, and risk governance, Klima 2.0 makes everyone a stakeholder in building a healthier ecosystem.

This is the foundation for an open, permissionless carbon market and the next chapter of Klima’s mission.

This is a new operating system for carbon markets. To participate in Klima 2.0, visit klimaprotocol.com