Frequently Asked Questions
Is the KKB Token a carbon credit?
No. It is a completely new on-chain asset class. A KKB is a tokenized EU carbon allowance (EUA) from the EU Emission Trading Scheme (ETS). One EUA allows a company to pollute one tonne of carbon. Because each KKB Token is backed by one EUA, owning a KKB removes the allowance available to companies, thereby forcing them to reduce their carbon emissions. On the other carbon credits are used only on a voluntary basis by polluters who can choose to look good by netting off (offsetting) their pollution; so they can produce as much as they like and choose if they want to offset by buying voluntary carbon permits. Both KKBs/EU carbon allowances and voluntary carbon permits have their place in helping prevent climate change. But KKBs/EUAs force a reduction in existing pollution.
Why is a KKB valuable?
One KKB can be redeemed at any time for one EUA. Furthermore, KKB does not get diluted over time as Kakubi AG holds in a segregated account at least as many EUAs as total in circulation KKBs rather than to attempt to secure them via futures.
Are KKBs correlated to other assets?
The correlation of EUAs to other asset classes is very low. Consequently KKBs’ correlation will also be very low.
Are KKBs safe to use by anyone?
Safety has been a top priority for us, as a result, Kakubi bridge is designed to be:
Audited monthly. The amount of EUAs that fully collateralize each KKB is monthly audited by an external party. You can find these reports at www.kakubi.com/audit
Segregated asset. All EUAs backing KKB tokens are accounted for in a segregated way in an account under the EU ETS.
Persistent. A suite of non-upgradable smart contracts to provide maximum transparency to the ecosystem user.
Time-locked. There is a one-week window for any sensitive parameters changes to be effective.
Who can use Kakubi's bridge?
Kakubi is a fully compliant and regulated Swiss-based company. Hence any individual or organization using onboarding EUAs (i.e., minting KKBs) or off-boarding KKB (i.e., burning KKBs in exchange for EUAs or its equivalent in USDC) must pass a KYC/KYB process to comply with the AML regulation.
Is there a limit to the Fee on Transfer (FoT)?
Yes, the maximum value a FoT can take is 1%. If this value is changed, it will take 48 hours to be effective.
Does Kakubi use any oracle services?
No, oracle services are not used.
Kakubi is a simple bridge of EUAs for on-boarding and off-boarding. The quoted price in this process is based on the market value provided by our EUAs providers.
I see the price of KKB is different from EUA, why?
There are two sources of price for KKB:
Minting price. The mint price of KKB is set to the price of an EUA + fees described in pricing section. The prices you see is the maximum price that you are willing to pay for these KKB. So, you will at least receive this amount of KKB. Setting lower slippage tolerances would get you a better price at the expense of decreasing the odds of the order getting delivered.
On-chain price. 1 KKB can always be redeemed for 1 EUA using Kakubi's bridge. However, KKB can be used and integrated in the blockchain ecosystem. For example, some market makers may give a premium to purchase their KKB directly from them instead of bridging using Kakubi's services that usually take 48 hours.
Notice, that this differences in price may offer some arbitrage opportunities that third parties can serve.
Why is there a spread in the price of EUA when on-boarding or off-boarding KKB?
Kakubi selects the cheapest supplier to on-board EUA via minting KKB. The price of KKB is determined by our suppliers of EUA plus a small fee.
In normal conditions there is not much volatility, however, in extreme cases the price Kakubi's suppliers offer may vary in seconds. This volatility is a factor we cannot control, but we provide a setting to empower the user that wants to buy EUA in this cases by setting a high spread.
What is the EU ETS?
Established in 2005, the EU Emission Trading Scheme (EU ETS) is fully regulated by the EU. The EU ETS is the EU’s cornerstone policy to reduce CO2 emissions by 55% by 2030 from 1990 levels as well as meeting its net zero 2050 target. Industries falling under the EU ETS regulatory umbrella account for over 40% of EU emissions. They include power, oil & gas, chemicals, ceramics, mining, glass and pulp & paper (aviation and maritime are slated to join the EU ETS in 2024). Other industries, principally agriculture, buildings and transport do not fall under the EU ETS scheme; although in time they may have their own scheme (this is currently being debated but some time away).
How does the EU ETS work?
The EU ETS is a cap-and-trade system. The EU allocates close to half of EU allowances (EUAs) to companies for free and the rest are sold via almost daily auctions. The supply of these EUAs is reduced each year in order to meet the EU’s 2030 55% reduction target.
Every 30th April, companies must deliver emission EUAs to their government, matching their prior calendar year carbon emissions. Should they fall short of EUAs, they face a fine of €121/tonne and still must deliver said allowances the following year (on top of next year’s requirement). For example, if a company emitted 10mt of CO2 in 2021, it would have to deliver 10m EUAs on 30th April 2022. If it only delivered 6m (eg unable to buy the rest in the market due to supply squeeze), then it would get fined 4mx€121=€484m. On 30th April 2023 it would have to deliver not only the allowances to match its 2022 carbon emissions but also the 4m permits it failed to deliver in the prior year. At the right price, this incentivises companies to reduce their emissions.
What are the differences between compliant and voluntary carbon?
You can read about the differences in Carbon Trading. Both compliant and voluntary carbon are necessary in the quest to combat the Climate Emergency.
Compliant carbon, e.g. the EU ETS, is regulated and enforces companies to annualy deliver allowances that match their emissions. At the correct price level, this financial cost will provide a financial incentive to reduce emissions.
Voluntary carbon is, as the name suggests, down to each entity who, for whatever reason, wishes to offset its carbon footprint. Significant efforts are being made to standardise this highly fragmented and unregulated market. The voluntary market encompasses projects which include planting forests, sustainable development and carbon capture amongst many others.
Are there any differences across compliant carbon markets?
The EU ETS dominates the global market place, accounting for 80% of traded volume. Nevertheless, there are other markets already in existence including Switzerland (linked to the EU ETS), UK (formerly part of the EU ETS), US (RGGI and WCI), New Zealand, South Korea and China. Each and every market has its own regulation, different parameters and, consequently, supply/demand dynamics.
Will you also tokenize voluntary carbon credits?
No, Kakubi's mission is tokenizing compliant carbon. However, we are building and actively looking to expand our alliances with voluntary carbon organizations.
Why are Kakubi's headquarters in Switzerland?
The organization is hosted in a safe and historically neutral country: Switzerland, which is a country with one of the highest legal certainty in the world and with international organizations such as the UN, ICRC, WMO, IPCC, and WTO, among some ILOs present in Geneva.
Kakubi AG is a company established within crypto friendly canton of Zug, Switzerland.
Why did you launch in Ethereum?
We launched in the most secure and decentralized network that focuses on smart contracts. However, Kakubi's roadmap is moving multi-chain to eco-friendly blockchains and L2s.
Kakubi AG waited to launch until Ethereum transitioned to Proof of Stake to minimize its carbon footprint.
Will KKBs go to other blockchains?
Yes, KKB will be bridged to selected eco-friendly and safe blockchains.
Will you do an airdrop?
We can not confirm nor deny the existence of a future airdrop at this moment.
This is my first time in blockchain, what should I do?
Please, join Discord and reach a moderator to help you in this process. Be aware, that moderators will not send direct messages (DM) to you.
I need additional support from the team, what should I do?
Check the FAQ, if you can not find the answer, Kakubi provides support via a ticket system in Discord
I can't buy KKB in your website what am I doing wrong?
Please use a computer with a web browser. Supported browsers are: Google Chrome >83 Microsoft Edge (Chromium) >83 Mozilla Firefox >76 Safari >13 Opera >68 Brave > 1.36 Also, make sure you have the latest version of Metamask extension installed in the browser.
I've claimed my KKB but I don't see them in Metamask
Make sure you have the latest version of Metamask extension installed in the browser. Go to Metamask -> Import Tokens -> Custom Token Copy and paste this line under Token Custom address:
0x2472ec510Fc7aAfe009428E7A249f888E0e5B47d Finally, click on Add custom Token button and finish by clicking the Import Token button.
Last updated