# Toucan (Protocol) https://docs.toucan.earth/protocol/introduction/defi-refi ## Mission Toucan are determined to use DeFi to combat climate challenge by building the necessary public infrastructure for a 'new money lego', which they believe is through **programmable carbon **. ## How it works To bring carbon on-chain, Toucan has developed the Carbon Bridge, which allows anybody to tokenise their carbon offsets and make them available in the world of DeFi. They have also developed a Carbon Pool, with launch partner [[Klima DAO]]. Carbon pools turn carbon offsets into more liquid carbon index tokens, enabling price discovery for different classes of carbon assets and providing a new money lego to DeFi. Carbon pools work by accepting carbon offsets which have a matching set of gating attributes. Toucan has created a Base Carbon Tonne (BCT) pool, but they plan to create pools with other attributes in the near future. By depositing tokenised carbon offsets (TCO2 tokens) into a pool, users recieve carbon reference tokens, a fungible pool token that is backed by one offset held in the smart contract. By aggregating carbon offsets in the Carbon Pool smart contracts, the Toucan Protocol enables the creation of liquid carbon tokens like BCT. These carbon reference tokens can easily be integrated across DeFi. Below shows the overarching design of the Toucan Protocol, to demonstrate how it works. ![[Pasted image 20211113145657.png]] ## Why it works The main goal of the voluntary carbon market is to drive finance to carbon projects that reduce GHG emissions. Carbon offsets connect carbon projects with consumers that purchase offsets to achieve their climate targets, since a carbon offset represents a measurable removal or reduction of GHG emissions. Therefore, by enabling these carbon offsets to be tokenised and traded, Toucan enables the financing of 'green' projects which reduce GHG emissiosn.