Other marketplace mechanics

To reiterate some of Nori's core marketplace mechanics:

• The Nori Regenerative Tonne™ is a carbon removal asset. It is both minted and retired on the blockchain, complete with all transaction and real-world data to enhance its traceability.

• Nori Regenerative Tonnes can’t be re-sold or traded.

Now, we’ll explore other important marketplace mechanics in Nori’s ecosystem.

Round Robin market

Current state

Nori has updated its marketplace mechanics to incorporate a new ‘round-robin’ system that impacts the order in which Nori Regenerative Tonnes are sold. Under this system, Nori Regenerative Tonnes that enter the marketplace first get preference over those that entered it more recently. However, Regenerative Tonne sales will also cycle through different Suppliers more frequently to increase diversification of Buyers' purchases and revenue conversion for Suppliers.

This mechanism has a variety of potential benefits:

• Diversification: By purchasing Nori Regenerative Tonnes from a more diverse mix of projects, Buyers reduce their risk of carbon loss, which is good even if Nori’s warranty ensures they’ll always be made whole.

• Equitable revenue: A FIFO-only system may lead to wait times for new and / or smaller Suppliers before their Nori Regenerative Tonnes come up ‘in queue.’ The round-robin system will help Suppliers get paid more quickly and in a more predictable fashion.

• Throughput: Cycling suppliers when fulfilling Buyers’ orders should also speed up the rate at which Nori incentivizes supply as it reduces the time to get new suppliers paid.

FIFO market

Previous state

Nori’s marketplace has traditionally operated as a first-in, first-out (“FIFO”) marketplace. Since the Regenerative Tonnes in Nori’s marketplace are all standardized, Buyers who purchase Regenerative Tonnes aren’t selecting between products with fundamentally different carbon removal characteristics. Regenerative Tonnes are unique in that each one can be traced back to an individual Supplier and includes data provided by said Supplier during Regenerative Tonne creation. All Regenerative Tonnes still represent one tonne of CO2 removed from the atmosphere and sequestered for at least ten years.

As a result, Buyers purchase Regenerative Tonnes from a single ‘pool’ of carbon removals. In the FIFO system, when Buyers purchased Regenerative Tonnes, the credits they were issued were the first ones that entered the marketplace that hadn't yet been sold (hence first-in, first-out).

While Buyers purchase Regenerative Tonnes with the oldest ‘vintages’ available in the Nori marketplace, at scale, the FIFO mechanism improved the throughput of carbon removal and ensured that the vintages of Regenerative Tonnes that Suppliers purchase are adequately recent.

Let’s imagine an alternate scenario where Nori’s marketplace operated on ‘LIFO’ principles, i.e., last-in, first out. Some Buyers would receive the newest possible vintages as new Regenerative Tonne supply entered and immediately exited the marketplace. However, those new Regenerative Tonnes would constantly be jumping in line ahead of other previously supplied Regenerative Tonnes. The Regenerative Tonnes that remained in queue for sale would age, potentially to the point of being outdated, and their Suppliers might have to wait considerable amounts of time before receiving payment for their Regenerative Tonnes.

Functionally, given supply constraints in voluntary carbon markets, Regenerative Tonnes in Nori’s marketplace have sold quickly once listed for sale, and the vintages Buyers receive are highly current. For more on vintages, see the Challenges in carbon markets sub-section.

This whitepaper section will be updated if and when any changes to Nori’s Regenerative Tonne cycling mechanism are implemented.

Pricing

Nori currently charges a fixed amount for Regenerative Tonnes. This price has been determined by Suppliers after Nori provided internal analyses of what prices would be attractive to Buyers.

Purchasing Regenerative Tonnes

Nori aims to make buying Regenerative Tonnes as seamless a process as possible. Ideally, it’d be as easy as purchasing any other good online. No brokering between buyers and sellers is required. This contrasts to the rest of the voluntary carbon market, where considerable sums are paid to brokers who diligence projects and arrange sales.

Buyers can transact in cash on Nori’s website to purchase Nori Regenerative Tonnes.

The speed with which transactions take place on the Nori platform and are confirmed on-chain, with all requisite data logged, is also notable. Transactions in Nori’s marketplace execute within seconds, or, at longest, a few minutes. Contrast this with other carbon credit transactions, where buyers work with consultants and brokers to source supply. That process can take months and often comes with considerable fees.

Payment

Suppliers are paid for their Nori Regenerative Tonnes in USDC, which they can instantly convert to cash.

Retirement

When Buyers purchase Nori Regenerative Tonnes, the credits are transferred to them and are retired from circulation, with all transaction details logged on-chain. These credits can’t be traded, and Nori’s blockchain infrastructure maintains a log of who purchased which Regenerative Tonne on what date and at what time. This makes it difficult for another entity to, in good faith, claim credit for the carbon removal or for the Buyer to claim credit for the same carbon removal multiple times.

From a blockchain perspective, the NFT(s) representing Regenerative Tonnes are also sent to a ‘Certificate’ smart contract that designates that the associated Regenerative Tonnes have been retired. The NFTs are updated with bookkeeping data covering final ownership and sales price. Once they enter the certificate contract, the NFTs become non-transferrable.

Immediate retirement helps ensure that Nori Regenerative Tonnes aren’t double-counted and that each new dollar invested in carbon markets drives impact.