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Token Locking

Overview​

On the CO2 TRUST platform, the concept of token locking is a pivotal aspect of managing CO2T tokens. This page explains the token locking mechanism, focusing on the states CO2T tokens can be in, and how these states impact the status and actions permissible for each token.

Purpose of Token Locking​

Token locking in the context of CO2T tokens is not just about security, but also about defining the status and flexibility of these tokens in the marketplace:

  • Refundable State (Locked): When CO2T tokens are locked, they are still in a refundable state, allowing buyers to return the tokens under certain conditions.
  • Sale or Retirement State (Unlocked): Unlocking a CO2T token moves it into a non-refundable state but allows it to be actively traded or the contained wCORC token to be retired or released.

How Token Locking Works​

Locking States​

  1. Locked State:

    • CO2T tokens are initially locked when created. This locked status indicates that the tokens are refundable, and the carbon credits (wCORC tokens) they potentially contain are not yet permanently attached.
    • Investors and buyers have the assurance that they can opt for a refund if the conditions or terms of the initial agreement are not met.

  2. Unlocked State:

    • When a CO2T token is unlocked, it signifies that the token is ready for sale and no longer eligible for refunds.
    • This transition often occurs after the initial conditions set for the CO2T tokens are satisfactorily met, or when the carbon credits need to be utilized or retired.
    • Once unlocked, CO2T tokens allow for the retirement or release of the wCORC tokens they contain, if not permanently locked.

Transition Between States​

  • Initiating a State Change: The change from locked to unlocked state can occur based on supplier actions, such as confirming the availability and verification of the corresponding wCORC tokens.
  • Actions Post-Unlocking: In the unlocked state, CO2T tokens can either be traded in the marketplace or used to retire the associated carbon credits. If an owner chooses to retire the wCORC tokens, the CO2T tokens can also be destroyed, permanently removing both the token and the credit from circulation.

Conclusion​

Token locking on the CO2 TRUST platform is a critical feature that regulates the flexibility and security of CO2T tokens. Understanding whether a token is locked or unlocked helps participants gauge their options regarding refunds, sales, and the strategic use of the carbon credits they represent. This mechanism ensures that all parties have clarity on the terms of engagement and the implications of their token transactions.