Carbon Loophole
Is it worth it to pre-retire carbon before selling carbon to the protocol?
Selling Carbon at a Premium
When a users plans to sell carbon to the protocol, it is often very lucrative to retire almost all the carbon that’s already in the portfolio beforehand.
How to Prevent this Scenario?
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Supervise the introduction of new carbon classes?
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Modify the model to use a time-weighted average price instead of using an “instantaneous” price (similar to Uniswap V2 price oracles)?
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Well-defined “open hours” when users can sell carbon, separate “open hours” when people can retire carbon, and “closed hours” when people can only adjust their allocations?