Carbon Selling Strategies

Is is better to sell carbon to the AAM in a single or multiple transactions?

Interactive Case Study

Initial Parameters

Strategy 1: Sell Carbon in Multiple Transactions

Selling carbon in transactions results in a total emission of:

 KLIMA

Strategy 2: Sell Carbon in a Single Transaction

Selling carbon in a single transaction results in a total emission of:

 KLIMA

Analysis

Figure 1 shows the proportion of minted Klima while selling carbon to the AAM in multiple transactions and in a single transaction. At first sight, selling carbon in a single transaction seems to almost always create more Klima than selling carbon in multiple transactions. The difference is especially large when a large share of circulating Klima tokens are already staked for the carbon class and a large quantity of carbon is sold relative to the quantity initially present in the AAM portfolio.

Figure 2 gives a finer look by showing the difference between the logarithms of each side of Figure 1. This representation shows that when roughly less than 40% of circulating Klima are staked for a carbon class, selling carbon from this class in multiple transactions creates more Klima than in a single transaction.

Figure 1: as a function of and when carbon is sold to the AAM in multiple transactions (left) or in a single transaction (right)
Figure 2: Difference between the two strategies: a single transaction gives more Klima in the blue area, while multiple transactions give more Klima in the red area