Verified Carbon Credit Tokenization

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The DCF Protocol governs the digital lifecycle of verified carbon credits from registry issuance through permanent retirement. Credits must first be independently verified and issued by a recognized third-party registry. Prior to any digital representation, credits are immobilized at the registry or trustee level to prevent concurrent transfer or resale. The digital representation is permitted only on a strict one-to-one basis with immobilized credits. Transfers reflect transfer of the associated environmental attribute under protocol rules. Retirement is enforced through burn-to-retire mechanics that permanently extinguish the digital unit and trigger corresponding registry retirement. The protocol explicitly excludes mixed reserves, discretionary issuance, synthetic exposure, algorithmic supply expansion, price stabilization mechanisms, monetary pegs, validator incentives, staking rewards, liquidity incentives, or any feature that would weaken reconciliation, supply predictability, or market neutrality.

Under the DCF Protocol, the carbon credit lifecycle follows a deterministic and auditable sequence. Project development and operation are followed by independent third-party verification. Verified credits are issued by a recognized registry and then immobilized prior to any digital representation. Digital units may then be transferred between counterparties under protocol rules. When a digital unit is burned, the corresponding registry credit is permanently retired, ensuring environmental finality and preventing reuse. This lifecycle is enforced by protocol design rather than discretionary action, financial incentives, market intervention, or public-ledger governance.