Introducing Klima Prize USDC

Yield that funds carbon retirements without asking depositors to think about it

There is a new vault live on Base.

Deposit USDC into Klima Prize USDC, and you get prize odds on @PoolTogether's shared prize pool for as long as you hold the position. 5% of the yield the vault earns is routed to carbon retirements. The remaining 95% percent flows to depositors as chances at WETH-denominated prizes, currently around $4,000 - $5,000 for the grand prize, plus a series of smaller daily ones.

The vault is lossless in the sense that your principal is recoverable one-to-one at any point: deposits earn yield, the yield is what gets split, the underlying USDC is not taken from the vault contract.

DeFi primitives scaling voluntary carbon market demand

The reason a product like this matters is structural. DeFi processes trillion dollars of annual volume, continuously, automatically, without anyone choosing to opt in. The voluntary carbon market, depending on the source, is worth between half a billion and 1.7 billion dollars and has been declining since its 2021 peak. The gap between those two numbers is the opportunity. If a small and growing share of onchain flow can be routed through to carbon retirements, the carbon market gets a kind of demand it has historically struggled to generate: continuous, programmatic, and not contingent on procurement cycles or marketing spend.

Klima Prize USDC is one concrete instance of that routing.

The trade for the depositor is plain. They forgo a small share of the yield they would otherwise keep. In exchange, they get prize odds on the remainder, and a stream of carbon retirements that happens automatically in the background without any further action on their part. It is not a higher-yield USDC vault than the alternatives; that is not the claim. It is a savings primitive where the yield does climate work, and the depositor never has to make a separate decision to fund it.

At a million dollars of TVL, with the underlying Moonwell Flagship USDC strategy earning roughly 4.5%, the vault produces around 45,000 USDC of annual yield. 2,250 USDC of that goes to retirements. The remainder flows through the prize pool to depositors. Those are honest numbers – the more interesting claim is that the mechanism scales linearly with TVL and yield.

A prize savings vault that routes a fixed percentage of yield to retirements is, in effect, a continuous and behaviourally costless source of demand for the carbon markets. The depositor is not being asked to donate, to offset their footprint, or to think about climate at the point of deposit. They are using a savings product, and the savings product happens to fund retirements as a function of how it operates.

That distinction is the part worth dwelling on. The voluntary carbon market has a persistent demand problem: corporate buyers cycle in and out of programmes, retail demand requires sustained behavioural prompts, and most of the existing tooling depends on someone making an explicit purchasing decision. An onchain savings vault that programmatically retires credits is a different kind of demand source. It compounds with adoption of the underlying savings product rather than with marketing spend, and it routes through smart contracts rather than through procurement teams.

Autonomous retirements

The retirement leg is handled by a piece of infrastructure Klima built called the Auto Retire Bot. After yield is claimed by the vault, the fee share flows to the bot, which uses an x402 endpoint to select the credits to retire and executes the retirement onchain through Klima's existing retirement contracts.

There is no human in the loop. Retirements are visible on the Klima dashboard, and because everything settles onchain the trail is auditable end to end: yield earned, credits selected, retirement transaction. No fees taken on the carbon, no hidden margin going to a treasury, no discretionary sourcing overhead.

This matters because the credibility of any programmatic retirement claim ultimately rests on whether someone outside the protocol can verify it without taking the protocol's word for the volumes and the value.

The Auto Retire Bot is the piece that closes that loop, and the dashboard is where a reader who wants to check the work can do so.

What this is one instance of

Onchain yield is increasingly programmable, in the sense that protocols can specify where a portion of it goes before it reaches the user, without requiring the user to opt in to a donation or a separate flow. Most of the early experiments have routed yield to protocol treasuries or to liquidity incentives. Routing it instead to a verifiable climate outcome is a small change in plumbing and a meaningful change in what the yield is doing.

Klima's purpose is simple: drive legitimate retirement demand to the voluntary carbon market, because it is retirement demand that scales this market. The mechanisms that do that work best are the ones that compound with onchain adoption rather than with procurement cycles. Klima Prize USDC is one early instance. There will be others.

Want to participate in the Klima x PoolTogether USDC vault? Visit Cabana.