# What is Klima? {% hint style="danger" %} **Non-investment notice**\ Klima is market infrastructure, not an investment product. Participation does not confer ownership of protocol-held assets or any right to redeem, withdraw, or monetise carbon credits, which may only be accessed for retirement via irreversible destruction. {% endhint %} ### Introduction Today’s spot carbon markets are fragmented, slow, and opaque. These structural issues prevent the market from scaling into a reliable, accessible market and restrict capital flow to high-quality climate projects. The core challenges are well-known: * inconsistent standardisation * limited fungibility * fragmented liquidity * opaque pricing * slow settlement * lack of trust and comparability Klima exists to address them. By providing transparency and standardisation, and a transparent incentive mechanism for those who contribute. The infrastructure takes no fees or retained surplus. *** ### How Klima Works Klima coordinates carbon market activity through open-source smart contracts on the [Base network](https://www.base.org/): * **Dynamic market parameters:** The protocol automatically adjusts execution rates and eligibility constraints based on live market inputs (e.g. new supply, retirement demand). * **Supplier-centric:** Suppliers sell carbon credits directly to the protocol at programmatically determined, real-time prices ([Carbon seller’s handbook](/carbon-sellers-handbook/overview-for-carbon-suppliers.md)). * **Instant retirement:** Buyers purchase carbon retirement certificates at guaranteed, real-time rates ([Carbon buyer’s handbook](/carbon-buyers-handbook/overview.md)). * **Always-on:** Liquidity providers supply continuous market depth, enabling market access and consistent execution ([Liquidity provider’s handbook](/liquidity-providers-handbook/overview.md)). * **Incentive-driven value flow:** Protocol incentives are used to encourage liquidity provision, usage, and system integrity ([Governance handbook](/governance-handbook/overview.md)). The result is a coordinated, credibly neutral, rules-based market. *** ### What Klima Enables **Standardised carbon classes** * Credits with shared characteristics are grouped into transparent carbon classes, improving comparability and accessibility. **Real-time, rules-based execution** * Smart contracts price and settle transactions continuously based on live market inputs, reducing dependence on intermediaries. **24/7 market access** * Users can transact across a range of whitelisted carbon credits, at any time, with low slippage and consistent execution quality. **Transparent market data** * Pricing, inventory composition, flows, and value distribution are visible onchain. Market participants and auditors can inspect, analyse, and build on the data in real time. **Impact over extraction** * The Klima Protocol charges no fees and does not extract value. Protocol incentives are allocated according to transparent, pre-defined rules to support participation and system operation. --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://docs.klimaprotocol.com/what-is-klima.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.