Overview - Tokens, Yield, Governance

Yield & governance in Klima Protocol: earn kVCM yield from locked positions and use allocation to govern carbon-class prices; K2 (fixed supply) routes incentives.

The full protocol and app are scheduled for release by the end of December 2025. The actions described below will become available at that time.

Klima Protocol is made possible by two tokens.

• kVCM (the "asset token") is used to trade carbon, to govern carbon prices, and to participate in a time-locked market. It has a variable supply and is minted as yield and to acquire carbon, and burnt to retire carbon offsets.

• K2 (the "risk governance token") has a fixed-supply and is used to govern carbon prices. K2 tokens will be distributed to participants through a 48-month incentives program.

Yield Overview

Klima offers 3 yield-bearing functions. All yield is emitted as newly-minted kVCM.

Function	Commitment	kVCM Yield
Time-Lock kVCM	Until maturity. 90 day increments.	Compounding, variable rate computed daily.
User-Lock K2	48 hours.	Non-compounding, variable rate computed daily.
Stake Liquidity	Until maturity. 90 day increments.	Non-compounding, variable rate computed daily.

Governance Overview

While earning yield, you can also govern the price and perceived risk of carbon classes. This function is called allocation. You can only allocate time-locked kVCM and user-locked K2.

• When you allocate kVCM tokens to a class of carbon, it increases the price-per-tonne for buyers and sellers.

• When you allocate K2 tokens to a class of carbon, it reduces the difference between the buyers' price and sellers' price, thus facilitating trades and signalling the class as lower risk.

• You can deallocate any portion at any time.

• Your allocation decisions do not impact your yield or risk— they only guide the prices of carbon credits.

• Well-informed allocations lead to a healthy market for carbon credits, with competitively-priced credits, and a positive spread on each credit sold. This strengthens the value of both K2 and kVCM.