Credit Retirement

What is credit retirement?

Credit retirement is the act of permanently removing environmental credits from circulation to claim the offset they represent. When a Tokenized Recycling Credit (TRC) or Tokenized Carbon Credit (TCC) is retired, the token is burned (destroyed on-chain) and can never be re-sold, re-used, or double-counted.

Retirement is what transforms a tradeable financial asset into a permanent environmental claim. Until credits are retired, they represent available inventory. After retirement, they represent claimed impact — recorded permanently on the blockchain and viewable through the Carrot Explorer or any blockchain block explorer (e.g. PolygonScan).

Two retirement paths

The Carrot Network supports two methods for retiring credits:

Standalone retirement

The credit holder retires credits from their own wallet at any time after purchase. This is useful for buyers that purchase credits in advance and retire them according to their own reporting schedules.

1. The holder signs a retirement transaction specifying the credit type and amount.
2. Credit tokens are burned from the holder's wallet balance.
3. The backing certificate's retirement amount is updated.
4. A CreditRetirementReceipt NFT (Non-Fungible Token) is minted as permanent proof.
5. The retirement is recorded on the blockchain.

Integrated retirement

Credits are purchased and retired in a single atomic transaction. This is the most common path for buyers that know they want to claim the offset immediately upon purchase.

1. The buyer signs a purchase order with the integrated retirement flag enabled.
2. USDC payment is transferred to the RewardsVault for rewards distribution.
3. Credit tokens are transferred from the Vault to the buyer — and immediately burned.
4. Both a CreditPurchaseReceipt and a CreditRetirementReceipt NFT are minted in the same transaction.
5. The retirement is recorded on the blockchain.

Integrated retirement is the recommended path for most buyers, as it simplifies the process and reduces the number of transactions.

The retirement receipt

Every retirement produces a CreditRetirementReceipt — a soulbound NFT that serves as permanent, on-chain proof. The receipt records:

• Credit type — Whether TRC (e.g. C-BIOW) or TCC (e.g. C-CARB.CH4) was retired
• Amount — The quantity of credits retired (in metric tons)
• Retiring party — The wallet address of the buyer that retired the credits
• Timestamp — The block timestamp when retirement occurred
• Certificate references — Links to the backing certificates (GasID or RecycledID)
• MassID references — Links to the underlying waste batches

Because the receipt is soulbound, it cannot be transferred or altered. It remains in the retiring party's wallet as a permanent credential.

Why retirement matters

Retirement solves a critical problem in environmental markets: double counting. In traditional carbon and recycling offset markets, the same credit can be sold multiple times or claimed by multiple parties because there is no definitive mechanism to mark a credit as used.

In the Carrot Network, retirement is irreversible. Burned tokens cannot be recreated, and the on-chain retirement receipt provides unambiguous proof of who claimed the offset. This makes Carrot credits suitable for regulatory compliance where auditability and non-duplication are mandatory.

EPR and ESG compliance

Retirement receipts are the primary evidence for regulatory and voluntary reporting:

• Extended Producer Responsibility (EPR) — Producers retire TRCs matching their waste footprint (e.g., 50 metric tons of plastic TRCs to offset 50 metric tons of plastic packaging). Because credits inherit geographic traceability from MassIDs, retirements can satisfy location-specific mandates.
• ESG reporting — Organizations reference their retirement receipts in sustainability reports, demonstrating that commitments are backed by verified, permanently claimed recycling work.

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