Rewards Distribution Policy
Policy governing how rewards from credit purchases are distributed across participants.
Overview
The Rewards Distribution Policy defines how revenue from Tokenized Recycling Credit (TRC) and Tokenized Carbon Credit (TCC) purchases is distributed among participants. Buyers purchase a quantity of credits (e.g. 10 metric tons); that quantity is fulfilled by allocating from one or more certificates, each backed by MassIDs. Revenue is split across the underlying MassIDs proportional to each MassID's weight in the allocation, then distributed by participant category according to the percentages below. The policy is designed to maximize participation in the network and accelerate recycling rates across geographies.
Current version: v1.0 (Ratified January 22, 2024)
The policy was established by the Carrot Foundation in consultation with market participants, advisors, and data scientists. Over time, the Foundation will progressively expand community participation in these decisions.
Payment currency and withdrawal
Rewards are paid in USDC (a stablecoin pegged to the US dollar). Participants can withdraw their rewards in fiat or crypto — fiat payouts are fulfilled off-chain via integrated payment providers, while crypto withdrawals use the on-chain USDC balance. Using USDC as the settlement currency gives participants stable value without exposure to cryptocurrency price volatility, keeps protocol settlement consistent on-chain, and allows participants to choose how they receive value (fiat or crypto) according to their needs. For full claiming mechanics and privacy-preserving distribution, see Rewards Distribution.
Participant categories
| Key | Participant | Description |
|---|---|---|
| G | Waste Generator | Produces waste and performs source sorting |
| H | Hauler(s) | Transports waste between locations |
| P | Processor(s) | Sorts, accumulates, and pre-processes materials |
| R | Recycler | Performs certified recycling or composting (also serves as Processor) |
| CP | Community Impact Pool | Fund for socio-environmental projects in the local territory |
| I | Network Integrator | Data provider for supply chain tracking |
| A | MvF Author | Creator of the methodology framework (MvF) |
| D | MvA Developer | Developer of the MvA (software that implements the framework) |
| N | Carrot Network | Provides the protocol and smart contract infrastructure for verification, issuance, record-keeping, and rewards distribution |
Distribution by waste type
Each waste type has its own distribution percentages, reflecting the relative contribution of each participant in that material's supply chain.
Tip
Use the Credit Calculator to see an illustrative revenue breakdown for a given waste type and volume.
Reward discounts
Supply chain digitization incentive
A standard 25% discount is applied to all logistics and service providers (Recyclers, Processors, Haulers) when the Waste Generator is not identified in the chain of custody. This applies to all waste types and geographies, serving as an incentive for further supply chain digitization. See Rewards Distribution for the full mechanics.
Waste Generator discounts
A 50% discount on Waste Generator rewards applies in two scenarios:
- Incomplete onboarding — Waste Generators that have not yet completed the onboarding process receive a 50% discount on rewards for all credits issued before the onboarding completion date. Once onboarding is completed, only credits issued from that date onward are eligible for full reward allocation; credits issued prior to the onboarding completion date remain subject to the 50% discount. This discount ensures uniform application of the policy while formalization and registration verification remain pending, and it functions as an incentive mechanism to drive onboarding completion. In practical terms, the rule reinforces the principle that full reward redistribution depends on minimum eligibility and traceability conditions within the network, ensuring transparency, governance, and predictability for all ecosystem stakeholders.
- Large Businesses — Waste Generators classified as Large Businesses (revenue exceeding USD 4 million in the prior calendar year) receive 50% of their allocated rewards after onboarding. This calibrates incentives proportionally while preserving participation motivation.
Community Impact Pool
Discounted amounts from both scenarios above are directed to the Community Impact Pool — a collective fund for socio-environmental projects in the territory where the recycling took place. The Pool supports environmental, social, and innovation projects aligned with circular economy principles. Over time, the Pool will evolve toward progressive community participation in its governance.
Learn about rewards distribution · Learn about the supply chain