How It Works
End-to-end walkthrough of how the Carrot Network executes environmental methodologies to turn physical waste into verifiable credits and market-driven incentives.
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The dMRV process runs in three stages. In Capture, Network Integrators submit supply chain events — pick-up, drop-off, weighing and sorting — and each batch of waste is codified into a MassID holding material, weight and the chain of custody that every later transfer updates. In Verify, a Methodology Verification Application runs the rules of an approved Methodology Verification Framework against that MassID and returns one of three outcomes: a rule that passes continues the flow, an indeterminate rule pauses the run for a recorded human decision, and a rule that fails ends it with no credit. In Record, a verified MassID generates a certificate — RecycledID for recycling, GasID for emission reductions — published in the Carrot Registry; when the certificate is recorded on the public registry, with its metadata on IPFS, it issues fungible credits in the same transaction, and anyone can check the record. Network Integrators submit the data, Carrot orchestrates the run, and independent validation and verification bodies assure the evidence.
The end-to-end path: supply chain events become a MassID, methodology rules decide, and the outcome becomes a public record.
If you are new to environmental credit markets, start with Credit Ecosystem Roles to see how standards, methodologies, digital MRV (dMRV), registries, VVBs, buyers, and supply chain participants fit together.
The recycling supply chain
Network Integrators digitize the recycling supply chain by connecting the operations they serve to the Carrot Network — capturing the path that materials take from waste generation through collection, sorting, hauling, and processing at accredited recycling or biological treatment facilities. At each stage, the physical work performed by participants is recorded digitally, creating a verifiable chain of custody.
Understanding how waste logistics works is essential to understanding how Carrot creates value. Sorting and cleaning mixed waste after it has been contaminated is too expensive and technically complex for most locations. High-performance recycling requires reaching the source of waste creation — the Waste Generator — because proper sorting must happen before materials are collected, not after.
Deep dive into the recycling supply chain
From waste to digital asset
When waste materials are collected and sorted, they are codified into MassIDs — digital records that capture material type, weight, and chain of custody. MassIDs travel with the physical material through the supply chain, creating a digital twin that tracks every transfer and transformation.
Each MassID records the full chain of custody — built from data submitted by Network Integrators — enabling end-to-end traceability from waste generation to final processing.
Verifying environmental impact
When MassIDs reach an accredited recycling or biological treatment facility, they enter the dMRV process. Automated rule-based validation, backed by third-party auditors, confirms that the claimed environmental work was performed.
This verification step is what separates Carrot from traditional receipt-based systems. Instead of relying on paper receipts that can be duplicated and manipulated, the dMRV process executes methodology-specific rules against physical outcomes, producing verifiable and auditable results.
Generating environmental credits
MassIDs that pass methodology verification generate Certificates — unique digital records that each represent a specific verified environmental outcome:
- GasID — Represents greenhouse gas emission reductions (e.g., methane reductions achieved by biological treatment of organic waste instead of landfilling)
- RecycledID — Represents certified recycled material processed through an accredited facility
Certificates in turn back the issuance of credits: Tokenized Carbon Credits (TCC) and Tokenized Recycling Credits (TRC). Credits are standardized within the applicable material class or methodology, making them tradable commodities.
Creating a market for credits
Organizations and individuals purchase and retire credits on the public credit registry to meet Extended Producer Responsibility (EPR) mandates and ESG goals.
Credits are purchased through Carrot interfaces that handle pricing and settlement — replacing the opaque, intermediary-heavy over-the-counter markets where most environmental credits are currently traded. The platform publishes reference prices — today carbon and recycling credits are sold as a pair, priced per ton of CO₂e — with additional credit types expected as new methodologies launch.
Learn about purchasing credits
Distributing rewards
Proceeds from credit purchases are distributed directly to the verified contributors in the recycling supply chain through an automated, rule-based process. The distribution follows the Rewards Distribution Policy, ensuring that value reaches every participant who contributed to the environmental outcome — from waste generators who sorted correctly, to haulers and processors.
This creates a self-reinforcing incentive loop:
- Waste generators are rewarded for sorting, covering their costs and encouraging continued participation
- Recyclers, Haulers, and Processors receive new revenue streams, enabling them to invest in expanding operations
- Non-participants are attracted to join the ecosystem through incentives (Recycle-to-Earn)
Read about rewards distribution
How the network grows
Carrot's atomic network — credit buyers, methodology creators, network integrators, and recyclers
The Carrot Network grows through Network Integrators — software platforms that digitize the operations of local waste management and logistics providers and submit their data to the Carrot Network. By integrating with Carrot, an integrator unlocks rewards from environmental credits for itself and for the providers it serves, which gives it a reason to onboard its entire recycling customer base.
The network's first use case — organic waste biological treatment under BOLD Recycling and BOLD Carbon (CH₄) (BOLD: Breakthrough in Organics Landfill Diversion) — was chosen because organic waste represents approximately 50% of global waste volume and almost all of it currently ends up in landfills. Diverting organic waste to biological treatment generates both carbon credits (methane reductions) and recycling credits, while also removing the food contamination that degrades the quality of other recyclable materials.
From this initial use case, the network expands by introducing new methodologies for additional waste streams and by growing geographically as more Network Integrators join in new markets.
Ready to take the next step?
Understand how to buy credits and what evidence you receive in the credit purchase and credit retirement guides.