DCarbonX Decentralised Application: Carbon Market Case Study

Decentralized applications developed using blockchain technology provide innovative business models to serve the human race and solve existing challenges. Climate change is one of the biggest problems humanity is facing and there is a dearth of solutions in tackling this grave impediment to the long-term sustainability of our planet. Accountability, greenwashing, traceability, impact assessment and trading of carbon credits are unresolved issues in the ESG sector. In this paper, we present a novel decentralized application software, DCarbonX, that solves the enumerated problems using NFTs on the blockchain platform, through smart contracts. The paper describes the functional architecture of DCarbonX, while elaborating on its salient features and utility in sustainable finance, in particular green sukuk. DCarbonX is a pioneering software providing an exchange for trading of carbon credits. The software facilitates logging of impact and traceable transactions in a carbon market, that would help to prevent duplication of records and greenwashing. The paper discusses the efforts being undertaken to achieve the climate goals as per the Paris Agreement and also highlights the pivotal obstacles to achieving carbon neutrality by 2050, as per COP26. The paper also encompasses a study on the applications of dapps in DeFi, Web 3.0 and ESG, among other areas and gives a comparative analysis of blockchain platforms for dapp development. The paper is also a pioneer in highlighting the challenges that plague dapp development, deployment and usage.