How It Works

The Invariant

The entire protocol exists to enforce one rule:

BCOToken.totalSupply() == DeedRegistry.totalActiveArea() × 10¹⁸

Every BCO in circulation is backed by exactly 1 m² of registered, verified forest land. This is not a promise — it is enforced by the smart contracts and verifiable on-chain by anyone.

Token Lifecycle

Minting (Supply Expansion)

When new forest land is verified and registered:

1. Forest deed is verified off-chain (documentation, geolocation, area)
2. Registrar calls registerDeed() on DeedRegistry
3. DeedRegistry records the deed (area, geolocation, document hash)
4. DeedRegistry calls mint() on BCOToken
5. New BCO tokens (area × 10¹⁸) are sent to the treasury
6. totalActiveArea increases, totalSupply increases → invariant preserved

Example: A 5,000 m² forest deed is registered → 5,000 BCO are minted to treasury.

Burning (Supply Contraction)

When a forest deed is deactivated (e.g., land is no longer verified):

1. Company buys BCO from the open market
2. Company approves DeedRegistry to spend the tokens
3. Registrar calls deactivateDeed() on DeedRegistry
4. DeedRegistry burns the equivalent BCO from the company
5. Deed status changes to Deactivated
6. totalActiveArea decreases, totalSupply decreases → invariant preserved

Important: The company must buy BCO from the market to deactivate deeds. This creates natural demand pressure proportional to deactivation activity.

Verification

Anyone can call verifyInvariant() on DeedRegistry at any time:

function verifyInvariant() external view returns (bool) {
    return bcoToken.totalSupply() == totalActiveArea * 1e18;
}

If this ever returns false, the protocol is in an invalid state — which the contract architecture is designed to make impossible.

Staking

BCO holders can stake their tokens to earn rewards through BCOStaking:

1. Reward manager funds a reward period (e.g., 100,000 BCO over 90 days)
2. Users deposit BCO into the staking contract
3. Rewards accrue proportionally to each staker's share
4. Users claim rewards and/or withdraw at any time

Key design decisions:

• No infinite mint — Rewards come from a pre-funded pool, not new token emissions.
• Finite periods — Reward distribution stops automatically when the period ends.
• Pull model — Stakers claim rewards explicitly; no auto-distribution.

Staking does not affect the invariant — tokens are transferred, not minted or burned.

Rate Limiting

To prevent abuse, DeedRegistry enforces:

Limit	Default	Configurable
Max deeds per day	10	Yes (min 1)
Max area per deed	10,000,000 m²	Yes (min 1)

These limits can be adjusted by the admin but cannot be set to zero.