The bundle token redemption procedures are similar to bundle token retirement procedures in that there are two ways to redeem a bundle token. Reminder, there is a standard 2% fee for redemption. A bundle token holder can directly redeem the bundle token for no additional fee or select an underlying GCO2 token to redeem for an additional dynamic fee. If a bundle token holder chooses the no additional fee option, the oldest carbon credit in the bundle will be sent to their registry account.
Important note: In order to redeem GCO2 or bundle tokens, the redeemer must be a permissoned GCO2 holder that has passed Flowcarbon's KYC process.
The bundle token holder initiates the redeem process by submitting a request to Flowcarbon. Upon approval of the request, Flowcarbon determines which underlying project credits to transfer to the requestor. When the project has been confirmed, Flowcarbon confirms the requestor has an account at the appropriate registering body. Then both the bundle tokens and the GCO2 tokens are sent to Flowcarbon and burned and the physical carbon credits are then transferred from the bankruptcy remote SPV to the requesting entity's account.