Cardano Is MiCA Ready: Sustainability Indicators Released

In an environmental assessment mandated by the emerging Markets in Crypto-Asset (MiCA) regulations, the Crypto Carbon Rankings Institute (CCRI) has released detailed sustainability indicators for the Cardano blockchain. CCRI has teamed up with the Cardano Foundation to work on the sustainability assessment which provides a granular take a look at the network’s energy usage, carbon emissions, waste production, and its broader environmental impact, serving as a compliance check against the European Securities and Markets Authority’s (ESMA) latest regulatory standards.

Cardano Is MiCA Ready

Cardano’s infrastructure, operating on a Proof of Stake (PoS) protocol named Ouroboros, shows a big reduction in energy consumption compared to traditional Proof of Work (PoW) networks. The annualized energy consumption of the Cardano network stands at 704.91 MWh. For perspective, traditional PoW networks like Bitcoin devour an immensely higher amount of energy, often equating to the output of small countries, because the report notes.

The whole annualized carbon emissions for Cardano are calculated at 250.73 tonnes of CO2 equivalent. The carbon intensity, which measures the emissions per unit of electricity consumed, is noted at 356 grams of CO2 per kWh. This figure is indicative of the varieties of energy sources utilized by the network, reflecting a mixed reliance on each renewable and non-renewable resources.

The CCRI report states, “We discover a complete annualized carbon footprint of 250.73 tCO2e for the Cardano network. The carbon intensity of the consumed electricity sits at 356 gCO2 per kWh, suggesting a marginal but obligatory focus towards more renewable sources to further decrease this metric.”

Considered one of the brand new metrics introduced by the MiCA framework is the measurement of waste production, particularly specializing in electronic waste. The Cardano network generates roughly 8.26 tonnes of waste electrical and electronic equipment (WEEE) annually. Of this, 51.93% will not be recycled, spotlighting an area for improvement in waste management practices inside the network’s hardware lifecycle.

The report delves into the impacts of the network’s operations on natural resources, including the critical raw materials required for the production of the hardware components. These materials are sometimes scarce and have significant extraction costs, each environmentally and economically. The network’s energy consumption also not directly affects water usage, especially in regions where non-renewable energy sources are predominant and water is used extensively for cooling purposes in power generation.

Under the MiCA regulations, which got here into force in June 2023, all crypto-asset service providers are mandated to reveal comprehensive environmental impacts of their operations. The CCRI’s detailed report on Cardano not only aligns with these requirements but sets a precedent for transparency within the reporting of sustainability metrics inside the crypto industry.

The Cardano network, on the time of reporting, operates 3,147 nodes and has processed an annualized count of 19,530,055 transactions. These operational figures are critical in understanding the network’s physical infrastructure and its environmental load. The typical power per node is reported at 25.576 watts, with the entire network power amounting to 80.47 kW. The facility demand per transaction per second (TPS) is 0.192 W.

Overall, the CCRI’s report provides a vital insight into Cardano’s environmental profile and its alignment with global sustainability goals. Because the crypto industry faces increasing scrutiny over its environmental impact, such assessments will likely be crucial for investors, regulators, and the broader community to make informed decisions concerning the sustainability of blockchain technologies.

At press time, ADA traded at $0.41.

ADA price holds above the 0.786 Fib, 1-day chart | Source: ADAUSD on TradingView.com

Featured image created with DALL E, chart from TradingView.com

Leave a Comment

Copyright © 2024. All Rights Reserved. Finapress | Flytonic Theme by Flytonic.