Smart contract platform Algorand plans to achieve a carbon-negative network by implementing a “sustainability oracle” in partnership with ClimateTrade in a move that could make blockchain adoption more environmentally friendly.
The partnership, which was announced Thursday, enables Algorand to notarize its on-chain carbon footprint and then lock the equivalent amount of carbon credits into a so-called green treasury.
Silvio Micali, Algorand’s founder, said the company is focusing on sustainability at a time of growing adoption for the smart-contract protocol.
“As this period of hyper growth continues, we find it crucial to operate at a carbon-negative level. Indeed sustainable growth is way better than growth,” he said, adding:
“We understand that the mechanics of measuring the environmental impact of a global, decentralized and widely used blockchain are nuanced and complex.”
Climatetrade is a Spanish fintech company that secured over $1 million in seed investments last year. The firm is building a CO2 marketplace that enables companies to track their emissions in pursuit of broad sustainability goals. The company has already secured partnerships with large corporations, including Iberia, Melia Hotels, Cabify and others.
This isn’t the first time Algorand and Climatetrade have worked together. As Cointelegraph reported in December 2020, ClimateTrade is building its CO2 carbon offsetting technology on top of Algorand thanks to the platform’s flexibility and low transaction fees.
Algorand and other proof-of-stake protocols are attempting to showcase the greener side of blockchain technology. Bitcoin’s (BTC) emergence as a viable monetary system hasn’t come cheap from the perspective of carbon emissions. It’s estimated that the network’s proof-of-work mining produces 45.34 megatons of carbon dioxide annually.