Algorand, a proof-of-stake blockchain technology, will implement a smart contract that will automatically allocate part of the Algorand blockchain’s transaction fees to purchase the network’s carbon emissions offset.
Algorand has announced that a new smart contract within its blockchain network will automatically process a portion of each transaction fee to acquire verified carbon credits at ClimateTrade, a blockchain-based carbon offset marketplace.
According to Staci Warden, CEO of the Algorand Foundation, the move will allow the network to scale while remaining carbon neutral. Warden told Cointelegraph that the smart contract will ensure that their blockchain is environmentally sustainable in the long run and that he hopes that more companies will follow suit.
“We hope that this will inspire our partners and other blockchain protocols to reduce their carbon impact,” Warden said. She added that all tech companies have a responsibility to contribute to the creation of a sustainable future, and her team is pleased to be able to present a roadmap for doing so.
The blockchain industry’s attempts to be more environmentally friendly were also lauded by the CEO. According to Warden:
“The industry is moving in the right direction by adopting proof-of-stake as the preferred consensus mechanism. While there are certainly valid criticisms against Bitcoin and proof of work, the future is bright.”
The Algorand team pledged to be a carbon-negative blockchain in 2021. Algorand was able to log its on-chain carbon footprint and place an equal quantity of carbon credits in a green treasury because of its cooperation with ClimateTrade.
Meanwhile, in an effort to combat the effects of climate change, Lemonade joined with blockchain firms to develop a decentralized autonomous organization (DAO) that intends to assist African farmers in mitigating the consequences of climate change. The Lemonade Crypto Climate Coalition DAO provides farmers with climate insurance and lets them be compensated if they are ever impacted by natural disasters.