April 20, 2022
Growth in the NFT market has been indisputably explosive, with trading volumes increasing from $74 million at the beginning of 2021 to $25 billion by the end of the year. That growth has only accelerated since, with NFT trading volumes hitting $12 billion in Q1 2022 alone.
But every transaction has a cost — and it’s not just floor values and gas fees. The vast majority of NFTs are on the Ethereum blockchain, which still runs on the energy-intensive proof-of-work operating method (until The Merge occurs, which will transition Ethereum to proof-of-stake.)
Minting a single NFT using the proof-of-work method requires the same amount of electricity as an average American household over almost nine days. An equal amount of energy is required when that same NFT is purchased and when it is sold. In other words, a single NFT transaction on Ethereum uses the same amount of energy as roughly 331,056 Visa transactions or 24,895 hours of watching YouTube.
So is it possible to be climate-conscious and participate in this exciting emerging market? The answer is yes. In fact, KlimaDAO can help make your NFT transactions an act of climate activism.
Since its inception in October 2021, KlimaDAO has created an on-chain market for tokenized carbon offsets. This makes the purchase of carbon offsets accessible to anyone with a crypto wallet. Further, KlimaDAO recently launched its offsetting tool, allowing these tokenized offsets to be “burned” on chain. The individual who performs the offset has confidence in knowing the carbon emitted due to the transaction’s energy consumption has been counterbalanced with an activity that reduces greenhouse gasses. Since KlimaDAO lives on the proof-of-stake Polygon blockchain, its activity consumes 99.9% less energy than transactions on Ethereum.
While neutralizing the impact of one’s NFT-related energy consumption is a great first step, web3 enables some far more exciting possibilities to go beyond carbon neutrality to climate positivity. Several NFT artists have leveraged KlimaDAO in creative ways to make a commitment to the planet through their art.
A powerful and poetic way to make your NFT collection climate positive is to embed staked KLIMA into the smart contract.
New Zealand-based Digital Charity Art partnered with KlimaDAO on their most recent collection of NFTs, which act as a time capsule, locking up and compounding carbon offsets over time while generating cash flow for ocean conservation. When an NFT was minted, the buyer could burn the NFT, claiming the underlying KLIMA along with 70% of staking rewards. Over the course of the year, the other 30% of rewards are claimed by DCA and directed to ocean conservation charities (World for Wildlife NZ, Sea Shepherd NZ, See Turtles, Marine Megafauna Foundation, and Oceanic Society).
This tactic was first introduced by artist SVN, who created the original carbon-compounding artwork. Minted on December 4, 2021 with one staked KLIMA permanently embedded in its smart contract, it has since compounded 10.328 KLIMA, equaling 31.5 carbon tonnes locked away in the treasury. The contract is designed so the KLIMA can never be removed or unstaked.
Recently, KlimaDAO launched its “Love Letter to the Planet” campaign, allowing individuals and organizations to offset emissions on chain while leaving a 280-character message in the smart contract. Several NFT artists have participated in this campaign to make their commitment public:
If you are an NFT artist or collector and want to align your actions with your values, you can start by calculating the emissions of your Ethereum address at carbon.fyi. You can then offset your emissions or go carbon negative by writing your own Love Letter to the Planet. For more resources, check out this guide on how to create climate-positive NFTs.
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