Polygon PoS emissions analysis by Offsetra and KlimaDAO
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Polygon PoS emissions analysis by Offsetra and KlimaDAO

Published Wed Mar 30 2022

Summary

On behalf of KlimaDAO, Offsetra was tasked with applying their Proof of Stake (PoS) and Proof of Work (PoW) network emissions methodologies to compute the emissions associated with the Polygon network (including contracts interacting with Ethereum Mainnet). The completed analysis includes staking node hardware emissions as well as emissions from the energy consumption of their operations. Additionally, Polygon requested that emissions from contracts directly interacting with Ethereum Mainnet be accounted for, notably their checkpointing and bridging activities.

Throughout the article you will see emissions totals denoted in ‘CO2e’. This is because the electricity grid emissions coefficients that serve as the basis for this analysis take into account ‘carbon dioxide equivalents’ of energy production emissions. Thus, the global warming potential of other greenhouse gases emitted during energy generation (e.g. methane emissions) are converted to an equivalent amount of carbon dioxide.

Polygon's total network emissions in the past year (February 2021 – February 2022) amount to 85,015 tonnes CO2e, with hardware comprising an additional 11 tonnes CO2e (annualized). Checkpointing and bridging activities that involve transactions on Ethereum Mainnet are responsible for over 99% of Polygon’s emissions. Finally, an analysis of KlimaDAO’s emissions utilizing this methodology (taking into account our Polygon-based contracts and Ethereum Mainnet transfers of, for example, aKLIMA) provided an output of 110 tonnes CO2e.

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About Polygon

Polygon is a decentralized Ethereum scaling platform that enables developers to build scalable user-friendly dApps with low transaction fees, without sacrificing network security. By using PoS consensus, Polygon operates in an extremely energy efficient way.

About Offsetra

Offsetra is a Klima Infinity partner and a consultancy dedicated to pursuing on-chain emissions research. The team has carried out consulting mandates for Elrond Network, xDAI, KlimaDAO, and various blockchain-enabled platforms. Their Ethereum network emissions methodology was recently showcased by the Crypto Climate Accord in their latest report, Crypto Carbon Accounting Guidance.

About KlimaDAO

KlimaDAO demonstrates how a new monetary system—powered by decentralized governance and smart contracts—can be built that explicitly prices in carbon to economic activity. The DAO governs a 'decentral bank' and the monetary policy of its native carbon-backed currency (KLIMA). It has the aim of catalyzing a robust on-chain carbon market, and it allocates resources to build unique products serving as the interface to this emerging market. Ultimately, KlimaDAO serves to drive adoption and growth of the crypto-carbon economy.

Polygon network analysis

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Staking nodes

Polygon is a blockchain that uses the PoS consensus mechanism. It is the running of staking nodes (which is done on a piece of physical hardware with a connection to the internet and a power supply) to secure the network that are the cause of the network’s electricity consumption.

The methodological approach to identify the power consumption of a PoS network, established by University College London, is to arrive at an energy consumption per transaction metric (ctx). To achieve this, the number of transactions per unit of time needs to be considered (l), as well as the power consumed by a validator node (p, measured in Watt) and number of validators (nval). All variables are considered constant for the temporal scope of one year. Hence,

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Source: UCL CBT Blockchain Environmental Impact Study

As blockchains are typically decentralized and a full dataset to model the electricity consumption of a given network is rarely available, some assumptions are required to build up an understanding of the emissions and define 'p' in the above equation. Hence, both low and high electricity consumption scenarios (based on the known specifications of utilized hardware) are created and averaged to achieve a best-guess estimate for each validator node.

As well as considering the hardware specifications, a realistic energy consumption estimate for a validator node should factor in the utilization rate of the hardware. Consensus-related energy demand in PoS is constant (i.e. it occurs irrespective of system load). However, Offsetra has applied a load factor of 0.75–0.94 for the hardware, on the assumption that locally owned staking nodes may be utilized for other activities beyond Polygon node operations and may at times go offline.

Once derived, the ctx value is then multiplied against an electricity system emission factor, which considers the locations where Polygon network activity takes place, to achieve a carbon emissions value (in tonnes of CO2 equivalence). This number is summed across the entire network of Polygon's 100 nodes.

Note that the distributed nature of the network means that the carbon impact of a given Polygon node operator is variable depending on the country in which the activity takes place.

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Offsetra has extrapolated the best available data from a range of sources to develop up-to-date emission factors for the purpose of this analysis in lieu of any single database for emission factors being available.

The approach deployed here ensures that variables within the calculations (such as node location and hardware specifications) are internalized into the approach and represented within the final results.

Hardware

The physical hardware that is required to undertake staking activity also have a carbon footprint from the materials, manufacturing, and disposal of the equipment during its lifecycle – known as embodied carbon. To derive the embodied carbon emissions from the hardware that is used for staking, the lifecycle emissions of a HP EliteDesk 800 G6 Desktop Mini PC (8GB RAM, 2GHz CPU, 100GB SSD) was used; Hewlett Packard have published transparent data for the Product Carbon Footprint of PCs and servers.

Ethereum checkpointing

Ethereum emissions are calculated based on Offsetra’s Ethereum network emissions methodology, which is available here. Emissions per unit of gas are utilized to reflect the computational resources dedicated to Polygon checkpointing. Importantly, this activity takes place on average 48 times per day.

To ensure coverage against all emissions, Offsetra elected to utilize its ‘high’ range band for potential Ethereum emissions. This equates to an average of 0.00034kgCO2 per unit of gas between May 2020 and February 2022. This coefficient was then multiplied against the monthly gas utilized for checkpointing activities.

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Ethereum bridging

The same Ethereum emissions methodology utilized for checkpointing activities was also applied to the Polygon bridging contracts. Gas utilized for bridging transactions from the below address is viewable here: https://dune.xyz/queries/433787

Polygon's main bridging contract address: 0xa0c68c638235ee32657e8f720a23cec1bfc77c77

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Standards of calculation

The following five principles are a central element of the Greenhouse Gas Protocol on which every step of greenhouse gas accounting is based:

  • Relevance: The greenhouse gas inventory must adequately record and present all relevant emissions of a company.
  • Completeness: The calculation must capture all emitted greenhouse gases. If certain emission sources are not recorded, this must be clearly noted and justified in detail.
  • Consistency: The calculation must be based on uniform methods. Any change in the data basis, calculation limits, and/or emission factors must be reported.
  • Transparency: Based on an accurate audit scheme, all collected data must be presented in a clear and coherent manner. The assumptions, emission factors, and methods used must be documented.
  • Accuracy: It must be ensured that the quantification of greenhouse gases is neither systematic nor below actual emissions and that uncertainties are minimized as much as possible.

Results

Offsetra’s analysis of the energy usage of the network resulted in an output of 570 tonnes CO2 since the network’s inception, with 567 tonnes of those emissions originating in the past year. This is because Polygon saw network activity increase significantly from mid-2021 onwards. The average transaction count from May 2020 to May 2021 was 13,450,793.33. From May 2021 onwards it was 147,131,716.8 (i.e. an order of magnitude higher) and significantly more bridging and checkpointing happened during this period (which is where the majority of emissions come from). Considering the lifecycle emissions of the physical hardware itself results in an additional 20 tonnes CO2e being associated with the network.

Checkpointing and bridging activities that involve transactions on Ethereum Mainnet make up the majority of Polygon’s emissions. Since the network’s inception, checkpointing has resulted in over 16,000 tonnes of emissions and bridging nearly 74,000 tonnes. Thus, total emissions for Polygon equate to 90,654 tonnes, with 85,026 tonnes of these emissions attributed to its past year of operation (February 2021 – February 2022).

Data table

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Scope of analysis

Polygon’s unique position as a semi-independent sidechain that runs in parallel to Ethereum Mainnet but checks in periodically results in a situation where both PoS emissions and PoW emissions must be accounted for. Key Ethereum contracts critical to the Polygon PoS network’s functioning were thus included in this analysis (i.e. bridging and checkpointing).

Importantly, past analyses of Polygon PoS, such as that undertaken by Digiconomist and South Pole, also included the gas utilization of the MATIC token on Ethereum's Layer 1. This activity on Layer 1 is not critical to Polygon’s functioning. Rather, this token exists independently for users of Ethereum and therefore any emissions from the use of this token on Ethereum should be attributed to the users of those tokens or to the Ethereum network itself. Put another way, the Digiconomist approach is akin to attributing all wETH emissions on Polygon to the Ethereum network, which through the lens of the analysis carried out here is illogical (as the wETH emissions are instead considered here within the Polygon analysis).

In addition, this analysis has not evaluated other contracts associated with Polygon that are on Ethereum's Layer 1. Further analysis could be conducted on these contracts to ascertain their emissions, although as stated above these emissions should be internalized within Ethereum's carbon accounts for Layer 1 activity.

Further analysis can be undertaken, as per the Greenhouse Gas Protocol, to analyze Scope 1 and Scope 3 emissions categories (e.g. staff travel, material purchases, investments). The current methodology considers electricity utilized by the Polygon network to fall within Scope 2 (purchased energy) as in effect the network is rewarding nodes for their computational efforts through the provision of staking rewards.

Comparison and emissions equivalents

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KlimaDAO’s emissions

Utilizing an emission factor per transaction derived from the Polygon network analysis, KlimaDAO calculated its total carbon impact from activity on Polygon post-launch, and liquidity activities on Ethereum's Layer 1 prior to launch.

A full list of KlimaDAO's contracts can be viewed in the Official Links and Addresses channel of the official KlimaDAO Discord.

Activity on KlimaDAO's contracts yielded emissions of 110tCO2e.

As with Polygon, these emissions are attributed primarily to activity that occurred on Ethereum Mainnet. As KlimaDAO is fully operational on Polygon and no longer uses Ethereum Mainnet, the ongoing emissions of the Protocol will likely be less than 1tCO2e/year. To date, KlimaDAO’s operations on Polygon have yielded emissions of just 0.25tCO2e. This is equivalent to 0.17 economy-class flights from NYC to London.

Resources

Polygon – Ethereum checkpointing and bridging activities: Dune Dashboard

Crypto Climate Accord's latest report: Crypto Carbon Accounting Guidance

Offsetra: Carbon.FYI Methodology

Polygon: The Eco-Friendly Blockchain Scaling Ethereum

Disclaimer

The information provided in this blog post pertaining to KlimaDAO (“KlimaDAO”), its crypto-assets, business assets, strategy, and operations, is for general informational purposes only and is not a formal offer to sell or a solicitation of an offer to buy any securities, options, futures, or other derivatives related to securities in any jurisdiction and its content is not prescribed by securities laws. Information contained in this blog post should not be relied upon as advice to buy or sell or hold such securities or as an offer to sell such securities. This blog post does not take into account nor does it provide any tax, legal or investment advice or opinion regarding the specific investment objectives or financial situation of any person. KlimaDAO and its agents, advisors, directors, officers, employees and shareholders make no representation or warranties, expressed or implied, as to the accuracy of such information and KlimaDAO expressly disclaims any and all liability that may be based on such information or errors or omissions thereof. KlimaDAO reserves the right to amend or replace the information contained herein, in part or entirely, at any time, and undertakes no obligation to provide the recipient with access to the amended information or to notify the recipient thereof. The information contained in this blog post supersedes any prior blog post or conversation concerning the same, similar or related information. Any information, representations or statements not contained herein shall not be relied upon for any purpose. Neither KlimaDAO nor any of its representatives shall have any liability whatsoever, under contract, tort, trust or otherwise, to you or any person resulting from the use of the information in this blog post by you or any of your representatives or for omissions from the information in this blog post. Additionally, KlimaDAO undertakes no obligation to comment on the expectations of, or statements made by, third parties in respect of the matters discussed in this blog post.