The smart contract will automatically allocate part of the Algorand blockchain’s transaction fees to purchase carbon credits at the carbon offset marketplace ClimateTrade.
Proof-of-stake blockchain protocol Algorand will implement a smart contract that will automate the offsetting of the network’s carbon emissions.
In a recent announcement, Algorand revealed that a new smart contract would take a portion of each transaction fee within its blockchain network and automatically process it to purchase verified carbon credits at ClimateTrade, a blockchain-based carbon offset marketplace.
According to Algorand Foundation CEO Staci Warden, the move will allow the network to scale while still being carbon negative. Warden told that the smart contract will ensure that their blockchain remains eco-friendly in the long-term and hopes that other firms do the same.
“We hope this encourages our partners and other blockchain protocols to lower their carbon footprint,” said Warden. She explained that all tech companies have a responsibility to help build a sustainable future, and their team is happy that they are able to provide a blueprint on how this can be achieved.
The CEO also praised the blockchain industry’s efforts to be more eco-friendly. Warden said that:
“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.”
Back in 2021, the Algorand team made a pledge to be a carbon-negative blockchain. Through its partnership with ClimateTrade, Algorand was able to log its on-chain carbon footprint and put an equal amount of carbon credits in a green treasury.
Meanwhile, in an attempt to combat the effects of climate change, insurance firm Lemonade partnered with blockchain companies to form a decentralized autonomous organization (DAO) that aims to help protect African farmers. The DAO, called the Lemonade Crypto Climate Coalition, provides climate insurance to farmers and allows them to be compensated should they ever be affected by natural disasters.