The Cardano Foundation has released sustainability indicators for its blockchain network to align with Europe's Markets in Crypto-Assets (MiCA) regulation, required for operating in the EU.
The release was made in partnership with the Crypto Carbon Ratings Institute (CCRI).
The timing is significant. It comes six months before MiCA's second phase implementation for crypto asset providers.
The first phase, targeting stablecoins, took effect on June 30, and has already brought some serios troubles to Tether and other issuers. Inability or unwillingness to comply with MiCA results in a ban to operate in EU.
MiCA requires crypto asset issuers and service providers to disclose sustainability indicators. The Cardano Foundation and CCRI collaborated to meet this requirement.
The result is a comprehensive report on Cardano's sustainability indicators, which turned out to be rather impressive. Cardano indeed uses an energy-efficient consensus protocol that consumes much less energy than Proof-of-Work blockchains like Bitcoin.
As of May 2024, Cardano's network energy consumption was 704.91 MWh. This translates to 0.192 W per transaction per second (TPS).
The report also discloses Cardano's carbon footprint. The annualized figure is 250.73 tCO2e. The carbon intensity of consumed electricity is 356 gCO2 per kWh.
These metrics align with MiCA's draft regulatory technical standards. In many ways, Cardano sets a benchmark for other blockchain networks with this report.
Frederik Gregaard, CEO of the Cardano Foundation, commented on the initiative. He said, "There is a growing need to address sustainability in the crypto space." Gregaard believes the CCRI partnership will help Cardano meet MiCA's requirements.
Dr. Ulrich Gallersdörfer, CTO and co-founder of CCRI, also weighed in. He stressed the importance of scientific methodologies and real-world data. These are crucial for measuring and managing blockchain networks' environmental impacts.
The report sets a precedent in the crypto industry. It demonstrates a proactive approach to regulatory compliance and environmental responsibility.