Introduction
KlimaDAO proposes to offset 4,390.96 tCO2 of on-chain carbon offsets to make Alchemix certified carbon neutral and to amplify Alchemix’s climate impact messages with a dedicated media partnership.
Motivation
Using Kyle McDonald’s emissions estimates, the Ethereum network has a carbon footprint of roughly 18.1M tonnes. Now that the merge has taken place, Ethereum’s footprint looking forward is minimal. However, it’s important for the community as a whole to effectively quantify and take action for historical emissions. Doing so is a win for Ethereum, but also helps push investment and ideation into the growing ReFi (regenerative finance) ecosystem.
The good news is that taking action on historic emissions is possible in a web3-native way, thanks to KlimaDAO’s development of DeFi rails for climate finance. The KlimaDAO team has developed expertise and unique technology to make the process of removing historical emissions achievable for dApps such as Alchemix
Methodology
To measure the carbon emissions of Alchemix we have implemented the comprehensive emissions model developed by Kyle McDonald in the research paper: Ethereum Emissions: A Bottom-up Estimate which maps network energy usage to emissions factors.
We then use carbon.fyi which is a tool that applies this methodology to calculate the emissions of defined contracts based on gas usage within specific blocks.
Scope
Known Alchemix contracts with carbon emissions quantified from carbon.fyi calculated on October 5th 2022. The total amount of tCO2 required the historically offset the protocol is 4,390.96. A breakdown can be viewed here.
Proposed Projects
Overall, the aim is to direct capital toward a diversified climate-positive strategy – demonstrating the power of public blockchains to catalyze positive impact. This means retiring existing verified carbon credits to support sustainability projects that have verifiably avoided emissions with technology (e.g. renewable energy installation, energy efficiency improvements) or natural systems (e.g. protecting existing forests).
There are a wide variety of tokenized projects available that meet this criteria, some examples are listed below. KlimaDAO can also help identify additional projects for consideration within tokenized carbon pools (BCT - Base Carbon Tonne, MCO2 - Moss, NCT - Nature Carbon Tonne).
Costs
As at October 17th, 2022 the pricing of each pool token:
BCT - $1.61
MCO2 - $2.45
NCT - $2.17
Case Study
As an example of previous partnerships, Polygon worked with KlimaDAO and retired $400,000 of carbon credits representing the entirety of the network’s CO2 debt since inception. Going forward Polygon will continue to build upon its Green Manifesto and become carbon negative.
Achieving carbon neutrality was critical in Polygon securing key partnerships with notable brands including Starbucks and Meta whose mainstream users' concerns were addressed by the action they took on climate change.
You can take a deeper look at projects that have used KlimaDAO to offset carbon emissions transparently through our pledge dashboard or you can find out more about our Klima Infinity program.
Additional Scoping
This proposal at present only considers on-chain emissions from Alchemix contracts on Ethereum. It does not account for other emissions generated from organizational activity (e.g. employee travel, commuting, office space, etc). These could be easily calculated and included at a later date. That said, it’s safe to say most of Alchemix carbon emissions are from on-chain activity given that it is a software-based enterprise.
Closing
KlimaDAO is looking forward to feedback from the Alchemix community on this proposal and ways that we can partner together on tackling historical emissions. We appreciate Offsetra’s carbon.fyi for their work in developing a methodology for on-chain calculations and the countless stakeholders who have refined it over the past year.
Thank you for your consideration.